<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1998
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ROMACORP, INC.
ROMA SYSTEMS, INC.
ROMA DINING LP
ROMA HOLDINGS, INC.
ROMA HUNTINGTON BEACH, INC.
ROMA BAR MANAGEMENT CORPORATION
ROMA FORT WORTH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 5812 13-4010466
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL 75-2405064
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) 75-2682212
48-1192853
75-2099681
75-1929174
75-1971248
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
</TABLE>
9304 FOREST LANE
SUITE 200
DALLAS, TEXAS 75243
TELEPHONE: (214) 343-7800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
DAVID G. SHORT
9304 FOREST LANE
SUITE 200
DALLAS, TEXAS 75243
TELEPHONE: (214) 343-7800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
FREDERICK TANNE, ESQ.
KIRKLAND & ELLIS
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
TELEPHONE: (212) 446-4800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
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Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit(1) Offering Price(1) Fee
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Romacorp, Inc.'s 12% Senior Notes due
2006..................................... $75,000,000 $1,000 $75,000,000 $22,125
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</TABLE>
* Not Applicable.
(1) Estimated solely for the purpose of calculating the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 31, 1998
PROSPECTUS
ROMACORP, INC.
ROMA SYSTEMS, INC.
ROMA DINING LP
ROMA HOLDINGS, INC.
ROMA HUNTINGTON BEACH, INC.
ROMA BAR MANAGEMENT CORPORATION
ROMA FORT WORTH, INC.
OFFER TO EXCHANGE SERIES B 12% SENIOR NOTES
DUE 2006 FOR ANY AND ALL OUTSTANDING SERIES A
TONY ROMA LOGO 12% SENIOR NOTES DUE 2006
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED.
Romacorp, Inc., a Delaware corporation ("Romacorp" or the "Company"), 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, Roma Fort Worth, Inc., a Texas corporation (each a "Guarantor" and
collectively, the "Guarantors") (the Guarantors together with the Company, the
"Issuers") hereby offer (the "Exchange Offer"), upon the terms and conditions
set forth in this Prospectus (the "Prospectus") and the accompanying Letter of
Transmittal (the "Letter of Transmittal"), to exchange $1,000 principal amount
of Series B 12% Senior Notes due 2006 (the "Exchange Notes"), which will have
been registered under the Securities Act of 1933, as amended (the "Securities
Act") pursuant to a Registration Statement of which this Prospectus is a part,
for each $1,000 principal amount of outstanding Series A 12% Senior Notes due
2006 (the "Notes" and together with the Exchange Notes, the "Senior Notes"), of
which $75,000,000 principal amount is outstanding. The form and terms of the
Exchange Notes are the same as the form and term of the Notes (which they
replace) except that the Exchange Notes will bear a Series B designation and
will have been registered under the Securities Act and, therefore, will not bear
legends restricting their transfer and will not contain certain provisions
relating to an increase in the interest rate which were included in the terms of
the Notes in certain circumstances relating to the timing of the Exchange Offer.
The Exchange Notes will evidence the same debt as the Notes (which they replace)
and will be issued under and be entitled to the benefits of the Indenture dated
July 1, 1998 among Romacorp, the Guarantors, and United States Trust Company of
New York (the "Indenture") governing the Notes. See "The Exchange Offer" and
"Description of Exchange Notes."
The Exchange Notes will be general unsecured obligations of the Issuers and
will rank pari passu in right of payment with any future senior indebtedness of
the Company, including borrowings under the New Revolving Credit Facility (as
defined). However, all borrowings under the New Revolving Credit Facility will
be secured by a first priority lien on substantially all of the assets of the
Company. As of July 1, 1998, the outstanding consolidated indebtedness of the
Company was approximately $80.0 million. The Exchange Notes are unconditionally
guaranteed on a senior basis (the "Guarantees") by the Guarantors and certain
Subsidiaries of the Company acquired or formed after the Issue Date.
The Issuers will accept for exchange any and all Notes validly tendered and
not withdrawn prior to 5:00 p.m., New York City time, on , 1998, unless
extended by the Issuers in their sole discretion (the "Expiration Date").
Notwithstanding the foregoing, the Issuers will not extend the Expiration Date
beyond , 1998. Tenders of Notes may be withdrawn at any time prior to
5:00 p.m. on the Expiration Date. The Exchange Offer is subject to certain
customary conditions. The Notes were sold by Romacorp on July 1, 1998 to the
Initial Purchasers (as defined) in a transaction not registered under the
Securities Act in reliance upon an exemption under the Securities Act. The
Initial Purchasers subsequently placed the Notes with qualified institutional
buyers in reliance upon Rule 144A under the Securities Act and with a limited
number of institutional accredited investors that agreed to comply with certain
transfer restrictions and other conditions. Accordingly, the Notes may not be
reoffered, resold or otherwise transferred in the United States unless
registered under the Securities Act or unless an applicable exemption from the
registration requirements of the Securities Act is available. The Exchange Notes
are being offered hereunder in order to satisfy the obligations of Romacorp
under the Registration Rights Agreement entered into by the Issuers in
connection with the offering of the Notes. See "The Exchange Offer."
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Securities and Exchange Commission (the "Commission") set forth in
no-action letters issued to third parties, Romacorp believes the Exchange Notes
issued pursuant to the Exchange Offer may be offered for resale, resold and
otherwise transferred by any holder thereof (other than any such holder that is
an "affiliate" of the Issuers within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such holder's business and such holder has no
arrangement or understanding with any person to participate in the distribution
of such Exchange Notes. See "The Exchange Offer -- Purpose and Effect of the
Exchange Offer" and "The Exchange Offer -- Resales of the Exchange Notes." Each
broker-dealer (a "Participating Broker-Dealer") that receives Exchange Notes for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a participating
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of Exchange Notes received in exchange for Notes where
such Notes were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities. The Issuers have agreed
that to make this Prospectus available to any Participating Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution."
If any holder of Notes is an affiliate of the Issuers, is engaged in or
intends to engage in or has any arrangement or understanding with any person to
participate in the distribution of the Exchange Notes to be acquired in the
Exchange Offer, such holder (i) cannot rely on the applicable interpretations of
the Commission and (ii) must comply with the registration requirements of the
Securities Act in connection with any resale transaction.
Holders of Notes not tendered and accepted in the Exchange Offer will
continue to hold such Notes and will be entitled to all the rights and benefits
and will be subject to the limitations applicable thereto under the Indenture
and with respect to transfer under the Securities Act. The Issuers will pay all
the expenses incurred by them incident to the Exchange Offer. See "The Exchange
Offer."
------------------------------
SEE "RISK FACTORS" ON PAGE 13 FOR A DESCRIPTION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR NOTES IN THE EXCHANGE OFFER.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 3
There has not previously been any public market for the Notes or the
Exchange Notes. The Issuers do not intend to list the Exchange Notes on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the
Exchange Notes will develop. See "Risk Factors -- Absence of Public Market."
Moreover, to the extent that Notes are tendered and accepted in the Exchange
Offer, the trading market for untendered and tendered but unaccepted Notes could
be adversely affected.
The Exchange Notes will be available initially only in book-entry form. The
Issuers expect that the Exchange Notes issued pursuant to this Exchange Offer
will be issued in the form of a Global Certificate (as defined), which will be
deposited with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global Certificate representing the Exchange Notes will be
shown on, and transfers thereof to qualified institutional buyers will be
effected through, records maintained by the Depositary and its participants.
After the initial issuance of the Global Certificate, Exchange Notes in
certified form will be issued in exchange for the Global Certificate only on the
terms set forth in the Indenture. See "Description of Exchange Notes."
AVAILABLE INFORMATION
The Issuers have filed with the Commission a Registration Statement on Form
S-4 (the "Exchange Offer Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the Securities
Act, and the rules and regulations promulgated thereunder, covering the Exchange
Notes being offered hereby. This Prospectus includes a discussion of all
material elements of the Exchange Offer Registration Statement, but does not
contain all of the information set forth therein. For further information with
respect to the Issuers and the Exchange Offer, reference is made to the Exchange
Offer Registration Statement. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Exchange Offer Registration Statement,
reference is made to the exhibit for a more complete description of the document
or matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. The Exchange Offer Registration Statement, including
the exhibits thereto, can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, DC 20549, at the Regional Offices of the Commission at 7 World Trade
Center, Suite 1300, New York, NY 10048 and at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, DC 20549, at prescribed rates. Additionally,
the Commission maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission, including the Company.
As a result of the filing of the Exchange Offer Registration Statement with
the Commission, the Issuers will become subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith will be required to file periodic reports and
other information with the Commission. The obligation of the Issuers to file
periodic reports and other information with the Commission will be suspended if
the Exchange Notes are held of record by fewer than 300 holders as of the
beginning of any fiscal year of the Company other than the fiscal year in which
the Exchange Offer Registration Statement is declared effective. The Issuers
will nevertheless be required to continue to file reports with the Commission if
the Exchange Notes are listed on a national securities exchange. In the event
the Issuers cease to be subject to the informational requirements of the
Exchange Act, the Issuers will be required under the Indenture to continue to
file with the Commission the annual and quarterly reports, information,
documents or other reports, including, without limitation, reports on Forms
10-K, 10-Q and 8-K, which would be required pursuant to the informational
requirements of the Exchange Act. Under the Indenture, the Issuers shall file
with the Trustee such annual, quarterly and other reports. Further, to the
extent that annual, quarterly or other financial reports are furnished by the
Issuers to stockholders or partners, as the case may be, generally they will
mail such reports to holders of Exchange Notes. The Issuers will furnish annual
and quarterly financial reports to stockholders or partners, as the case may be,
of the Issuers
i
<PAGE> 4
and will mail such reports to holders of Exchange Notes pursuant to the
Indenture, thus holders of Exchange Notes will receive financial reports every
quarter. Annual reports delivered to the Trustee and the holders of Exchange
Notes will contain financial information that has been examined and reported
upon, with an opinion expressed by an independent public or certified public
accountant. The Issuers will also furnish such other reports as may be required
by law.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE U.S. SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS OTHER THAN
STATEMENTS OF HISTORICAL FACTS INCLUDED IN THIS OFFERING MEMORANDUM, INCLUDING
WITHOUT LIMITATION, CERTAIN STATEMENTS UNDER THE "PROSPECTUS SUMMARY," "RISK
FACTORS," THE COMPANY," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS" AND LOCATED ELSEWHERE HEREIN
REGARDING THE COMPANY'S OPERATIONS, FINANCIAL POSITION AND BUSINESS STRATEGY,
MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. IN ADDITION, FORWARD-LOOKING
STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY
SUCH AS "MAY," "WILL," "EXPECT," "INTEND," "ESTIMATE," "ANTICIPATE," "BELIEVE,"
OR "CONTINUE" OR THE NEGATIVE THEREOF OR VARIATIONS THEREON OR SIMILAR
TERMINOLOGY. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN
SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE AT THIS TIME, THEY CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S
EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED IN THIS PROSPECTUS,
INCLUDING WITHOUT LIMITATION IN CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS
INCLUDED IN THIS PROSPECTUS AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND
ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON
ITS BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY
STATEMENTS.
TRADEMARKS AND TRADENAMES
The following items referred to in this document are trademarks which are
federally registered in the United States and abroad pursuant to applicable
intellectual property laws and are the property of the Company: Tony Roma's,
Tony Roma's Famous for Ribs and Tony Roma's A Place for Ribs.
The following items referred to in this document are claimed as trademarks
and are the property of the Company: Tony Roma's Blue Ridge Smokies, Tony Roma's
Carolina Honeys, Tony Roma's Original and Tony Roma's Red Hots.
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ii
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Holders of
the Notes should carefully consider the matters set forth under the heading
"Risk Factors." Unless the context otherwise requires, all references herein to
"Romacorp" or the "Company" with respect to periods prior to the
Recapitalization, refer to the business historically conducted by Roma
Restaurant Holdings, Inc. ("Holdings") (which has served as the operating entity
for the business prior to the Recapitalization), together with its subsidiaries,
and, with respect to periods subsequent to the Recapitalization, refer to
Holdings and its subsidiaries. References to fiscal 1994, 1995, 1996, 1997, 1998
and 1999 with respect to financial information for the Company refer to the
fiscal year ending on the Sunday preceding the last Tuesday in March for such
year. Although the data for fiscal 1994 includes 52 weeks of activity, the
Company was only owned, operated, and accounted for by NPC International, Inc.,
its Parent, for the last 42 weeks of the 52-week period. All fiscal years were
52 weeks except 1998 which was 53 weeks.
THE COMPANY
Romacorp is the operator and franchisor of the largest national casual
dining chain specializing in ribs with 194 restaurants located in 25 states in
the United States and in over 15 foreign countries. Founded in Miami in 1972,
the Company's restaurants are primarily located in Florida, Texas and
California. Both the Tony Roma's name and its "Famous for Ribs" and "A Place for
Ribs" slogans are well-recognized throughout the United States. The restaurants
offer a full and varied menu, including ribs, chicken, steaks, seafood, salads
and other menu items in a casual atmosphere which is suitable for the entire
family. Since the inception of Tony Roma's, its baby-back ribs have won numerous
consumer and industry awards in over 25 markets. In addition to its
award-winning ribs, the menu features its signature deep fried onion ring loaf.
The Tony Roma's concept is designed to serve a demographically and
geographically diverse customer base, with high quality food at moderate prices.
Tony Roma's restaurants are generally located in free-standing buildings with
approximately 200 seats and separate bar areas. The restaurants have a fun,
comfortable atmosphere with distinctive and varied decor and provide consumers
with high quality, friendly service. The Tony Roma's concept is appropriate for
a wide variety of casual dining occasions including family dinners and business
lunches.
As of March 29, 1998, the Company operated 45 Company-owned and two
joint-venture restaurants in 11 states and through its subsidiaries, franchised
94 restaurants in 19 states and 53 restaurants in international locations. For
fiscal 1998, system-wide sales, Company revenues (including net franchise
revenues) and Company EBITDA (as defined) were $350.8 million, $94.9 million and
$16.1 million, respectively. Company-owned restaurants have generated positive
comparable restaurant sales growth in 13 of the last 14 quarters. The Company
intends to continue to focus on increasing the number of Company-owned
restaurants as well as the number of franchised restaurants.
From fiscal 1995 to fiscal 1998, the average annual revenue per
Company-owned restaurant increased from approximately $1.8 million to $2.0
million, and the number of Company-owned restaurants increased from 23 to 45.
Over the same period, average annual royalties per franchised restaurant, net of
reserve for doubtful accounts, increased from approximately $54,900 to $61,600,
and the net number of franchised restaurants increased from 143 to 147.
With efforts beginning in fiscal 1995, the Company's current management,
led by its President, Robert B. Page, has continued to strategically reposition
the Tony Roma's concept by: (i) improving operations; (ii) upgrading menu
quality and selection; (iii) updating building designs and decor; (iv)
broadening its customer base; and (v) rationalizing its franchise base. As part
of such initiative, over 70% of Company-owned restaurants were either built or
significantly renovated within the last three years to meet consumer
preferences. In addition, management has improved the support provided to its
franchisees, eliminated certain underperforming franchisees and strengthened its
franchise base. The Company believes as a result of such efforts, the Company's
revenues and EBITDA grew at a compound annual growth rate of 24% and 31%,
respectively, from fiscal 1995 to fiscal 1998.
1
<PAGE> 6
COMPETITIVE STRENGTHS
Leader in Rib Category. Tony Roma's is the largest national casual dining
restaurant chain specializing in ribs in the United States. Since its inception,
Tony Roma's has won numerous consumer and industry awards for its rib recipe,
including first place in the National Rib Cook-Off and "best ribs" awards in
over 25 markets. Although several of its national competitors offer ribs as a
menu selection, the Company believes that Tony Roma's well-established and
recognized brand name makes it the leader in the rib category with a reputation
for high quality food.
Established, Internationally Recognized Restaurant Brand. With 141 U.S.
and 53 international restaurants, Tony Roma's is a well-established and
recognized brand in the United States and abroad. Operating under the slogans,
"Famous for Ribs" and "A Place for Ribs", the Company believes that the majority
of consumers in the United States identify the Tony Roma's brand with ribs. In
addition, the Company believes that international consumers are drawn to Tony
Roma's distinctly "American" dining experience and its "Best Ribs in America"
slogan. The Company has achieved strong consumer awareness levels without
substantial television advertising. Its marketing programs primarily rely on
radio, outdoor, newspaper, direct mail, yellow pages and word of mouth
advertising. The Company believes that its strong brand identity enhances its
competitive position compared to other casual dining chains.
Strong Franchise Network. The Company has 47 franchisees, most of which
own and operate two or more restaurants and the largest of which operates 24
restaurants. The Company's franchisees operate 147 restaurants in 19 states and
over 15 foreign countries (including ten restaurants in Canada and 26
restaurants in the Asia Pacific region). In addition to providing the Company
with substantial royalty revenues ($9.1 million for fiscal 1998), the franchise
network allows the Company to expand the Tony Roma's system without substantial
capital investment by the Company. From fiscal 1995 to fiscal 1998, 51 new
franchise restaurants were opened and 37 franchise restaurants, most of which
were not performing their obligations under their franchise agreements, were
closed. The Company anticipates that franchisees will open approximately 45
additional restaurants by 2001.
Broadly Appealing, High Quality Menu. The Company's restaurants offer
customers a full and varied menu, including ribs, chicken, steaks, seafood,
salads and other menu items. The items are moderately priced with entrees
typically ranging in price from $3.99 to $11.99 for lunch and $4.99 to $16.49
for dinner. Dessert selections range in price from $1.99 to $3.99. The Company
believes that the combination of its diverse and full menu selection and casual
dining ambiance appeals to a wide geographic and demographic mix of customers.
Management believes that Tony Roma's has significant expansion potential in all
50 United States as well as in most regions of the world.
Updated, Modern Restaurant Base. In fiscal 1995, the Company introduced a
new prototype which is designed to attract a broader segment of consumers. The
prototype features new lighting and light color decor packages which the Company
believes enhance the appeal of its restaurants for family dining, business
lunches and other casual dining occasions. Within the last three years, over 70%
of the Company-owned restaurants were either built or significantly renovated to
conform to the new prototype. The Company continually seeks to maintain unique
interior and exterior facility design and decor to meet consumer preferences. In
addition, the Company encourages, and if necessary can require, its franchisees
to remodel their restaurants.
Experienced and Proven Management Team. The Company's senior management
team has an average of 20 years of experience in the restaurant industry, four
of which are with Tony Roma's. Since fiscal 1995, the current management team,
led by Robert Page, has focused on repositioning the Tony Roma's concept by
implementing initiatives to improve operations and broaden consumer appeal.
GROWTH STRATEGY
The Company intends to continue the programs and initiatives that it has
put in place over the last three years to support and increase the revenues and
operating performance of its existing Company-owned and franchised restaurants.
In addition, the Company plans to achieve growth by developing new Company-owned
restaurants and increasing franchise revenues.
2
<PAGE> 7
Develop New Company-Owned Restaurants. Management has demonstrated its
ability to open and operate new restaurants, expanding the number of
Company-owned restaurants to 45 at the end of fiscal 1998 from 23 in fiscal
1995. The Company believes that the development of successful Company-owned
restaurants strengthens the Tony Roma's concept and the Company's growth
potential. The Company intends to develop and operate new restaurants and plans
to open between six to eight additional Company-owned restaurants in fiscal
1999. To finance the development of new Company-owned restaurants, the Company
expects to selectively use operating lease financing facilities thereby reducing
the average capital expenditure required per restaurant.
Increase Franchise Revenues. The Company plans to continue to strengthen
its franchise base by adding franchised restaurants in existing and new
geographic areas, both domestically and internationally. In expanding the number
of franchised restaurants, the Company focuses on its existing franchisees which
it anticipates will open the majority of the Company's franchise restaurants in
the foreseeable future. In addition, the Company targets new franchisees that
are experienced multi-unit restaurant operators with significant financial
resources. Management continually re-evaluates and upgrades the support that it
provides to franchisees. The Company believes that existing franchisees have
significant restaurant operating experience and adequate access to capital to
support the Company's growth strategy.
THE RECAPITALIZATION
The Recapitalization was effected pursuant to a Recapitalization Agreement
dated as of April 24, 1998, as amended (the "Recapitalization Agreement") by and
among NPC Restaurant Holdings, Inc. ("NPC Holdings"), NPC International, Inc.
(together with its subsidiaries, "NPC"), Sentinel Capital Partners, L.P.
("Sentinel") and Holdings. Pursuant to the Recapitalization, Holdings exchanged
a portion of its existing shares of common stock, par value $0.10 per share (the
"Old Common Stock") held by NPC Holdings for consideration consisting of a
series of Preferred Stock (the "Preferred Stock") and common stock representing
approximately 20% of the voting equity securities on a fully diluted basis
before issuance of options to management. The remaining shares of Old Common
Stock held by NPC Holdings were redeemed for cash. In addition, Sentinel and
certain other investors (the "Sentinel Investors") purchased shares of Holdings'
common stock and Preferred Stock representing approximately 80% of Holdings'
fully-diluted Common Stock immediately after giving effect to the Transactions
but before issuance of options to management. The Sentinel Investors and NPC
Holdings own securities representing approximately 80% and 20%, respectively, of
the voting power of Holdings' outstanding capital stock before issuance of
options to management.
Approximately $113.8 million was used to complete the Recapitalization,
including the repayment of approximately $1.3 million of existing indebtedness
and the payment of related estimated fees and expenses of approximately $4.7
million. In order to finance the Recapitalization: (i) the Company issued $75.0
million in aggregate principal amount of Notes in the Offering; (ii) Holdings
received an equity contribution of $27.0 million in cash from the Sentinel
Investors (the "Equity Contribution"); (iii) NPC Holdings retained equity of
Holdings having an implied value of $6.8 million (the "Retained Equity") and
(iv) the Company entered into a $15.0 million revolving credit facility (the
"New Revolving Credit Facility") with The Provident Bank, of which $5.0 million
was drawn at closing. The Recapitalization consideration was subject to certain
post-closing adjustments based on the Company's working capital at closing and
performance-based payments with respect to certain Company-owned and franchised
restaurants. The Offering was contingent upon the concurrent consummation of the
Recapitalization. The foregoing transactions are collectively referred to herein
as the "Transactions."
The Company entered into a Transitional Financial and Accounting Services
Agreement (the "Transition Services Agreement") whereby NPC will continue to
provide administrative services to the Company for a negotiated fee for a period
of up to one year. Services provided will include accounting services, payroll
services and use of NPC's proprietary restaurant technology system software (the
"POS System"). As part of the Transition Services Agreement, the Company was
granted a perpetual license to use the POS System. See "Certain Relationships
and Related Transactions."
3
<PAGE> 8
The following table illustrates the estimated sources and uses of funds in
connection with the consummation of the Transactions.
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
SOURCES OF FUNDS
Notes....................................................... $ 75,000
New Revolving Credit Facility............................... 5,000
Equity Contribution and Retained Equity(1).................. 33,750
--------
Total sources of funds................................. $113,750
========
USES OF FUNDS
Recapitalization consideration(2)........................... $101,000
Equity interest retained by NPC Holdings.................... 6,750
Repayment of existing indebtedness.......................... 1,333
Estimated fees and expenses................................. 4,667
--------
Total uses of funds.................................... $113,750
========
</TABLE>
- ---------------
(1) Includes a $27.0 million equity investment made by the Sentinel Investors
and a $6.8 million retained equity interest of NPC Holdings.
(2) The Recapitalization consideration was subject to certain post-closing
adjustments based on the Company's working capital at closing and
performance-based payments with respect to certain Company-owned and
franchised restaurants.
---------------
The executive offices of the Company are located at 9304 Forest Lane, Suite
200, Dallas, Texas 75243, and its telephone number is (214) 343-7800.
THE SPONSOR
Sentinel is a private equity fund that specializes in buying and building
middle market companies, primarily in the consumer sector. Sentinel's strategy
is to acquire businesses in partnership with management teams and to work
closely with its management partners to improve the long-term value of its
portfolio companies. Sentinel was formed in 1995 by two former principals of
First Century Partners, a venture capital affiliate of Salomon Smith Barney.
During the past 17 years, Sentinel's principals have invested in 24 companies,
seven of which have undertaken public offerings. The current annual aggregate
revenue of these companies is in excess of $6 billion.
4
<PAGE> 9
THE OFFERING
NOTES......................... The Notes were sold by the Company on June 26,
1998 to Salomon Brothers Inc and Schroder & Co.
Inc. (the "Initial Purchasers") pursuant to a
Purchase Agreement dated March 3, 1998 (the
"Purchase Agreement"). The Initial Purchasers
subsequently resold the Notes to qualified
institutional buyers pursuant to Rule 144A
under the Securities Act and to a limited
number of institutional accredited investors
that agreed to comply with certain transfer
restrictions and other conditions.
EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT.............. Pursuant to the Purchase Agreement, the Issuers
and the Initial Purchasers entered into a
Registration Rights Agreement dated July 1,
1998, which grants the holder of the Notes
certain exchange and registration rights. The
Exchange Offer is intended to satisfy such
exchange rights which terminate upon the
consummation of the Exchange Offer.
THE EXCHANGE OFFER
SECURITIES OFFERED............ $75,000,000 aggregate principal amount of
Series B 12% Senior Notes due 2006.
THE EXCHANGE OFFER............ $1,000 principal amount of the Exchange Notes
in exchange for each $1,000 principal amount of
Notes. As of the date hereof, $75,000,000
aggregate principal amount of Notes are
outstanding. The Issuers will issue the
Exchange Notes to holders on or promptly after
the Expiration Date.
Based on an interpretation by the staff of the
Commission set forth in no-action letters
issued to third parties, the Issuers believe
that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Notes may be
offered for resale, resold and otherwise
transferred by any holder thereof (other than
any such holder which is an "affiliate" of the
Issuers within the meaning of Rule 405 under
the Securities Act) without compliance with the
registration and prospectus delivery provisions
of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary
course of such holder's business and that such
holder does not intend to participate and has
no arrangement or understanding with any person
to participate in the distribution of such
Exchange Notes.
Each Participating Broker-Dealer that receives
Exchange Notes for its own account pursuant to
the Exchange Offer must acknowledge that it
will deliver a prospectus meeting the
requirements of the Securities Act in
connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by
so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in
connection with resales of Exchange Notes
received in exchange for Notes where such Notes
5
<PAGE> 10
were acquired by such Participating
Broker-Dealer as a result of market-making
activities or other trading activities. The
Issuers have agreed that they will make this
Prospectus available to any Participating
Broker-Dealer for use in connection with any
such resale. See "Plan of Distribution."
Any holder who tenders in the Exchange Offer
with the intention to participate, or for the
purpose of participating, in a distribution of
the Exchange Notes could not rely on the
position of the staff of the Commission
enunciated in no-action letters and, in the
absence of an exemption therefrom, must comply
with the registration and prospectus delivery
requirements of the Securities Act in
connection with any resale transaction. Failure
to comply with such requirements in such
instance may result in such holder incurring
liability under the Securities Act for which
the holder is not indemnified by the Issuers.
EXPIRATION DATE............... 5:00 p.m., New York City time, on ,
1998 unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended.
ACCRUED INTEREST ON THE
EXCHANGE NOTES AND THE
NOTES....................... Each Exchange Note will bear interest from its
issuance date. Holders of Notes that are
accepted for exchange will receive, in cash,
accrued interest thereon to, but not including,
the issuance date of the Exchange Notes. Such
interest will be paid with the first interest
payment on the Exchange Notes. Interest on the
Notes accepted for exchange will cease to
accrue upon issuance of the Exchange Notes.
CONDITIONS TO THE EXCHANGE
OFFER......................... The Exchange Offer is subject to certain
customary conditions, which may be waived by
the Issuers. See "The Exchange Offer --
Conditions."
PROCEDURES FOR TENDERING
NOTES......................... Each holder of Notes wishing to accept the
Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a
facsimile thereof, in accordance with the
instructions contained herein and therein, and
mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with
the Notes and any other required documentation
to the Exchange Agent (as defined) at the
address set forth herein. By executing the
Letter of Transmittal, each holder will
represent to the Issuers that, among other
things, the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the
ordinary course of business of the person
receiving such Exchange Notes, whether or not
such person is the holder, that neither the
holder nor any such other person has any
arrangement or understanding with any person to
participate in the distribution of such
Exchange Notes and that neither the holder nor
any such other person is an "affiliate," as
defined under Rule 405 of the Securities Act,
of the Company. See "The Exchange
Offer -- Purpose and Effect of the Exchange
Offer" and "-- Procedures for Tendering."
6
<PAGE> 11
UNTENDERED NOTES.............. Following the consummation of the Exchange
Offer, holders of Notes eligible to participate
but who do not tender their Notes will not have
any further exchange rights and such Notes will
continue to be subject to certain restrictions
on transfer. Accordingly, the liquidity of the
market for such Notes could be adversely
affected.
CONSEQUENCES OF FAILURE TO
EXCHANGE.................... The Notes that are not exchanged pursuant to
the Exchange Offer will remain restricted
securities. Accordingly, such Notes may be
resold only: (i) to the Issuers; (ii) pursuant
to Rule 144A or Rule 144 under the Securities
Act or pursuant to some other exemption under
the Securities Act; (iii) outside the United
States to a foreign person pursuant to the
requirements of Rule 904 under the Securities
Act; or (iv) pursuant to an effective
registration statement under the Securities
Act. See "The Exchange Offer -- Consequences of
Failure to Exchange."
SHELF REGISTRATION
STATEMENT..................... If any holder of the Notes (other than any such
holder which is an "affiliate" of the Issuers
within the meaning of Rule 405 under the
Securities Act) is not eligible under
applicable securities laws to participate in
the Exchange Offer, and such holder has
provided information regarding such holder and
the distribution of such holder's Notes to the
Issuers for use therein, the Issuers have
agreed to register the Notes on a shelf
registration statement (the "Shelf Registration
Statement") and use its best efforts to cause
it to be declared effective by the Commission
as promptly as practicable on or after the
consummation of the Exchange Offer. The Issuers
have agreed to maintain the continuous
effectiveness of the Shelf Registration
Statement for, under certain circumstances, a
maximum of two years, to cover resales of the
Notes held by any such holders.
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS............. Any beneficial owner whose Notes are registered
in the name of a broker, dealer, commercial
bank, trust company or other nominee and who
wishes to tender should contact such registered
holder promptly and instruct such registered
holder to tender on such beneficial owner's
behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner
must, prior to completing and executing the
Letter of Transmittal and delivering its Notes,
either make appropriate arrangements to
register ownership of the Notes in such owner's
name or obtain a properly completed bond power
from the registered holder. The transfer of
registered ownership may take considerable
time. The Issuers will keep the Exchange Offer
open for not less than twenty days in order to
provide for the transfer of registered
ownership.
GUARANTEED DELIVERY
PROCEDURES.................... Holders of Notes who wish to tender their Notes
and whose Notes are not immediately available
or who cannot deliver their Notes, the Letter
of Transmittal or any other documents required
by the Letter of Transmittal to the Exchange
Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration
Date must tender their Notes according to the
guaranteed delivery procedures set forth in
"The Exchange Offer -- Guaranteed Delivery
Procedures."
7
<PAGE> 12
WITHDRAWAL RIGHTS............. Tenders may be withdrawn at any time prior to
5:00 p.m., New York City time, on the
Expiration Date.
ACCEPTANCE OF NOTES AND
DELIVERY OF EXCHANGE NOTES.... The Issuers will accept for exchange any and
all Notes which are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The Exchange
Notes issued pursuant to the Exchange Offer
will be delivered promptly following the
Expiration Date. See "The Exchange
Offer -- Terms of the Exchange Offer."
USE OF PROCEEDS............... There will be no cash proceeds to the Issuers
from the exchange pursuant to the Exchange
Offer.
EXCHANGE AGENT................ United States Trust Company of New York
THE EXCHANGE NOTES
GENERAL....................... The form and terms of the Exchange Notes are
the same as the form and terms of the Notes
(which they replace) except that: (i) the
Exchange Notes bear a Series B designation;
(ii) the Exchange Notes have been registered
under the Securities Act and, therefore, will
not bear legends restricting the transfer
thereof; and (iii) the holders of Exchange
Notes will not be entitled to certain rights
under the Registration Rights Agreement,
including the provisions providing for an
increase in the interest rate on the Notes in
certain circumstances relating to the timing of
the Exchange Offer, which rights will terminate
when the Exchange Offer is consummated. See
"The Exchange Offer -- Purpose and Effect of
the Exchange Offer." The Exchange Notes will
evidence the same debt as the Notes and will be
entitled to the benefits of the Indenture. See
"Description of Exchange Notes." The Notes and
the Exchange Notes are referred to herein
collectively as the "Senior Notes."
SECURITIES OFFERED............ $75,000,000 aggregate principal amount of
Series B 12% Senior Notes due 2006.
MATURITY DATE................. July 1, 2006.
MATURITY RATE AND PAYMENT
DATES......................... Interest on the Exchange Notes will accrue from
the date of original issuance and is payable
semi-annually on each January 1 and July 1,
commencing January 1, 1999.
RANKING....................... The Exchange Notes will rank pari passu in
right of payment with any future senior
indebtedness of the Company, including
borrowings under the New Revolving Credit
Facility. However, all borrowings under the New
Revolving Credit Facility will be secured by a
first priority lien on substantially all of the
assets of the Company.
GUARANTEES.................... The Exchange Notes will be guaranteed on a
senior basis by each of the Guarantors and
certain of the Company's Subsidiaries acquired
or formed after the Issue Date.
8
<PAGE> 13
OPTIONAL REDEMPTION........... The Exchange Notes will be redeemable, in whole
or in part, at the option of the Company on or
after July 1, 2003 at the redemption prices set
forth herein, plus accrued and unpaid interest
to the date of redemption. In addition, at any
time on or prior to July 1, 2001, the Company,
at its option, may redeem up to 35% of the
aggregate principal amount of the Senior Notes
originally issued with the net cash proceeds of
one or more Public Equity Offerings (as
defined) or Strategic Equity Investments (as
defined), at the redemption price set forth
herein, plus accrued interest to the date of
redemption; provided that at least 65% of the
aggregate principal amount of Senior Notes
issued remains outstanding immediately
following such redemption.
CHANGE OF CONTROL............. Upon a Change of Control, each holder of the
Exchange Notes will have the right to require
the Company to repurchase such holder's
Exchange Notes at a price equal to 101% of the
principal amount thereof, plus accrued and
unpaid interest to the date of repurchase.
There can be no assurance that the Company will
have sufficient funds to purchase all of the
Exchange Notes in the event of a Change of
Control or that the Company would be able to
obtain financing for such purpose on favorable
terms, if at all.
CERTAIN COVENANTS............. The Indenture governing the Exchange Notes (the
"Indenture") contains certain covenants that,
among other things, limit the ability of the
Company and its subsidiaries to incur
additional indebtedness, pay dividends or make
investments and certain other restricted
payments, consummate certain asset sales, enter
into certain transactions with affiliates,
incur liens, impose restrictions on the ability
of a subsidiary to pay dividends or make
certain payments to the Company and its
subsidiaries, or merge or consolidate with any
other person or sell, assign, transfer, lease,
convey or otherwise dispose of all or
substantially all of the assets of the Company.
For additional information regarding the Exchange Notes, see "Description
of Exchange Notes."
EXCHANGE OFFER; REGISTRATION RIGHTS
Pursuant to a Registration Rights Agreement (the "Registration Rights
Agreement") entered into on July 1, 1998 among the Company, the Guarantors and
the Initial Purchasers, the Company agreed (i) to file a registration statement
(the "Exchange Offer Registration Statement") with respect to an offer to
exchange (the "Exchange Offer") the Notes for new notes (the "Exchange Notes")
of the Company, which Exchange Notes will have terms substantially identical in
all material respects to the Notes (except that the Exchange Notes will not
contain terms with respect to transfer restrictions), within 60 days after the
Issue Date, (ii) to use its best efforts to cause such registration statement to
become effective under the Securities Act within 150 days after the Issue Date
and (iii) upon the Exchange Offer Registration Statement being declared
effective, to offer the Exchange Notes in exchange for surrender of the Notes.
In the event that applicable law or interpretations of the staff of the
Commission do not permit the Company to effect the Exchange Offer, or if for any
other reason the Exchange Offer is not consummated, or if certain holders of the
Notes are not permitted to participate in, or do not receive the benefit of, the
Exchange Offer, the Company will use its best efforts to cause to become
effective a shelf registration statement with respect to the resale of the Notes
and to keep such shelf registration statement effective until two years after
the Issue Date or such shorter period ending when all the Notes have been sold
thereunder. The interest rate on the Notes is subject to increase
9
<PAGE> 14
under certain circumstances if the Company is not in compliance with its
obligations under the Registration Rights Agreement. See "Exchange Offer;
Registration Rights."
RISK FACTORS
Holders of the Notes should carefully consider the specific matters set
forth under "Risk Factors" as well as the other information and data included in
this Offering Memorandum prior to tendering their Notes in the Exchange Offer.
10
<PAGE> 15
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL AND OPERATING DATA
The following table sets forth: (i) summary historical financial data of
the Company for the fiscal years ended March 24, 1996, March 23, 1997, March 29,
1998 and the thirteen weeks ended June 22, 1997 and June 28, 1998; (ii) summary
historical balance sheet data as of June 28, 1998, (iii) summary unaudited pro
forma financial data for the fiscal year ended March 29, 1998 and the thirteen
weeks ended June 28, 1998; and (iv) summary unaudited pro forma balance sheet
data as of June 28, 1998. The summary historical financial data for fiscal 1996,
1997 and 1998 and as of March 29, 1998 were derived from the audited
consolidated financial statements of the Company which are included elsewhere
herein, together with the report of Ernst & Young LLP, independent auditors. The
summary historical financial information for the thirteen weeks ended June 22,
1997 and June 28, 1998 has been derived from, and is qualified by reference to,
the unaudited financial statements of the Company included elsewhere herein. The
unaudited consolidated financial statements have been prepared on the same basis
as the audited consolidated financial statements and, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the information included therein.
Operating results for the thirteen weeks ended June 28, 1998 are not necessarily
indicative of the results that may be expected for the entire year ended March
28, 1999. The summary unaudited pro forma financial data for fiscal 1998 gives
effect to the Transactions as if each had occurred on March 24, 1997. The
summary unaudited pro forma balance sheet data as of June 28, 1998 gives effect
to the Transactions as if each had occurred on March 29, 1998. The summary
unaudited pro forma financial data is intended for informational purposes and
should not be considered indicative of either future results of operations or
the results that might have occurred if the Transactions had been consummated on
the indicated date or had been in effect for the period presented. The following
table should be read in conjunction with "Selected Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the historical consolidated financial statements and the notes
related thereto of the Company included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FISCAL YEAR THIRTEEN WEEKS ENDED
----------------------------- ------------------------------
1996 1997 1998 JUNE 22, 1997 JUNE 28, 1998
------- ------- ------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Net restaurant sales.......... $51,499 $68,778 $86,408 $20,225 $22,513
Net franchise revenues........ 7,570 8,526 8,482 2,050 2,114
------- ------- ------- ------- -------
Total revenues........... 59,069 77,304 94,890 22,275 24,627
Depreciation and amortization.... 3,993 5,425 7,197 1,755 1,677
Operating income(1).............. 5,529 7,001 8,883 2,078 2,694
Net interest expense............. 876 1,550 2,412 476 663
Income taxes..................... 545 2,017 2,315 568 779
Net income....................... $ 351 $ 3,476 $ 4,165 $ 1,055 $ 1,446
OTHER FINANCIAL DATA:
EBITDA(2)........................ $ 9,265 $12,468 $16,089 $ 3,854 $ 4,565
EBITDA Margin(2)(3).............. 15.7% 16.1% 17.0% 17.3% 18.5%
Capital expenditures:
Maintenance................... $ 345 $ 246 $ 478 $ 46 $ 84
Renovation.................... 324 438 653 7 23
New restaurant development.... 14,190 23,151 9,479 4,328 1,805
------- ------- ------- ------- -------
Total capital
expenditures........... $14,859 $23,835 $10,610 $ 4,381 $ 1,912
======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
-----------------------------
THIRTEEN WEEKS
ENDED
FISCAL 1998 JUNE 28, 1998
----------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
PRO FORMA FINANCIAL DATA:(4)
EBITDA(2)(5).............................................. $15,789 $ 4,490
Interest expense.......................................... 9,860 2,465
Ratio of EBITDA to interest expense(2).................... 1.6x 1.8x
Ratio of total debt to EBITDA(2) (N/M -- not
meaningful)............................................ 5.1x N/M
Ratio of earnings to fixed charges(6)..................... 0.9x 1.1x
</TABLE>
11
<PAGE> 16
<TABLE>
<CAPTION>
AT JUNE 28, 1998
------------------------
ACTUAL PRO FORMA(7)
------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Facilities and equipment, net............................. $53,294 $53,294
Total assets.............................................. 75,776 79,498
Total debt and payables to affiliate(8)................... 35,220 80,000
Shareholders' equity (deficit)............................ 32,738 (8,320)
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR THIRTEEN WEEKS ENDED
------------------------------ -----------------------------
1996 1997 1998 JUNE 22, 1997 JUNE 28, 1998
-------- -------- -------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
RESTAURANT OPERATING DATA:
Restaurant sales:
Company-owned...................... $ 51,499 $ 68,778 $ 86,408 $20,225 $22,513
Joint Venture...................... 3,122 3,229 3,281 810 856
Franchised......................... 241,691 248,891 261,165 64,246 63,772
-------- -------- -------- ------- -------
Total system-wide sales....... $296,312 $320,898 $350,854 $85,281 $87,141
======== ======== ======== ======= =======
Restaurants open (at period end):
Company-owned...................... 33 40 45 41 45
Joint Venture...................... 2 2 2 2 2
Franchised
Domestic...................... 100 91 94 92 93
International................. 42 49 53 50 53
-------- -------- -------- ------- -------
Total Franchised............ 142 140 147 142 146
-------- -------- -------- ------- -------
Total.................... 177 182 194 185 193
======== ======== ======== ======= =======
Comparable restaurant sales
increase(9)........................ 2.6% 2.2% 0.9% 2.5% 2.9%
Average royalties per franchised
restaurant......................... $ 56.5 $ 60.3 $ 61.6 $ 16.1 $ 15.4
</TABLE>
- ---------------
(1) Before impairment and loss provision of $3.5 million for fiscal 1996.
Including impairment and loss provision of $3.5 million, operating income
would have been $2.0 million for fiscal 1996.
(2) As used herein, "EBITDA" represents net income plus: (i) net interest; (ii)
income taxes; (iii) depreciation and amortization; (iv) provision for
disposition of assets; and (v) asset write-downs under Statement of
Financial Accounting Standards No. 121. The Company has included
information concerning EBITDA in this Prospectus because it believes that
such information is used by certain investors as one measure of an issuer's
historical ability to service debt. EBITDA is not a measure determined in
accordance with generally accepted accounting principles ("GAAP") and
should not be considered as an alternative to, or more meaningful than,
earnings from operations or other traditional indications of an issuer's
operating performance.
(3) EBITDA margin represents EBITDA divided by total revenues.
(4) Pro forma financial data gives effect to: (i) the Offering; (ii) the
Recapitalization; (iii) the New Revolving Credit Facility; and (iv)
application of the proceeds of the Offering, as set forth in "Use of
Proceeds", as if each occurred on March 24, 1997.
(5) Pro Forma EBITDA reflects the deduction of a management fee of $300,000.
(6) For purposes of computing this ratio, earnings consist of income before
taxes plus fixed charges. Fixed charges consist of interest expense on all
indebtedness and the estimated interest portion of rental expense. For
fiscal 1998, on a pro forma basis giving effect to the Transactions, the
Company's earnings would have been insufficient to cover fixed charges by
$936,000.
(7) Pro forma balance sheet data gives effect to: (i) the Offering; (ii) the
Recapitalization; (iii) the New Revolving Credit Facility; and (iv)
application of the proceeds of the Offering, as set forth in "Use of
Proceeds", as if each occurred on March 29, 1998.
(8) Includes current portion of long-term debt of $444,000.
(9) Comparable restaurant sales increase for each period is calculated using
sales of Company-owned restaurants that have been open for at least 18
months.
12
<PAGE> 17
RISK FACTORS
Holders of the Notes should consider carefully the following factors as
well as the other information included in this Prospectus prior to tendering
their Notes in the Exchange Offer.
RISK FACTORS ASSOCIATED WITH FINANCIAL LEVERAGE AND THE EXCHANGE NOTES
High Level of Indebtedness; Ability to Service Indebtedness
The Company is highly leveraged. At June 28, 1998, on a pro forma basis,
the Company has approximately $80.0 million of total consolidated indebtedness
outstanding and had total stockholder's deficit of $8.3 million. Subject to
certain restrictions in the Indenture and the New Revolving Credit Facility, the
Company may incur additional indebtedness from time to time to provide for
working capital or capital expenditures or for other purposes.
The level of the Company's indebtedness could have important consequences
to holders of the Exchange Notes, including, but not limited to, the following:
(i) a substantial portion of the Company's cash flow from operations must be
dedicated to debt service and will not be available for other purposes; (ii) the
Company's ability to obtain additional financing in the future, as needed, may
be limited; (iii) the Company's leveraged position and covenants contained in
the Indenture may limit its ability to grow and make capital improvements and
acquisitions; (iv) the Company's level of indebtedness may make it more
vulnerable to economic downturns; and (v) the Company may be at a competitive
disadvantage because some of the Company competitors are less leveraged,
resulting in greater operational and financial flexibility for such competitors.
The Company currently anticipates that its operating cash flow will be
sufficient to meet its operating expenses and to service its debt requirements
as they become due. However, the ability of the Company to satisfy its debt
obligations, including the Exchange Notes, will be primarily dependent upon the
future financial and operating performance of the Company. Such performance is
dependent upon financial, business and other general economic factors, many of
which are beyond the control of the Company. If the Company is unable to
generate sufficient cash flow to meet the debt service obligations of the
Company or provide adequate long-term liquidity, the Company will have to pursue
one or more alternatives, such as reducing or delaying capital expenditures,
refinancing debt, selling assets or raising equity capital. There can be no
assurance that such alternatives could be accomplished on satisfactory terms, if
at all, or in a timely manner.
The Exchange Notes will effectively be subordinated to all secured debt of
the Company and the Guarantors, including indebtedness under the $15.0 million
New Revolving Credit Facility, of which $5.0 million is outstanding. The
Indenture permits the Company or the Guarantors to incur additional secured
indebtedness. See "Description of Exchange Notes."
Possible Effects of Fraudulent Conveyance Laws
The Company believes that the indebtedness represented by the Exchange
Notes was incurred for proper purposes and in good faith, and that, based on
present forecasts and other financial information, the Company will have
sufficient capital for carrying on its businesses and will be able to pay its
debts as they mature and become due. Notwithstanding management's belief, if a
court of competent jurisdiction in a suit by an unpaid creditor or a
representative of creditors (such as a trustee in bankruptcy or a
debtor-in-possession) were to find that, at the time the Company consummated the
Transactions, the Company or a Guarantor (i) intended to hinder, delay or
defraud any existing or future creditor or contemplated insolvency with a design
to prefer one or more creditors to the exclusion in whole or in part of others
or (ii) did not receive fair consideration or reasonably equivalent value for
issuing the Notes or Guarantees and the Company or Guarantor (a) was insolvent,
(b) was rendered insolvent by reason of the Transactions, (c) was engaged or
about to engage in a business or transaction for which its remaining assets
constituted unreasonably small capital to carry on its business or (d) intended
to incur, or believed that it would incur, debts beyond its ability to pay such
debts as they matured, such court could avoid such Notes or Guarantees. A
possible consequence of such avoidance would be that a court could void the
Company's or Guarantor's obligations under the Exchange Notes or
13
<PAGE> 18
Guarantees or alternatively subordinate the indebtedness represented by the
Exchange Notes or Guarantees to claims of other creditors of the Company or
Guarantor.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the relevant jurisdiction. Generally, however, a company would
be considered insolvent for purposes of the foregoing if the present fair
saleable value of such company's assets is less than the amount that will be
required to pay its probable liability on existing debts as they become absolute
and mature. In rendering its opinion on the validity of the Notes and the
Guarantees counsel for each of the Company and the Initial Purchasers will
express no opinion as to federal or state laws relating to fraudulent transfers.
Change of Control
Upon the occurrence of a Change of Control, the Company will, subject to
certain conditions, be required to offer to purchase all of the Senior Notes
then outstanding at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the purchase date. See "Description
of Exchange Notes -- Change of Control." If a Change of Control were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the purchase price for all of the Senior Notes that it might be required to
purchase. The exercise by the respective holders of the Exchange Notes of their
right to require the Company, to repurchase the Exchange Notes upon the
occurrence of a Change of Control could also cause a default under other
indebtedness of the Company, even if the Change of Control itself does not,
because of the financial effect of such repurchase on the Company. Additionally,
there can be no assurance that, in the event of a Change of Control, the Company
will be contractually permitted under the terms of other outstanding
indebtedness and obligations to pay the required purchase price for all of the
Exchange Notes tendered by holders thereof upon the occurrence of a Change of
Control.
Restrictions Imposed by Terms of Indebtedness
The Indenture and the New Revolving Credit Facility contain certain
covenants that restrict, among other things, the ability of the Company to incur
additional indebtedness, issue preferred stock, incur liens, pay dividends or
make certain other restricted payments, consummate certain asset sales, enter
into certain transactions with affiliates, merge or consolidate with any other
person or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company and its subsidiaries. In
addition, the New Revolving Credit Facility requires the Company to maintain
certain specified financial ratios and tests. The ability of the Company to
comply with such financial ratios and tests may be affected by events beyond the
Company's control, and there can be no assurance that the Company will meet
those tests. If the Company fails to meet such financial ratios or tests or to
comply with the other provisions of the New Revolving Credit Facility, future
borrowing under the New Revolving Credit Facility may be prohibited and the
amount outstanding under the New Revolving Credit Facility and/or the Exchange
Notes could become immediately due and payable unless the lenders party to the
New Revolving Credit Facility or the holders of the Exchange Notes agree to
modify or waive such provisions. In the event of a default under the New
Revolving Credit Facility, the lenders thereunder could elect to declare all
amounts borrowed thereunder to be immediately due and payable, terminate
commitments to lend and proceed against the collateral securing the New
Revolving Credit Facility. See "Description of Exchange Notes--Certain
Covenants."
Upon an event of default under the Indenture, the lenders thereunder could
elect to declare all amounts outstanding thereunder, together with accrued
interest, to be immediately due and payable.
Absence of Public Market
Prior to the Exchange Offer, there has been no public market for the Notes.
The Notes have not been registered under the Securities Act and will be subject
to restrictions on transferability to the extent that they are not exchanged for
Exchange Notes by holders who are entitled to participate in this Exchange
Offer. The holders of Notes (other than any such holder that is an "affiliate"
of the Issuers within the meaning of Rule 405 under the Securities Act) who are
not eligible to participate in the Exchange Offer are entitled to certain
registration rights, and the Issuers are required to file a Shelf Registration
Statement with respect to such Notes. The Exchange Notes are new securities for
which there currently is no market. The Exchange
14
<PAGE> 19
Notes are eligible for trading by qualified buyers in the Private Offerings,
Resale and Trading though Automated Linkages (PORTAL) market. The Issuers do not
intend to apply for listing of the Exchange Notes, on any securities exchange or
for quotation through the National Association of Securities Dealers Automated
Quotation System. Although the Exchange Notes are eligible for trading through
PORTAL, the Exchange Notes may trade at a discount from their initial offering
price, depending upon prevailing interest rates, the market for similar
securities, the Company's performance and other factors. The Issuers have been
advised by the Initial Purchasers that they currently intend to make a market in
the Exchange Notes as permitted by applicable law and regulations; however, the
Initial Purchasers are not obligated to do so and any such market-making
activities, if commenced, may be discontinued at any time without notice. In
addition, such market-making activities may be limited during the Exchange Offer
and pendency of the Shelf Registration Statement. Therefore, there can be no
assurance that an active market for any of the Exchange Notes will develop,
either prior to or after the Issuers' performance of their obligations under the
Registration Rights Agreement. See "Description of Exchange Notes."
The Exchange Notes generally will be permitted to be resold or otherwise
transferred (subject to the restrictions described under "Description of
Exchange Notes") by each holder without the requirement of further registration.
The Exchange Notes, however, will also constitute a new issue of securities with
no established trading market. The Exchange Offer will not be conditioned upon
any minimum or maximum aggregate principal amount of Notes being tendered for
exchange. No assurance can be given as to the liquidity of the trading market
for the Exchange Notes, or, in the case of non-exchanging holders of Notes, the
trading market for the Notes following the Exchange Offer.
The liquidity of, and trading market for, the Exchange Notes also may be
adversely affected by general declines in the market or by declines in the
market for similar securities. Such declines may adversely affect such liquidity
and trading markets independently of the financial performance of, and prospects
for, the Company.
Exchange Offer Procedures
Issuance of the Exchange Notes in exchange for the Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Issuers of such
Notes, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, holders of the Notes desiring to tender
such Notes in exchange for Exchange Notes should allow sufficient time to ensure
timely delivery. The Issuers are under no duty to give notification of defects
or irregularities with respect to the tenders of Notes for exchange. Notes that
are not tendered or are tendered but not accepted will, following the
consummation of the Exchange Offer, continue to be subject to the existing
restrictions upon transfer thereof and, upon consummation of the Exchange Offer,
certain registration rights under the Exchange and Registration Rights Agreement
will terminate. In addition, any holder of Notes who tenders in the Exchange
Offer for the purpose of participating in a distribution of the Exchange Notes
may be deemed to have received restricted securities and, if so, will be
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transactions. Each
Participating Broker-Dealer that receives Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired by such Participating
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution." To the
extent that Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Notes could be adversely
affected. See "The Exchange Offer."
RISK FACTORS ASSOCIATED WITH THE BUSINESS
Risks Associated with the Food Service Industry
Food service businesses are often affected by changes in consumer tastes,
national, regional and local economic conditions, demographic trends, traffic
patterns, the cost and availability of labor, purchasing power, availability of
products and the type, number and location of competing restaurants. The Company
could also be substantially adversely affected by publicity resulting from food
quality, illness, injury or other health concerns or alleged discrimination or
other operating issues stemming from one location or a limited number
15
<PAGE> 20
of locations, whether or not the Company is liable. In addition, factors such as
increased costs of goods, regional weather conditions and the availability of
experienced management and hourly employees may also adversely affect the food
service industry in general and the Company's business, financial condition and
results of operations.
Competition
The Company's business and the restaurant industry in general are highly
competitive and are often affected by changes in consumer tastes and eating
habits, national, regional and local economic conditions, population and
demographic trends, traffic patterns and the location and number of, and type of
food served by, competing restaurants. The Company competes directly and
indirectly with all restaurants, from national and regional chains to local
establishments, including national and small rib chains and local independent
rib restaurants. The Company competes primarily on the basis of quality of food
and service, ambiance, location and price-value relationship. Many of the
Company's competitors are well-established in the mid-priced casual dining
segment and have access to greater financial, marketing and other resources than
the Company.
Rib Pricing Risks.
Baby-back ribs represent approximately 25% of the Company's cost of sales.
Because ribs are a by-product of pork processing, their price is influenced
largely by the demand for boneless pork. Historically, the cost of baby-back
ribs has been volatile. Significant changes in the prices of ribs could
significantly increase the Company's cost of sales and adversely effect the
business, results of operations and financial condition of the Company. The
Company actively manages its rib costs through supply commitments in advance of
a specific need; however, the arrangements are terminable at will at the option
of either party without prior notice. Therefore, there can be no assurance that
any of the supply commitments will not be terminated in the future. As a result,
the Company is subject to the risk of substantial and sudden price increases,
shortages or interruptions in supply of such items, which could have a material
adverse effect its the business, financial condition and results of operations.
Ability to Locate and Secure Acceptable Restaurant Sites
The success of restaurants is significantly influenced by location. There
can be no assurance that current locations will continue to be attractive or
that additional locations can be located and secured at reasonable costs, as
demographic patterns change. It is possible that the current locations or
economic conditions where restaurants are located could decline in the future,
resulting in potentially reduced sales in those locations. There is also no
assurance that new sites will produce the same results as past sites.
Regulation
All of the Company's operations are subject to various federal, state and
local laws that affect its business, including laws and regulations relating to
employment, health, sanitation, alcoholic beverage control and safety standards.
To date, federal and state environmental regulations have not had a material
effect on the Company's operations, but more stringent and varied requirements
of local governmental bodies with respect to zoning, building codes, land use
and environmental factors have in the past increased, and can be expected in the
future to increase, the cost of, and the time required for opening new
restaurants. Difficulties or failures in obtaining required licenses or
approvals could delay or prohibit the opening of new restaurants. In some
instances, the Company may have to obtain zoning variances and land use permits
for its new restaurants. The Company believes it is operating in compliance with
all material laws and regulations governing its operations.
Alcoholic beverage control regulations require each of the Company's
restaurants to apply to a state authority and, in certain locations, county or
municipal authorities for a license to sell alcoholic beverages. Generally, the
Company's licenses to sell alcoholic beverages must be renewed annually and may
be suspended or revoked at any time for cause, including violation by the
Company or its employees of any law or regulation pertaining to alcoholic
beverage control, such as those regulating the minimum age of patrons or
employees, advertising, wholesale purchasing and inventory control. In addition,
each restaurant requires food service licenses from local health authorities,
and the development and construction of additional restaurants will be subject
to compliance with applicable zoning, land use and environmental regulations.
Difficulty or
16
<PAGE> 21
failure in obtaining or retaining the required licenses or approvals could have
a material adverse effect on the business, financial condition and results of
operations of the Company, including the delay or prevention of the opening of a
new restaurant in a particular location or the termination of the franchise
agreement pertaining to such restaurant.
The Company may be subject in certain states to "dram-shop" statutes which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment that wrongfully served alcoholic beverages to such
intoxicated person. The Company carries liquor liability insurance as part of
its existing comprehensive general liability insurance and is not a defendant in
any lawsuit or claim involving "dram-shop" statutes.
The Company is also subject to a number of federal and state laws
regulating franchise offers, sales and the franchise relationship. Such laws
generally impose certain registration and disclosure requirements on franchisors
in the offer and sale of franchises and, in certain cases, also apply
substantive standards to the relationship between franchisor and franchisee. The
Company must also adhere to Federal Trade Commission regulations governing
disclosures in the sale of franchises.
The Company is subject to the Fair Labor Standards Act, which governs such
matters as minimum wages, overtime and other working conditions and other
employment laws and regulations. A substantial majority of the Company's food
service personnel are paid at rates related to the minimum wage and,
accordingly, increases in the minimum wage result in higher labor costs. In
addition, legislation mandating health coverage for all employees, if passed,
will increase benefit costs since most hourly restaurant employees are not
currently covered under Company plans. The Company cannot always effect
immediate price increases to offset higher costs, and no assurance can be given
that the Company will be able to do so in the future.
Reliance on Franchisees
The continued growth of the Company is, in part, dependent upon its ability
to attract and retain qualified franchisees and the ability of its franchisees
to maximize penetration of their designated markets and to operate their
restaurants successfully. Although the Company has established criteria to
evaluate prospective franchisees, there can be no assurance that the Company's
existing or future franchisees will have the business abilities or access to
financial resources necessary to open Tony Roma's restaurants or that they will
successfully develop or operate these restaurants in their franchise areas in a
manner consistent with the Company's standards.
Financial difficulties of franchisees may also from time to time require
the Company to stop accruing franchise fees, to establish reserves with respect
to amounts due, or both. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
While the Company intends to continue its efforts to franchise restaurants,
there can be no assurance that the Company will be able to attract qualified
franchisees or that such franchisees will be able to open and operate Tony
Roma's restaurants successfully. See "Business -- Franchise Operations."
Reliance on Trademarks and Other Intellectual Property
Management believes the Company's United States and foreign trademarks have
significant value and are important in the marketing of its restaurants.
The Company's ability to compete effectively depends, to a significant
extent, on its ability to maintain the proprietary nature of its owned and
licensed intellectual property. Although the Company's trademarks are currently
registered with the United States Patent and Trademark Office and are registered
in certain foreign countries, there can be no assurance that the Company's
trademarks cannot be circumvented, do not or will not violate the proprietary
rights of others or that the Company would not be prevented from using its
trademarks if challenged. The Company's trademarks have in the past been
circumvented in certain foreign markets. If the Company were unable to maintain
the proprietary nature of its intellectual property, such loss could have a
material adverse effect on the business, financial condition and results of
operations of the Issuers. See "Business -- Trademarks and Other Intellectual
Property."
17
<PAGE> 22
Geographic Concentration
The Company's restaurants are concentrated in Florida, Texas and
California. As a result, a severe or prolonged economic recession or changes in
demographic mix, employment levels, population density, weather, real estate
market conditions or other factors unique to these geographic regions may
adversely affect the Company more than certain of its competitors which are more
geographically diverse.
International Franchise Operations
The Company intends to selectively evaluate international franchise
expansion opportunities. The Company receives franchise royalty fees from
international franchisees as a percentage of each restaurant's gross sales.
Therefore, the Company may be affected by economic and political conditions in
each of the foreign countries in which its franchisees operate and certain other
risks of doing business abroad, including fluctuations in the value of
currencies, possible restrictions on the transfer of funds, greater difficulty
in collecting franchise royalty fees, and the burdens, cost and risk of
compliance with a variety of foreign laws. Changes in policies by the United
States or foreign governments could result in, for example, currency conversion
limitations which could have a material adverse effect on the business,
financial condition and results of operations of the Company. See
"Business -- Franchise Operations."
Year 2000 Issue
In order to address the widely-known dating system flaw inherent in most
operating systems (the "Year 2000 Issue"), NPC has developed a plan to modify
its systems, which are used by the Company, and has begun implementation of this
plan. The Company is in the process of developing a plan and/or cost estimates
that consider the Company on a stand-alone basis. NPC is evaluating the extent
to which its computer operating systems will be disrupted upon the turn of the
century as a result of the Year 2000 Issue. NPC presently believes that by
modifying existing software and converting new software, the Year 2000 Issue
will not pose significant operational problems for its information systems.
However, if such modifications and conversions are not timely or are not
properly implemented, the Year 2000 Issue could have a material adverse effect
on the business, financial condition and results of operations of the Company.
Concentration of Ownership
The Sentinel Investors beneficially own in the aggregate approximately 80%
of the outstanding capital stock of Holdings. The interests of the Sentinel
Investors may, in certain circumstances, differ from the interests of holders of
the Exchange Notes. See "Management" and "Security Ownership."
18
<PAGE> 23
THE COMPANY
The Company is the operator and franchisor of the largest national casual
dining chain specializing in ribs, as described under "Business." The first Tony
Roma's restaurant, called Tony Roma's Place, was opened by Tony Roma in North
Miami, Florida on January 20, 1972. The restaurant featured a casual decor and
comfortable ambiance, and baby-back ribs emerged as the house specialty. Tony
Roma's Place became one of Miami's most popular and successful restaurants and
firmly established its niche in the marketplace.
In 1976, Clint Murchison Jr., a Texas financier and owner of the Dallas
Cowboys, purchased the majority of the U.S. franchise rights from Tony Roma and
established Roma Corporation, a company jointly owned with Tony Roma, to fund
aggressive, strategic expansion.
Tony Roma opened his second restaurant in Broward County, Florida, in 1976
and by December 1976, a West Coast presence was established with the development
of a Beverly Hills location. During the next five years, additional Tony Roma's
restaurants were opened in Florida and California, and the concept was expanded
with restaurant locations in Hawaii, Nevada, New York, Tennessee, Texas and
Japan. The Company began to offer franchises for Tony Roma's restaurants in May
1979, and the first franchised restaurant opened in August 1980.
In 1983 Tony Roma relinquished his rights to restaurant operations to the
Company. The following year, Clint Murchison Jr. sold his interest in the
Company to his four adult children. Ken Reimer took over as President of Roma
Corporation in December 1983, relocated the corporate headquarters to Dallas,
Texas, assembled a professional management team, and established a strategic
growth plan.
In December 1991, Romacorp, Inc., successor by merger to Roma Corporation,
was created as a part of an overall reorganization of the Roma companies.
In June 1993, all the outstanding stock of NRH Corporation, then the
ultimate parent of Romacorp, was acquired by NPC International, Inc., a Kansas
corporation, headquartered in Pittsburgh, Kansas (NASDAQ: NPCI). NPC is the
largest franchisee of Pizza Hut, Inc., operating 680 Pizza Hut restaurants in 26
states as of March 31, 1998.
Following the acquisition, a new management team was installed led by the
Company's President, Robert B. Page. Since the acquisition, management has
focused on strategically repositioning the Tony Roma's concept by: (i) improving
operations; (ii) upgrading menu quality and selection; (iii) updating building
design and decor; (iv) broadening its customer base; and (v) rationalizing its
franchise base.
On April 24, 1998, NPC Holdings, NPC, Sentinel and Holdings entered into
the Recapitalization Agreement. Pursuant to the Recapitalization, Holdings
exchanged a portion of Holdings' Old Common Stock held by NPC Holdings for
consideration consisting of a series of Preferred Stock and common stock
representing approximately 20% of the voting equity securities on a fully
diluted basis before issuance of options to management. The remaining shares of
Old Common Stock held by NPC Holdings were redeemed for cash. In addition, the
Sentinel Investors purchased shares of Holdings' common stock and Preferred
Stock representing approximately 80% of Holdings' fully-diluted Common Stock
before issuance of options to management. Following the Recapitalization, the
Sentinel Investors and NPC Holdings own securities representing approximately
80% and 20%, respectively, of the voting power of Holdings' outstanding capital
stock before issuance of options to management.
19
<PAGE> 24
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Issuers'
obligations under the Registration Rights Agreement. The Issuers will not
receive any cash proceeds from the issuance of the Exchange Notes in the
Exchange Offer. The following table sets forth estimated sources and uses of
funds to consummate the Recapitalization.
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
SOURCES OF FUNDS
Notes....................................................... $ 75,000
New Revolving Credit Facility............................... 5,000
Equity Contribution and Retained Equity(1).................. 33,750
--------
Total sources of funds................................. $113,750
========
USES OF FUNDS
Recapitalization consideration(2)........................... $101,000
Equity interest retained by NPC Holdings.................... 6,750
Repayment of existing indebtedness.......................... 1,333
Estimated fees and expenses................................. 4,667
--------
Total uses of funds.................................... $113,750
========
</TABLE>
- ---------------
(1) Includes a $27.0 million equity investment made by the Sentinel Investors
and a $6.8 million retained equity interest of NPC Holdings.
(2) The Recapitalization consideration was subject to certain post-closing
adjustments based on the Company's working capital at closing and
performance-based payments with respect to certain Company-owned and
franchised restaurants.
20
<PAGE> 25
CAPITALIZATION
The following table sets forth the historical capitalization of the Company
as of June 28, 1998 and the pro forma capitalization of the Company to give
effect to the Transactions as if they had occurred on June 28, 1998. This table
should be read in conjunction with the "Selected Historical Financial Data" and
the historical consolidated financial statements of the Company and notes
related thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JUNE 28, 1998
----------------------
ACTUAL PRO FORMA
-------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Debt (including current maturities):
Existing debt and payables to affiliate(1)................ $35,220 $ --
New Revolving Credit Facility(2).......................... -- 5,000
12% Senior Notes due 2006................................. -- 75,000
------- --------
Total debt and payables to affiliate(1)........... 35,220 80,000
Shareholders' equity (deficit):............................. 32,738 (8,320)(3)
------- --------
Total capitalization.............................. $67,958 $ 71,680
======= ========
</TABLE>
- ---------------
(1) Payables to affiliate of $33.9 million contributed to paid-in capital
effective at closing.
(2) In connection with the Recapitalization, the Company entered into a $15
million revolving credit facility. See "Prospectus Summary -- The
Recapitalization" and "Description of New Revolving Credit Facility."
(3) Shareholders' deficit reflects: (i) the net recapitalization consideration
representing redemption of stock of $74.0 million; (ii) payables to
affiliate of $33.9 million contributed to paid in capital; and (iii) certain
transaction costs, net of tax benefit, of $0.9 million.
21
<PAGE> 26
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth selected historical financial data of the
Company for the fiscal years ended March 29, 1994, March 28, 1995, March 24,
1996, March 23, 1997 and March 29, 1998. The selected historical income
statement data for fiscal 1994 and balance sheet data for fiscal 1994 and 1995
were derived from unaudited financial statements of the Company. Although the
data for fiscal 1994 includes 52 weeks of activity, the Company was only owned,
operated, and accounted for by NPC International, Inc., its Parent, for the last
42 weeks of the 52-week period. The selected historical income statement data
for fiscal 1995, 1996, 1997 and 1998 were derived from the audited consolidated
financial statements of the Company which for fiscal 1996, 1997 and 1998 are
included elsewhere in this Prospectus, together with the report thereon of Ernst
& Young LLP, independent auditors. The selected historical financial data of the
Company for the thirteen weeks ended June 22, 1997 and June 28, 1998 has been
derived from, and is qualified by reference to, the unaudited financial
statements of Romacorp, Inc. included elsewhere herein. The unaudited
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and, in the opinion of management,
include all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the information included therein. Operating results
for the thirteen weeks ended June 28, 1998 are not necessarily indicative of the
results that may be expected for the entire year ended March 28, 1999. The
following table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the historical
consolidated financial statements and the notes related thereto of the Company
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THIRTEEN WEEKS
ENDED
FISCAL YEAR --------------------
--------------------------------------------------- JUNE 22, JUNE 28,
1994 1995 1996 1997 1998 1997 1998
------- ------- ------- ------- ------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Net restaurant sales...... $41,676 $42,137 $51,499 $68,778 $86,408 $20,225 $22,513
Net franchise revenues.... 6,594 7,291 7,570 8,526 8,482 2,050 2,114
------- ------- ------- ------- ------- ------- -------
Total revenues....... 48,270 49,428 59,069 77,304 94,890 22,275 24,627
Depreciation and
amortization.............. 3,374 3,829 3,993 5,425 7,197 1,755 1,677
Operating income(1)......... 817 3,259 5,529 7,001 8,883 2,078 2,694
Net interest expense........ 454 335 876 1,550 2,412 476 663
Income taxes................ 124 1,203 545 2,017 2,315 568 779
Net income.................. $ 370 $ 1,691 $ 351 $ 3,476 $ 4,165 $ 1,055 $ 1,446
OTHER FINANCIAL DATA:
EBITDA(2)................... $ 4,322 $ 7,058 $ 9,265 $12,468 $16,089 3,854 4,565
EBITDA Margin(2)(3)......... 8.9% 14.3% 15.7% 16.1% 17.0% 17.3% 18.5%
Capital expenditures:
Maintenance............... $ 210 $ 328 $ 345 $ 246 $ 478 $ 46 $ 84
Renovation................ 588 141 324 438 653 7 23
New restaurant
development............. 59 5,090 14,190 23,151 9,479 4,328 1,805
------- ------- ------- ------- ------- ------- -------
Total capital
expenditures....... $ 857 $ 5,559 $14,859 $23,835 $10,610 $ 4,381 $ 1,912
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to total
fixed charges(4).......... 1.4x 3.4x 1.5x 2.9x 2.7x 3.2x
BALANCE SHEET DATA:
Facilities and equipment,
net....................... $11,163 $15,659 $25,755 $46,516 $52,600 $53,294
Total assets................ 36,417 36,196 50,104 68,724 74,747 75,776
Total long-term debt and
payables to
affiliate(5).............. 8,714 7,086 19,574 34,611 35,717 35,220
Shareholder's equity........ 21,609 23,301 23,651 27,127 31,292 32,738
</TABLE>
- ---------------
(1) Before impairment and loss provision of $3,500 for fiscal 1996. Including
impairment and loss provision of $3,500, operating income would have been
$2,029 for fiscal 1996.
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<PAGE> 27
(2) As used herein, "EBITDA" represents net income plus: (i) net interest; (ii)
income taxes; (iii) depreciation and amortization, (iv) provision for
disposition of assets; and (v) asset write-downs under Statement of
Financial Accounting Standards No. 121. The Company has included information
concerning EBITDA in this Prospectus because it believes that such
information is used by certain investors as one measure of an issuer's
historical ability to service debt. EBITDA is not a measure determined in
accordance with GAAP and should not be considered as an alternative to, or
more meaningful than, earnings from operations or other traditional
indications of an issuer's operating performance.
(3) EBITDA margin represents EBITDA divided by total revenues.
(4) For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges. Fixed charges consist of interest expense
on all indebtedness and the estimated interest portion of rental expense.
Absent the $3.5 million charge during fiscal 1996, the ratio of earnings to
total fixed charges would have been 3.3x.
(5) Includes current portion of long-term debt.
23
<PAGE> 28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
See "Prospectus Summary -- The Recapitalization," "Capitalization,"
"Selected Historical Financial Data," "Description of New Revolving Credit
Facility" and the historical consolidated financial statements and notes related
thereto included elsewhere in this Prospectus.
FORWARD LOOKING COMMENTS
The statements under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and other statements which are not
historical facts contained herein are forward looking statements that involve
estimates, risks and uncertainties, including but not limited to: consumer
demand and market acceptance risk; the level of and the effectiveness of
marketing campaigns by the Company, training and retention of skilled management
and other restaurant personnel; the Company's ability to locate and secure
acceptable restaurant sites; the effect of economic conditions, including
interest rate fluctuations, the impact of competing restaurants and concepts,
new product introductions, product mix and pricing, the cost of commodities and
other food products, labor shortages and costs and other risks detailed in this
Registration Statement.
OVERVIEW
Romacorp is the operator and franchisor of the largest national casual
dining chain specializing in ribs with 194 restaurants located in 25 states in
the United States and in over 15 foreign countries. Founded in Miami in 1972,
the Company's restaurants are primarily located in Florida, Texas and
California. Both the Tony Roma's name and its "Famous for Ribs" and "Tony Roma's
A Place for Ribs" slogans are well-recognized throughout the United States. The
restaurants offer a full and varied menu, including ribs, chicken, steaks,
seafood, salads and other menu items in a casual atmosphere which is suitable
for the entire family. Since the inception of Tony Roma's, its baby-back ribs
have won numerous consumer and industry awards in over 25 markets. In addition
to its award-winning ribs, the menu features its signature deep fried onion ring
loaf. The Tony Roma's concept is designed to serve a demographically and
geographically diverse customer base, with high quality food at moderate prices.
The Company's revenues are generated from two primary sources:
Company-owned restaurant sales (food and beverage sales) and franchise income
consisting of franchise restaurant royalties (generally 4% of each domestic
franchise restaurant monthly gross sales and 3% of each international franchise
restaurant's gross sales) and franchise fees (which are typically $50,000 per
domestic restaurant opened and $30,000 per international restaurant opened).
As of March 29, 1998, the Company operated 45 Company-owned and two
joint-venture restaurants in 11 states and through its subsidiaries, franchised
94 restaurants in 19 states and 53 restaurants in international locations. For
fiscal 1998, system-wide sales, Company revenues (including net franchise
revenues) and Company EBITDA were $350.8 million, $94.9 million and $16.1
million, respectively. Company-owned restaurants have generated positive
comparable restaurant sales growth in 13 of the last 14 quarters. The Company
intends to continue to focus on increasing the number of Company-owned
restaurants as well as the number of franchised restaurants, which provide
higher margins than Company-owned restaurants without any required capital
investment by the Company.
From fiscal 1995 to fiscal 1998, the average annual revenue per
Company-owned restaurant increased from approximately $1.8 million to $2.0
million and the number of Company-owned restaurants increased from 23 to 45.
Over the same period, average annual royalties per franchised restaurant, net of
reserve for doubtful accounts, increased from approximately $54,900 to $61,600
and the net number of franchised restaurants increased from 143 to 147.
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<PAGE> 29
RESULTS OF OPERATIONS
The following table sets forth the Company's historical consolidated
revenues for fiscal 1996, 1997, 1998 and the thirteen weeks ended June 22, 1997
and June 28, 1998:
<TABLE>
<CAPTION>
FISCAL YEAR THIRTEEN WEEKS ENDED
----------------------- ------------------------------
1996 1997 1998 JUNE 22, 1997 JUNE 28, 1998
----- ----- ----- ------------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Revenues
Net restaurant sales... $51.5 $68.8 $86.4 $20.2 $22.5
Net franchise
revenues............ 7.6 8.5 8.5 2.1 2.1
----- ----- ----- ----- -----
Total
revenues..... $59.1 $77.3 $94.9 $22.3 $24.6
===== ===== ===== ===== =====
</TABLE>
The following table sets forth certain consolidated historical financial
data for the Company expressed as a percentage of net restaurant sales for
fiscal 1996, 1997, 1998 and the thirteen weeks ended June 22, 1997 and June 28,
1998:
<TABLE>
<CAPTION>
FISCAL YEAR THIRTEEN WEEKS ENDED
----------------------- ------------------------------
1996 1997 1998 JUNE 22, 1997 JUNE 28, 1998
----- ----- ----- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net restaurant sales..................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............................ 34.1% 33.3% 33.6% 32.6% 34.8%
Direct labor............................. 30.6% 31.2% 30.9% 31.5% 30.2%
Other(1)................................. 25.9% 24.2% 24.3% 24.2% 23.4%
----- ----- ----- ----- -----
Total operating expenses................. 90.6% 88.7% 88.8% 88.3% 88.4%
----- ----- ----- ----- -----
Income from Company-owned restaurant
operations............................. 9.4% 11.3% 11.2% 11.7% 11.6%
===== ===== ===== ===== =====
</TABLE>
- ---------------
(1) Other operating expenses include rent, depreciation and amortization,
advertising, utilities, supplies, and insurance among other costs directly
associated with operation of restaurant facilities.
THIRTEEN WEEKS ENDED JUNE 28, 1998 COMPARED TO THIRTEEN WEEKS ENDED JUNE 22,
1997
Net restaurant sales. Net restaurant sales for the thirteen weeks ended
June 28, 1998 increased $2.3 million, or 11.3% to $22.5 million from $20.2
million for the thirteen weeks ended June 22, 1997. This increase was primarily
due to an increase in the number of restaurants from 43 as of June 22, 1997 to
49 as of June 28, 1998 and 2.9% comparable sales growth for restaurants open for
more than 18 months. In addition, a new menu was introduced in the latter part
of the third quarter of fiscal 1998 which repositioned baby-back ribs as the
premier rib offering, introduced new menu items, increased portion sizes and
increased prices on selected items. This strategy resulted in an approximate 2%
weighted average price increase to offset the increased product cost associated
with the new and higher quality items as well as increased baby-back rib costs.
Net franchise revenues. Net franchise revenues for the thirteen weeks
ended June 28, 1998 increased 3.1% to $2.1 million due to a decrease in the
provision for bad debts, partly offset by a decrease in franchise fees. There
was one store opening during such period versus three openings a year ago.
Cost of sales. Cost of sales as a percentage of net restaurant sales
increased to 34.8% for the thirteen weeks ended June 28, 1998 from 32.6% for the
thirteen weeks ended June 22, 1997 primarily due to an increase in the average
price of baby-back ribs of 15% for the thirteen weeks ended June 28, 1998.
Direct labor. Direct labor as a percentage of net restaurant sales
decreased to 30.2% for the thirteen weeks ended June 28, 1998 from 31.5% for the
thirteen weeks ended June 22, 1997 due largely to leverage obtained from
increases in comparable sales volumes. This decrease was also a result of the
opening of one new store during the period versus three new store openings a
year ago. Unusually high labor costs are incurred with store openings due to
increased training and staffing levels to ensure the customer's initial
experience is favorable. In addition, workers compensation insurance decreased.
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<PAGE> 30
Other. Operating expenses decreased as a percentage of sales from 24.2%
for the thirteen weeks ended June 22, 1997 to 23.5% for the thirteen weeks ended
June 28, 1998 due to a revised estimate of real estate taxes and increased
leverage obtained from increases in comparable sales.
General and administrative expenses. General and administrative expenses
decreased $0.3 million to $2.0 million for the thirteen weeks ended June 28,
1998 primarily due to lower amortization of pre-opening costs, which occurs over
the twelve month period following a restaurant opening.
Interest expense. Interest expense increased due to decreased capitalized
interest expense which resulted from fewer restaurants under construction in the
current year.
Miscellaneous. Miscellaneous income for the thirteen weeks ended June 28,
1998 includes $169,000 for business interruption insurance for a restaurant
destroyed by fire.
Tax Provision. Income taxes for the thirteen weeks ended June 28, 1998
were consistent with the thirteen weeks ended June 22, 1997 at 35% of pretax
income.
FISCAL 1998 COMPARED TO FISCAL 1997
Net restaurant sales. Net restaurant sales for fiscal 1998 increased $17.6
million, or 25.6%, to $86.4 million from $68.8 million in fiscal 1997. This
increase was due largely to the addition of five restaurants in fiscal 1998, 13
restaurants in fiscal 1997, and 0.9% comparable sales growth for restaurants
open for more than 18 months. In addition, as discussed above, a new menu was
introduced resulting in an approximate 2% weighted average price increase.
Net franchise revenues. Net franchise revenues for fiscal 1998 decreased
slightly primarily due to lower revenues from sales of international franchise
rights in fiscal 1998 than in fiscal 1997. This decrease was partially offset by
an increase in royalty revenue of 7% due to growth of the franchise system.
Cost of sales. Cost of sales as a percentage of net restaurant sales
increased to 33.6% for fiscal 1998 from 33.3% for fiscal 1997 due to an increase
in the average price of baby-back ribs of 17% for the year. This increase was
partially offset by menu enhancements implemented in fiscal 1998 and fiscal 1997
which caused favorable sales mix changes and included price increases on select
items.
Direct labor. Direct labor as a percentage of net restaurant sales
decreased to 30.9% for fiscal 1998 from 31.2% for fiscal 1997. This decrease was
primarily due to fewer new restaurant openings with six restaurants opened in
fiscal 1998 compared to 14 restaurants in fiscal 1997. The higher labor costs in
fiscal 1997 were due to training and increased staffing levels which typically
accompany restaurant openings to ensure a favorable dining experience for first
visit customers. This decrease was partially offset by the increase in the
federal minimum wage in September 1997.
Other. Other operating expenses for fiscal 1998 were relatively flat as a
percentage of restaurant sales compared to fiscal 1997.
General and administrative expenses. General and administrative expenses
were relatively flat at approximately $9.3 million in both fiscal 1998 and 1997.
General and administrative expenses as a percentage of total revenues decreased
to 9.8% in fiscal 1998 from 12% in fiscal 1997, reflecting the leverage from
year-to-year revenue growth. General and administrative expenses include the
amortization of goodwill and pre-opening costs. These costs increased over
fiscal 1997 due to the amortization of pre-opening costs, which occurs over the
twelve months following a restaurant opening.
Interest expense. Interest expense grew consistently during fiscal 1998 as
restaurant growth and development was financed through the Company's borrowings
from NPC.
Tax provision. The Company's tax provision for fiscal 1998 resulted in an
effective tax rate of 35.7% compared to 36.7% for fiscal 1997. See Note 5 of the
Notes to Consolidated Financial Statements for a discussion of the differences
which cause the effective tax rate to vary from the statutory federal income tax
rate of 35%.
26
<PAGE> 31
FISCAL 1997 COMPARED TO FISCAL 1996
Net restaurant sales. Net restaurant sales for fiscal 1997 increased $17.3
million, or 33.6%, to $68.8 million from $51.5 million in fiscal 1996. This
increase was due largely to the addition of 13 restaurants in fiscal 1997, six
restaurants in fiscal 1996, and 2.2% comparable restaurant sales growth for
restaurants open for more than 18 months. These increases were partially offset
by the closing of six restaurants throughout fiscal 1997 and one restaurant
during the last week of fiscal 1996. This closure strategy was implemented in
the fourth quarter of fiscal 1996 and targeted low volume stores with poor
economic performance. In addition, in order to mitigate the impact of an
increase in the federal minimum wage in October 1996, a weighted average price
increase of approximately 2% was implemented in the third quarter of fiscal
1997.
Net franchise revenues. Net franchises revenue for fiscal 1997 increased
$1.0 million, or 12.6%, to $8.5 million from $7.6 million in fiscal 1996. This
increase was primarily due to higher revenues from sales of international
franchise rights in fiscal 1997 than in fiscal 1996. In addition, 12 franchise
restaurants were developed in fiscal 1996 while 13 were closed or sold, as the
Company aggressively rationalized nonperforming franchisees from the franchise
system.
Cost of sales. Cost of sales as a percentage of net restaurant sales
decreased to 33.3% from 34.1% in fiscal 1996, despite an increase in the average
price of baby-back ribs of 8% for the year, due to menu enhancements which
caused favorable changes in sales mix and price increases on select items during
fiscal 1996 and fiscal 1997.
Direct labor. Direct labor as a percentage of net restaurant sales
increased to 31.2% for fiscal 1997 from 30.6% for fiscal 1996 primarily due to
added expenses associated with the opening of 14 restaurants during the year.
These incremental labor costs are due to training expenses and increased
staffing levels which typically accompany restaurant openings to ensure a
favorable dining experience for first visit customers. The federal minimum wage
increase, effective in October 1996, also impacted the labor percentage, but was
partially offset by price increases.
Other. Other operating expenses as a percentage of net restaurant sales
for fiscal 1997 decreased from 25.9% for fiscal 1996 to 24.2% for fiscal 1997
largely due to the opening of higher volume prototype facilities and the closure
of seven older, underperforming restaurants during fiscal 1997.
General and administrative expenses. General and administrative expense
for fiscal 1997 increased $2.4 million, or 34.3%, to $9.3 million from $6.9
million in fiscal 1996. This increase was largely due to employee related
expenses as the management infrastructure was being developed to support the
Company's growth initiative that began in fiscal 1996. Training and travel cost
also increased due to store openings, and professional fees increased modestly
over the prior year. In addition, amortization of pre-opening expenses also
increased due to the acceleration of new restaurant development.
Impairment and loss provision for underperforming assets. The Company
recorded a pre-tax provision of $3.5 million in fiscal 1996 related to the
disposition of six underperforming Tony Roma's restaurants and the relocation of
two others.
Interest expense. Interest expense grew consistently during fiscal 1997 as
restaurant growth and development was financed through the Company's borrowings
from NPC.
Tax provision. The Company's tax provision for fiscal 1997 resulted in an
effective tax rate of 36.7% compared to 60.8% for fiscal 1996. See Note 5 of the
Notes to Consolidated Financial Statements for a discussion of the differences
which cause the effective tax rate to vary from the statutory federal income tax
rate of 35%.
27
<PAGE> 32
LIQUIDITY AND CAPITAL RESOURCES
Post-Transactions
The Company's principal sources of liquidity are cash flow generated from
operations and borrowings under the New Revolving Credit Facility. The Company's
principal uses of liquidity will be to meet debt service requirements, finance
the Company's capital expenditures and provide working capital. The Company
expects that capital expenditures in fiscal 1999 will not exceed $10.0 million.
The Company incurred substantial indebtedness in connection with the
Transactions. The Company has approximately $80.0 million of indebtedness
outstanding. The Company's debt service obligations could have important
consequences to holders of the Exchange Notes. See "Risk Factors -- Risk Factors
Associated with Financial Leverage and the Exchange Notes -- High Level of
Indebtedness; Ability to Service Indebtedness."
Historical
Historically, the Company's principal sources of funds have been operations
and borrowings under a credit facility with NPC. The Company's principal uses of
funds have been capital expenditures and payments on a note payable related to
the acquisition of a franchisee's restaurants.
Cash provided by operating activities has consistently increased largely
due to leverage gained from the growth in restaurant count and improved
operating results. Cash was used for normal maintenance capital expenditures and
to fund the development of six, fourteen, six, five and two restaurants in
fiscal 1996, 1997, 1998 and the thirteen weeks ended June 22, 1997 and June 28,
1998, respectively. Capital expenditures were made under approval of NPC. Cash
was used to purchase restaurants from franchisees in fiscal 1996.
Capital Expenditures
The Company's capital expenditures in fiscal 1996, 1997, 1998 and the
thirteen weeks ended June 22, 1997 and June 28, 1998 were approximately $14.9
million, $23.8 million, $10.6 million, $4.4 million and $1.9 million,
respectively. Such expenditures were used primarily to fund the maintenance,
renovation and new development of Company-owned restaurants.
SEASONALITY
Tony Roma's sales are traditionally higher from January to March due to an
increase in vacation and part-time residence activity in warm weather climates
and resort locations where a significant number of the Company's restaurants are
located.
RIB PRICING
Baby-back ribs represent approximately 25% of the Company's cost of sales.
Because ribs are a by-product of pork processing, their price is influenced
largely by the demand for boneless pork. Historically, the cost of baby-back
ribs has been volatile. Significant changes in the prices of ribs could
significantly increase the Company's cost of sales and adversely effect the
business, results of operations and financial condition of the Company.
EFFECTS OF INFLATION
Inflationary factors such as increases in food and labor costs directly
affect the Company's operations. Because many of the Company's restaurant
employees are paid on an hourly basis, changes in rates related to federal and
state minimum wage and tip credit laws will effect the Company's labor costs.
The Company cannot always effect immediate price increases to offset higher
costs and no assurance can be given that the Company will be able to do so in
the future.
28
<PAGE> 33
YEAR 2000 ISSUE
In order to address the Year 2000 Issue, NPC has developed a plan to modify
its systems, which are used by the Company, and has begun implementation of this
plan. The management of NPC has not developed a plan and/or cost estimates that
consider the Company on a stand-alone basis. NPC is evaluating the extent to
which its computer operating systems will be disrupted upon the turn of the
century as a result of the Year 2000 Issue. NPC presently believes that by
modifying existing software and converting new software, the Year 2000 Issue
will not pose significant operational problems for the its information systems.
However, if such modifications and conversions are not timely or are not
properly implemented, the Year 2000 Issue could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Risk Factors -- Year 2000 Issue."
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In April 1998, Statement of Position ("SOP") 98-5 Accounting for Costs of
Start-up Activities was issued. The SOP requires the Company to expense
pre-opening costs as incurred and to report the initial adoption as a cumulative
effect of a change in accounting principles as described in APB No. 20,
Accounting Changes, during the first quarter of its fiscal year 2000. The
cumulative effect upon adoption will result in a one-time charge to income in an
amount equal to the net book value of the Company's pre-opening costs. This
change will also result in the discontinuation of amortization of pre-opening
cost expense in subsequent periods. At March 29, 1998, the balance of
pre-opening costs was $466,000.
29
<PAGE> 34
BUSINESS
Romacorp is the operator and franchisor of the largest national casual
dining chain specializing in ribs with 194 restaurants located in 25 states in
the United States and in over 15 foreign countries. Founded in Miami in 1972,
the Company's restaurants are primarily located in Florida, Texas and
California. Both the Tony Roma's name and its "Famous for Ribs" and "Tony Roma's
A Place for Ribs" slogans are well-recognized throughout the United States. The
restaurants offer a full and varied menu, including ribs, chicken, steaks,
seafood, salads and other menu items in a casual atmosphere which is suitable
for the entire family. Since the inception of Tony Roma's, its baby-back ribs
have won numerous consumer and industry awards in over 25 markets. In addition
to its award-winning ribs, the menu features its signature deep fried onion ring
loaf.
The Tony Roma's concept is designed to serve a demographically and
geographically diverse customer base, with high quality food at moderate prices.
Tony Roma's restaurants are generally located in free-standing buildings with
approximately 200 seats and separate bar areas. The restaurants have a fun,
comfortable atmosphere with distinctive and varied decor and provide consumers
with high quality, friendly service. The Tony Roma's concept is appropriate for
a wide variety of casual dining occasions including family dinners and business
lunches.
As of March 29, 1998, the Company operated 45 Company-owned and two
joint-venture restaurants in 11 states and through its subsidiaries, franchised
94 restaurants in 19 states and 53 restaurants in international locations. For
fiscal 1998, system-wide sales, Company revenues (including net franchise
revenues) and Company EBITDA were $350.8 million, $94.9 million and $16.1
million, respectively. Company-owned restaurants have generated positive
comparable restaurant sales growth in 13 of the last 14 quarters. The Company
intends to continue to focus on increasing the number of Company-owned
restaurants as well as the number of franchised restaurants.
From fiscal 1995 to fiscal 1998, the average annual revenue per
Company-owned restaurant increased from approximately $1.8 million to $2.0
million, and the number of Company-owned restaurants increased from 23 to 45.
Over the same period, average annual royalties per franchised restaurant net of
reserve for doubtful accounts, increased from approximately $54,900 to $61,600,
and the net number of franchised restaurants increased from 143 to 147.
With efforts beginning in fiscal 1995, the Company's current management,
led by its President, Robert B. Page, has continued to strategically reposition
the Tony Roma's concept by: (i) improving operations; (ii) upgrading menu
quality and selection; (iii) updating building designs and decor; (iv)
broadening its customer base; and (v) rationalizing its franchise base. As part
of such initiative, over 70% of Company-owned restaurants were either built or
significantly renovated within the last three years to meet consumer
preferences. In addition, management has improved the support provided to its
franchisees, eliminated certain underperforming franchisees and strengthened its
franchise base. The Company believes as a result of such efforts, the Company's
revenues and EBITDA grew at a compound annual growth rate of 24% and 31%,
respectively, from fiscal 1995 to fiscal 1998.
COMPETITIVE STRENGTHS
Leader in Rib Category. Tony Roma's is the largest national casual dining
restaurant chain specializing in ribs in the United States. Since its inception,
Tony Roma's has won numerous consumer and industry awards for its rib recipe,
including first place in the National Rib Cook-Off and "best ribs" awards in
over 25 markets. Although several of its national competitors offer ribs as a
menu selection, the Company believes that Tony Roma's well-established and
recognized brand name makes it the leader in the rib category with a reputation
for high quality food.
Established, Internationally Recognized Restaurant Brand. With 141 U.S.
and 53 international restaurants, Tony Roma's is a well-established and
recognized brand in the United States and abroad. Operating under the slogans,
"Famous for Ribs" and "A Place for Ribs", the Company believes that the majority
of consumers in the United States identify the Tony Roma's brand with ribs. The
Company has achieved strong
30
<PAGE> 35
consumer awareness levels without substantial television advertising. Its
marketing programs primarily rely on radio, outdoor, newspaper, direct mail,
yellow pages and word of mouth advertising. The Company believes that its strong
brand identity enhances its competitive position compared to other casual dining
chains.
Strong Franchise Network. The Company has 47 franchisees, most of which
own and operate two or more restaurants and the largest of which operates 24
restaurants. The Company's franchisees operate 147 restaurants in 19 states and
over 15 foreign countries (including ten restaurants in Canada and 26
restaurants in the Asia Pacific region). In addition to providing the Company
with substantial royalty revenues ($9.1 million for fiscal 1998), the franchise
network allows the Company to expand the Tony Roma's system without substantial
capital investment by the Company. From fiscal 1995 to fiscal 1998, 51 new
franchise restaurants were opened and 37 franchise restaurants, most of which
were not performing their obligations under their franchise agreements, were
closed. The Company anticipates that franchisees will open approximately 45
additional restaurants by 2001.
Broadly Appealing, High Quality Menu. The Company's restaurants offer
customers a full and varied menu, including ribs, chicken, steaks, seafood,
salads and other menu items. The items are moderately priced with entrees
typically ranging in price from $3.99 to $11.99 for lunch and $4.99 to $16.49
for dinner. Dessert selections range in price from $1.99 to $3.99. The Company
believes that the combination of its diverse and full menu selection and casual
dining ambiance appeals to a wide geographic and demographic mix of customers.
Management believes that Tony Roma's has significant expansion potential in all
50 United States as well as in most regions of the world.
Updated, Modern Restaurant Base. In fiscal 1995, the Company introduced a
new prototype which is designed to attract a broader segment of consumers. The
prototype features new lighting and light color decor packages which the Company
believes enhance the appeal of its restaurants for family dining, business
lunches and other casual dining occasions. Within the last three years, over 70%
of the Company-owned restaurants were either built or significantly renovated to
conform to the new prototype. The Company continually seeks to maintain unique
interior and exterior facility design and decor to meet consumer preferences. In
addition, the Company encourages, and if necessary can require, its franchisees
to remodel their restaurants.
Experienced and Proven Management Team. The Company's senior management
team has an average of 20 years of experience in the restaurant industry, four
of which are with Tony Roma's. Since fiscal 1995, the current management team,
led by Robert Page, has focused on repositioning the Tony Roma's concept by
implementing initiatives to improve operations and broaden consumer appeal.
GROWTH STRATEGY
The Company intends to continue the programs and initiatives that it has
put in place over the last three years to support and increase the revenues and
operating performance of its existing Company-owned and franchised restaurants.
In addition, the Company plans to achieve growth by developing new Company-owned
restaurants and increasing franchise revenues.
Develop New Company-Owned Restaurants. Management has demonstrated its
ability to open and operate new restaurants, expanding the number of
Company-owned restaurants to 45 at the end of fiscal 1998 from 23 in fiscal
1995. The Company believes that the development of successful Company-owned
restaurants strengthens the Tony Roma's concept and the Company's growth
potential. The Company intends to develop and operate new restaurants and plans
to open six to eight additional Company-owned restaurants in fiscal 1999. To
finance the development of new Company-owned restaurants, the Company expects to
selectively use operating lease financing facilities thereby reducing the
average capital expenditure required per restaurant.
Increase Franchise Revenues. The Company plans to continue to strengthen
its franchise base by adding franchised restaurants in existing and new
geographic areas, both domestically and internationally. In expanding the number
of franchised restaurants, the Company focuses on its existing franchisees which
it anticipates will open the majority of the Company's franchise restaurants in
the foreseeable future. In addition, the Company targets new franchisees that
are experienced multi-unit restaurant operators with
31
<PAGE> 36
significant financial resources. Management continually re-evaluates and
upgrades the support that it provides to franchisees. The Company believes that
existing franchisees have significant restaurant operating experience and
adequate access to capital to support the Company's growth strategy.
CONCEPT
The Tony Roma's concept is designed to offer a high quality, full and
varied menu at moderate prices in a casual but attractive dining atmosphere to a
demographically and geographically diverse customer base. Tony Roma's appeals to
a broad segment of the population and provides a casual dining experience that
features the concept's internationally renowned and award-winning baby-back ribs
and its signature deep fried onion ring loaf.
Menu. Each of the Company's restaurants offers a full and varied menu of
high quality, moderately priced food and beverage items, including ribs, steaks,
seafood, chicken, salads and other menu items. Each restaurant offers customers
certain core menu items, providing consistency among restaurants and support of
the Tony Roma's concept. Additional approved menu items may be offered by each
restaurant in order to meet regional preferences. All entrees served at Tony
Roma's restaurants are prepared to order. Menu items must be approved by the
Company's product research and development department, and menu offerings are
reviewed for concept integrity and tailored to meet changing consumer tastes.
The Tony Roma's menu currently features over 85 items which include a wide
variety of appetizers, lunch and dinner entrees, desserts and beverages.
Appetizers range in price from $3.99 to $7.99, entrees range in price from $3.99
to $11.99 for lunch and $4.99 to $16.49 for dinner, and dessert selections range
in price from $1.99 to $3.99. While menu prices of franchised restaurants
generally follow those of Company-owned restaurants, franchisees have the
ability to set their own menu prices, and there are regional variations. Each
restaurant serves coffee, iced tea and soft drinks with complimentary refills as
well as a broad offering of beer, wine and specialty alcoholic beverages.
Restaurant Design. In fiscal 1995, as part of an initiative to attract a
broader customer base, the Company implemented a major prototype redesign which
features a new interior decor package with improved lighting, color schemes and
decor. In addition, the Company has developed an exterior design which updates
its restaurants while maintaining an identifiable Tony Roma's image.
Restaurant Operations and Training. All Tony Roma's are operated according
to uniform operating standards and procedures relating to selection of menu
items, the quality and preparation of menu items, maintenance, cleanliness and
presentation of facilities and employee conduct. Company-owned restaurants are
typically run by one general manager, two to three assistant managers and a
kitchen manager. All of the Tony Roma's restaurant managers have completed a
comprehensive management training program which consists of an extensive
eight-week program conducted at certified training restaurants by regional
training managers. In addition, restaurant management development is continued
through periodic workshops and seminars sponsored by the Company. Detailed
operations manuals reflecting current operations and control procedures are
provided to each restaurant and district manager as well as others in the
organization.
Quality Control. The Company maintains a high level of quality standards
and emphasizes the importance of these standards in all aspects of its
purchasing, food preparation and service, training and management development
systems. These standards are promoted not only within Company-owned restaurants
but also throughout the franchise system. The quality standards of the Company's
food service are monitored by the Company's research and development quality
assurance staff and by unannounced visits by unidentified guests who have been
sent by the Company to evaluate a particular restaurant's food, service and
overall quality standards.
Advertising and Marketing. The Company advertises on a regional and local
basis, relying primarily on radio advertising to communicate its core message.
Historically, the Company has spent approximately 3% of net sales on advertising
expenditures. In fiscal 1998, advertising expenditures were distributed as
follows: radio (37%), television (36%), outdoor media (12%), newspaper (9%) and
other (6%). The production of marketing materials is funded through a joint
marketing account to which the Company, domestic franchisees,
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<PAGE> 37
and international franchisees contribute 0.5%, 0.5% and 0.25%, respectively, of
their annual gross sales (the "Joint Marketing Account"). The focus of external
marketing is the core ribs concept, while internal point-of-purchase advertising
focuses on add-ons and non-core menu items including appetizers, combination
platters, desserts and beverages.
Average Check. For fiscal 1998, the average guest check for Company-owned
restaurants was approximately $12.50.
UNIT ECONOMICS
The Company's management team focuses on selecting locations with the
potential of producing significant revenues while controlling capital
expenditures and occupancy costs as a percent of sales. The Company has opened
23 new prototype restaurants since the beginning of fiscal 1995 under the
ownership of NPC, 11 of which had been operating for at least 18 months as of
March 29, 1998. Such 11 restaurants, which had an average of approximately 200
seats, generated average revenue per restaurant of $2.1 million and average
restaurant cash flow of approximately $361,135 during the 18-month period ended
March 29, 1998. Average cash flow represents operating income before
depreciation and amortization. The average cash investment, excluding
pre-opening expenses, to open such 11 restaurants was approximately $1.7
million. Pre-opening expenses were approximately $131,982 per restaurant. Prior
to the Recapitalization, the Company's practice was to own the land and
buildings for a significant number of the Company-owned restaurants. In the
future, the Company expects to selectively use operating lease financing
facilities, thereby reducing the average capital expenditure required per
restaurant.
FRANCHISE OPERATIONS
Franchising became a key element of Tony Roma's growth strategy in 1984.
The Company currently has franchise arrangements with approximately 47
franchisees, including nine international franchisees, most of which are
multi-restaurant operators and the largest of which operates 24 restaurants. The
Company has generally selected franchisees that are experienced, successful,
multi-restaurant operators who have been involved with other restaurant
concepts. Although there are some single restaurant franchisees in the system,
the Company targets franchisees who can develop several restaurants.
As of March 29, 1998, the Company's franchisees operated 147 Tony Roma's
restaurants in 19 states and over 15 foreign countries (including ten
restaurants in Canada and 26 restaurants in the Asia Pacific region). The
Company estimates that franchisees will open a minimum of 15 restaurants in
fiscal 1999.
The Company's largest franchisee is WDI Systems, Inc. ("WDI") headquartered
in Tokyo, Japan. As of March 29, 1998, WDI, through its subsidiaries and
affiliates, operated 24 Tony Roma's restaurants. The largest domestic franchisee
is Cimms, Inc. which currently operates ten Tony Roma's restaurants in
California.
Domestic Franchise Arrangements. Each Tony Roma's franchise arrangement
consists of a development agreement and one or more separate franchise
agreements, one for each location. Development agreements grant the exclusive
right to develop a number of restaurants in a designated geographical area. The
term of a domestic development agreement varies depending on the number of
restaurants to be developed and generally ranges from one to five years. A
separate franchise agreement relating to the operation of each restaurant is
entered into by the franchisee and typically has a term of 20 years. Franchise
agreements generally permit renewal for a term of up to 20 years. On renewal,
the franchisee may be required, at the option of the Company, to sign the then
current form of franchise agreement (including the then current royalty rates
and advertising fees).
For each restaurant operated, a franchisee is currently obligated to pay to
the Company a royalty fee equal to 4% of the restaurant's monthly gross sales.
In addition, franchisees are required to contribute 0.5% of gross sales to the
Joint Marketing Account and may be required to participate in local market
advertising cooperatives. The Company's current form of development agreement
requires an initial franchise fee of $50,000 for each restaurant developed
during its term. The terms, royalties and advertising fees under a
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<PAGE> 38
limited number of franchise agreements and the franchise fees under older
development agreements vary from the currently offered franchise arrangements.
Each franchisee must meet certain operational, financial and business
requirements.
Restaurant Design and Construction. The Company makes available to
franchisees the plans and specifications for a typical restaurant, retaining the
right to prohibit or modify the use of any plan. Each franchisee, with
assistance from the Company, is responsible for selecting the site for each
restaurant within its territory, subject to the Company's approval.
Advertising. Domestic franchisees are required to spend at least 2% of
annual gross sales on local advertising and promotional activities. In addition,
franchisees are required to contribute 0.5% of their annual gross sales to the
Joint Marketing Account which is used generally for the design and production of
marketing materials. Under certain circumstances, the Company has the right to
form a marketing cooperative in which all cooperative members are required to
contribute up to 2% of annual gross sales to the cooperative for the purpose of
media advertising. The contributions to the cooperative are in lieu of
expenditures by individual members for local restaurant marketing.
Training and Support. The Company provides ongoing advice and assistance
to franchisees in connection with the operation and management of Tony Roma's
restaurants through training, meetings, seminars, on-premise visits, and by
written or other informational material. Such advice and assistance relates to
revisions to operating manual policies and procedures, and new developments,
techniques, and improvements in restaurant management, food and beverage
preparation, sales promotion, and service concepts.
Concept Integrity. The Company periodically monitors franchisee operations
and inspects restaurants, principally through franchise business managers who
report to the Company's Director of Franchise Operations. The Company makes both
scheduled and unannounced inspections of restaurants to ensure that only
approved products are in use and that Company prescribed practices and
procedures are followed. A minimum of three planned visits are made each year,
during which a representative of the Company conducts an inspection and
consultation at each restaurant. Franchisees must comply with the Company's high
standards of quality, service and cleanliness. The Company has the right to
terminate a franchise if a franchisee does not operate and maintain a Tony
Roma's restaurant in accordance with the Company's standards.
International Franchise Agreements. The Company franchises the Tony Roma's
concept internationally. The Company seeks highly qualified franchisees with the
resources to open multiple restaurants in each territory and familiarity with
the local business environment. The Company believes that the success of further
international expansion will depend upon, among other things, its ability to
attract qualified franchisees and operating personnel, to comply with the
regulatory requirements of foreign jurisdictions, and to supervise international
franchisee operations effectively. International franchisees pay an initial
franchise fee of $30,000 per restaurant, a royalty fee equal to 3% of gross
sales and 0.25% of gross sales to the Joint Marketing Account. In addition,
costs associated with visits to international locations by the Company's
personnel are borne by the franchisee.
Reporting and Royalty Collection. Franchisees are required to report
weekly sales by facsimile or telephone to the Company. In addition, franchisees
are required to report marketing expenditures to the Company. Franchisees are
required to make royalty payments and payments to the Joint Marketing Account
based upon gross sales for the previous month.
MANAGEMENT INFORMATION SYSTEMS
The POS System is installed in all Company-owned restaurants and is an
effective means of communication between each restaurant's servers and kitchen,
allowing employees to serve the customers in a quick and consistent manner while
maintaining a high level of control. In addition, the POS System is a source of
data for the Company's back office systems and provides support for inventory,
payroll, accounts payable and cash management. The back office system provides
management reporting and a communications interface to the Company's corporate
systems which enables the Company to supply on a daily basis, store level sales,
key
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<PAGE> 39
operating statistics and trend data to each restaurant generally less than ten
hours after the close of business. Quick access to operating data allows the
Company to deal with situations in a timely manner and assists in the monitoring
of quality assurance. As part of the Transition Services Agreement, the Company
was granted a perpetual license to use the POS System.
PURCHASING
To assure consistent product quality and to obtain optimum pricing,
purchases of food and restaurant equipment for Company-owned restaurants are
made through a centralized purchasing function in its corporate office in
Dallas, Texas. The Company negotiates directly with meat processors for its rib
inventory, which is principally maintained in various independent warehouses.
Inventory is then shipped to restaurants via commercial distributors. Produce
and dairy products are obtained locally. The Company is generally not dependent
upon any one supplier for availability of its products, and its food and other
products are generally available from a number of acceptable sources. The
Company has a policy of maintaining alternate suppliers for most of its baseline
products. The Company customarily obtains its food supplies through purchase
orders which are terminable at the option of either party without notice. The
Company does not manufacture any products nor act as a middleman. From time to
time, the Company engages in forward buying and may consider other strategies
with regard to rib costs in order to minimize the impact of potential
fluctuations in prices. This practice could help stabilize the Company's food
costs during times of fluctuating prices.
TRADEMARKS AND OTHER INTELLECTUAL PROPERTY
The registered trademarks "Tony Roma's," "Tony Roma's Famous for Ribs,"
"Tony Roma's A Place for Ribs," and all other trademarks, service marks,
symbols, slogans, emblems, logos, and designs used in the Company's restaurant
system are of material importance to its business. All trademark and franchise
rights are owned by the Company. The use of these marks is licensed to
franchisees under franchise agreements for use with respect to the operation and
promotion of their Tony Roma's restaurants.
COMPETITION
The Company's business and the restaurant industry in general are highly
competitive and are often affected by changes in consumer tastes and eating
habits, national, regional and local economic conditions, population and
demographic trends, traffic patterns and the location and number of, and type of
food served by, competing restaurants. The Company competes directly and
indirectly with all restaurants, from national and regional chains to local
establishments, including national and small rib chains and local independent
rib restaurants. The Company competes primarily on the basis of quality of food
and service, ambiance, location and price-value relationship. Many of the
Company's competitors are well-established in the mid-priced casual dining
segment and have access to greater financial, marketing and other resources than
the Company.
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<PAGE> 40
PROPERTIES
The following table lists the U.S. locations of each of the
Company-operated, joint venture and franchised restaurants as of June 28, 1998:
<TABLE>
<CAPTION>
COMPANY
STATE OWNED/JV FRANCHISED TOTAL
----- -------- ---------- -----
<S> <C> <C> <C>
Alabama................................................ 2 0 2
Alaska................................................. 0 1 1
Arizona................................................ 0 4 4
Arkansas............................................... 1 0 1
California(1).......................................... 6 32 38
Colorado............................................... 0 5 5
Florida................................................ 18 3 21
Hawaii................................................. 0 4 4
Kentucky............................................... 0 2 2
Maine.................................................. 0 1 1
Minnesota.............................................. 0 2 2
Missouri............................................... 1 0 1
Nebraska............................................... 0 1 1
Nevada................................................. 3 3 6
New York............................................... 0 1 1
North Carolina......................................... 1 0 1
Ohio................................................... 0 3 3
Oklahoma............................................... 1 0 1
Oregon................................................. 0 3 3
South Carolina......................................... 1 2 3
Tennessee.............................................. 1 0 1
Texas(1)............................................... 12 4 16
Utah................................................... 0 7 7
Washington............................................. 0 12 12
Wisconsin.............................................. 0 3 3
-- -- ---
Total U.S. .................................. 47 93 140
</TABLE>
- ---------------
(1) Includes one joint venture restaurant.
The Company owns the land and buildings for 17 restaurants and leases the
land and buildings for 20 restaurants. The Company owns the buildings and leases
the land for eight restaurants. In addition, the Company leases its headquarters
and various storage facilities.
The following table lists the international locations of each of the
franchised restaurants as of June 28, 1998:
<TABLE>
<CAPTION>
TOTAL
LOCATION FRANCHISED
-------- ----------
<S> <C>
Aruba............................................. 1
Bahamas........................................... 1
Canada............................................ 10
China............................................. 1
Guam.............................................. 2
Hong Kong......................................... 3
Indonesia......................................... 2
Japan............................................. 10
</TABLE>
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<PAGE> 41
<TABLE>
<CAPTION>
TOTAL
LOCATION FRANCHISED
-------- ----------
<S> <C>
Korea............................................. 3
Mexico............................................ 5
Peru.............................................. 1
Philippines....................................... 1
Puerto Rico....................................... 1
Saipan............................................ 1
Singapore......................................... 2
Spain............................................. 7
Taiwan............................................ 1
Thailand.......................................... 1
--
Total International..................... 53
</TABLE>
EMPLOYEES
As of March 29, 1998, the Company had approximately 2,760 employees (of
whom approximately 58% are part-time) including 48 headquarters and 221
management-level employees. The Company is not a party to any collective
bargaining agreements and believes its employee relations to be satisfactory.
GOVERNMENT REGULATION
All of the Company's operations are subject to various federal, state and
local laws that affect its business, including laws and regulations relating to
employment, health, sanitation, alcoholic beverage control and safety standards.
To date, federal and state environmental regulations have not had a material
effect on the Company's operations, but more stringent and varied requirements
of local governmental bodies with respect to zoning, building codes, land use
and environmental factors have in the past increased, and can be expected in the
future to increase, the cost of, and the time required for opening new
restaurants. Difficulties or failures in obtaining required licenses or
approvals could delay or prohibit the opening of new restaurants. In some
instances, the Company may have to obtain zoning variances and land use permits
for its new restaurants. The Company believes it is operating in compliance with
all material laws and regulations governing its operations.
Alcoholic beverage control regulations require each of the Company's
restaurants to apply to a state authority and, in certain locations, county or
municipal authorities for a license to sell alcoholic beverages. Generally, the
Company's licenses to sell alcoholic beverages must be renewed annually and may
be suspended or revoked at any time for cause, including violation by the
Company or its employees of any law or regulation pertaining to alcoholic
beverage control, such as those regulating the minimum age of patrons or
employees, advertising, wholesale purchasing and inventory control. In addition,
each restaurant requires food service licenses from local health authorities,
and the development and construction of additional restaurants will be subject
to compliance with applicable zoning, land use and environmental regulations.
Difficulty or failure in obtaining or retaining the required licenses or
approvals could have a material adverse effect on the Company's business,
financial condition and results of operations, including the delay or prevention
of the opening of a new restaurant in a particular location or the termination
of the franchise agreement pertaining to such restaurant.
The Company may be subject in certain states to "dram-shop" statutes which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment that wrongfully served alcoholic beverages to such
intoxicated person. The Company carries liquor liability insurance as part of
its existing comprehensive general liability insurance and is not as a defendant
in any lawsuit or claim involving "dram-shop" statutes.
The Company is also subject to a number of federal and state laws
regulating franchise offers, sales and the franchise relationship. Such laws
generally impose certain registration and disclosure requirements on franchisors
in the offer and sale of franchises and, in certain cases, also apply
substantive standards to the
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<PAGE> 42
relationship between franchisor and franchisee. The Company must also adhere to
Federal Trade Commission regulations governing disclosures in the sale of
franchises.
The Company is subject to the Fair Labor Standards Act, which governs such
matters as minimum wages, overtime and other working conditions and other
employment laws and regulations. A substantial majority of the Company's food
service personnel are paid at rates related to the minimum wage and,
accordingly, increases in the minimum wage result in higher labor costs. In
addition, legislation mandating health coverage for all employees, if passed,
will increase benefit costs since most hourly restaurant employees are not
currently covered under Company plans. The Company cannot always effect
immediate price increases to offset higher costs, and no assurance can be given
that the Company will be able to do so in the future.
LEGAL PROCEEDINGS
The Company had a case pending in the Court of Appeals, 2nd District of
Texas (the "Court of Appeals") arising out of a previous judgment against the
Company related to a cessation of lease payments. The Company posted a
supersedeas bond in the amount of $530,654 pending the appeals process. The case
was argued December 10, 1997, and on appeal, the Court of Appeals affirmed in
part, the judgment of the trial court and awarded the plaintiff additional
damages in the amount of $50,000. The Company is currently considering its
alternatives in the matter, but expects to file a Motion for Rehearing as to
certain damage issues in the Court of Appeals. Pursuant to the Recapitalization
Agreement, NPC has agreed to indemnify and hold the Company harmless for
liabilities and costs associated with this litigation, and the Company believes
that the outcome of the matter will not have a material adverse effect on the
Company's business, financial condition or results of operations.
From time to time, the Company is involved in various legal proceedings
arising in the ordinary course of its business. While the Company cannot predict
the outcome of these matters, management does not expect that these matters will
have a material adverse effect on the Company's business, financial condition or
results of operations.
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<PAGE> 43
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company and Holdings are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- ---- --------
<S> <C> <C>
Robert B. Page......................... 39 Chief Executive Officer, Director
Susan R. Holland....................... 42 Vice President, Finance -- Chief Financial
Officer
Jeffrey Hunter......................... 35 Vice President, Marketing
Paul Lyford............................ 50 Vice President, Training & Human Resources
David G. Short......................... 59 Vice President, Legal, Secretary and General
Counsel
Eric D. Bommer......................... 29 Director
David S. Lobel......................... 45 Director
John F. McCormack...................... 38 Director
Michael J. Myers....................... 57 Director
James K. Schwartz...................... 36 Director
</TABLE>
Robert B. Page has been President since June 1994. He serves as Chief
Executive Officer of the Company and as a director of the Company and Holdings.
Mr. Page joined the Company in October 1993 as Senior Vice President of
Operations and Chief Operations Officer until he became President. From August
1988 to October 1993, Mr. Page was Senior Vice President of Operations for the
Pizza Division of NPC International, Inc.
Susan R. Holland was with El Chico Restaurants, Inc. from 1985 until
joining the Company in August 1998. She last served as Acting Chief Financial
Officer and was a Vice President, Treasurer, Controller and Corporate Secretary.
Ms. Holland is a Certified Public Accountant.
Jeffrey Hunter joined the Company as Vice President, Marketing in August
1998. From 1993 to 1998, Mr. Hunter was Director of Marketing for the Captain
D's Seafood division of Shoney's, Inc. Prior to that, Mr. Hunter held positions
as Production Manager and Account Supervisor in the restaurant group of an
advertising agency.
Paul Lyford has been Vice President, Training & Human Resources since
November 1996. From January 1994 to October 1996, Mr. Lyford was a consultant at
Flock & Associates. From August 1986 to October 1993, Mr. Lyford was Vice
President, Human Resources of the Company.
David G. Short has been Vice President-Legal, General Counsel and Secretary
since September 1990. From 1986 to 1990, Mr. Short was Vice President, Legal and
General Counsel of TGI Friday's, Inc. Mr. Short also serves as Vice President of
NPC International, Inc. and certain of its affiliates.
Eric D. Bommer serves as a director of the Company and Holdings. Mr. Bommer
joined Sentinel in March 1997 and serves as a Vice President. Prior to joining
Sentinel, he was an associate at Gefinor Acquisition Partners, L.P., a private
equity investment partnership. From 1993 to 1995, he worked in the Investment
Banking Division of CS First Boston. From 1992 to 1993, Mr. Bommer worked at
LaSalle Partners. Mr. Bommer serves on the boards of various private companies.
David S. Lobel serves as a director of the Company and Holdings. Mr. Lobel
founded Sentinel in 1995 and presently serves as Managing Partner. From 1981 to
1995, Mr. Lobel was employed by First Century Partners, a venture capital
affiliate of Salomon Smith Barney, and served as a general partner of funds
managed by First Century from 1983 to 1995. Mr. Lobel serves on the boards of
various private companies.
John F. McCormack serves as a director of the Company and Holdings. Mr.
McCormack co-founded Sentinel in 1995 and presently serves as a Partner. From
1990 to 1995 Mr. McCormack served as a Vice President at First Century Partners.
From 1983 to 1990, Mr. McCormack was employed by Coopers & Lybrand, most
recently as a Manager. Mr. McCormack serves on the boards of various private
companies.
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<PAGE> 44
Michael J. Myers serves as a director of the Company and Holdings. Mr.
Myers is the President of First Century Partners and has been a senior advisory
partner to Sentinel since 1995. Mr. Myers co-founded First Century Partners in
1972 and has served as its President since 1976. Mr. Myers is a director of
Office Depot and various private companies.
James K. Schwartz serves as a director of the Company and Holdings. He has
served as President and Chief Operating Officer of NPC International, Inc. since
February 1995 and as a director since July 1996. From January 1993 to February
1995 Mr. Schwartz served as Vice President and Chief Financial Officer of NPC
International, Inc. From 1984 to 1991, he worked for Ernst & Young LLP.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for fiscal
1998 of those persons who served as (i) the chief executive officer during
fiscal 1997 and (ii) the other four most highly compensated executive officers
of the Company for fiscal 1997 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------
OTHER
ANNUAL TOTAL
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) COMPENSATION
- --------------------------- -------- ------- --------------- ------------
<S> <C> <C> <C> <C>
Robert B. Page.......................... $160,000 $23,207 $ 9,760 $192,967
Larry D. Zimmerman(2)................... 117,420 0 10,354 127,774
David T. Bellessa(2).................... 107,120 0 8,017 115,137
David G. Short.......................... 132,500 0 9,147 141,647
</TABLE>
- ---------------
(1) Includes profit sharing contributions, car allowance and insurance.
(2) Messrs. Zimmerman and Bellessa are no longer employees of the Company.
No options were granted to the Named Executive Officers. The following
table sets forth the aggregate number of options exercised by each of the Named
Executive Officers during fiscal 1997 as well as the value of unexercised
options held by them at the end of fiscal 1997:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END(#) FISCAL YEAR-END(3)
NAME EXERCISE(#)(1) REALIZED(2) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert B. Page............. 17,500 $67,188 75,000/45,000 $516,250/$273,125
Larry D. Zimmerman(4)...... 3,750 22,500 8,500/4,750 60,455/32,018
David T. Bellessa(4)....... -- -- 6,750/4,250 51,628/32,253
David G. Short............. -- -- 11,250/3,750 81,263/25,638
</TABLE>
- ---------------
(1) Represents shares of common stock of NPC.
(2) Represents the difference between the aggregate exercise price and the
closing price of NPC Common Stock on the dates of exercise.
(3) Represents the difference between the exercise price and $13.25, the mean
price of NPC Common Stock on March 31, 1998.
(4) Messrs. Zimmerman and Bellessa are no longer employees of the Company.
EMPLOYMENT AGREEMENTS
In connection with the Recapitalization, the Company entered into an
employment agreement with Mr. Page. Such agreement provides for: (i) a three
year employment term; (ii) severance benefits and
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<PAGE> 45
noncompetition, nonsolicitation and confidentiality agreements in certain
situations; (iii) the vesting of certain stock options in Holdings; and other
terms and conditions of Mr. Page's employment.
STOCK OPTION PLAN
Holdings adopted a stock option plan (the "Stock Plan"), which provides for
the grant to certain key employees and/or directors of the Company of stock
options that are non-qualified options for federal income tax purposes. The
Stock Plan will be administered by the Board of Directors of Holdings or a
committee thereof. The Board of Directors of Holdings or a committee thereof
have broad powers under the Stock Plan, including exclusive authority (except as
otherwise provided in the Stock Plan) to determine (i) who will receive awards,
(ii) the type, size and terms of awards, (iii) the time when awards will be
granted, and (iv) vesting criteria, if any, of the awards.
401(k) PLAN
The Company expects to establish a 401(k) plan (the "401(k) Plan") in which
substantially all employees of the Company will be eligible to participate. It
is anticipated that pursuant to the 401(k) Plan, the Company will match a
percentage of an employee's contributions up to a maximum percentage of the
employee's annual salary. In addition, the Company will be able to make
additional contributions determined at the discretion of the Company's Board of
Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Lobel, McCormack and Myers comprise the members of the Compensation
Committee.
COMPENSATION OF DIRECTORS
The Company reimburses directors for any out-of-pocket expenses incurred by
them in connection with services provided in such capacity. In addition, the
Company may compensate directors for services provided in such capacity.
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<PAGE> 46
SECURITY OWNERSHIP
All of the Company's issued and outstanding capital stock is owned by
Holdings; and the Sentinel Investors and NPC Holdings own securities
representing approximately 80% and 20%, respectively, of the voting power of
Holdings' fully-diluted Common Stock (before giving effect to options to be
issued to management).
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<PAGE> 47
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RECAPITALIZATION AGREEMENT
The Recapitalization Agreement contains customary provisions for such
agreements, including representations and warranties with respect to the
condition and operations of the business, covenants with respect to the conduct
of the business prior to the closing date of the Recapitalization and various
closing conditions, including the execution of a transitional services
agreement, registration rights agreement and stockholders agreement, the
obtaining of financing, the expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the continued accuracy of the representations and warranties.
Pursuant to the Recapitalization Agreement, NPC Holdings and NPC will
indemnify Sentinel against any and all damages resulting from any
misrepresentation or breach of warranty of NPC Holdings, NPC or the Company
contained in the Recapitalization Agreement, a claim for which is made (in most
cases) no later than one year after the closing date of the Recapitalization.
The indemnification obligations of NPC Holdings and NPC under the
Recapitalization Agreement are generally subject to a minimum aggregate
threshold amount and limited to a maximum aggregate amount.
STOCKHOLDERS AGREEMENT
Upon the consummation of the Recapitalization, Holdings and all of its
stockholders, including the Sentinel Investors and NPC Holdings (collectively,
the "Stockholders") entered into a stockholders agreement (the "Stockholders
Agreement"). The Stockholders Agreement: (i) requires that each of the parties
thereto vote all of its voting securities of Holdings and take all other
necessary or desirable actions to (y) cause the size of the Board of Directors
of Holdings and the Company to consist of five to 11 members and (z) cause up to
ten designees of Sentinel and up to one designee of NPC Holdings to be elected
to the Board of Directors of Holdings and the Company; (ii) grants Holdings,
Sentinel, and in certain circumstances the other Stockholders, a right of first
refusal on any proposed transfer of shares of capital stock of Holdings held by
NPC Holdings and any of the other Stockholders; (iii) grants tag-along rights on
certain transfers by Sentinel and Sentinel Capital Partners II, L.P. of shares
of capital stock of Holdings; (iv) requires the Stockholders to consent to a
sale of the Company to an independent third party if such sale is approved by
certain holders of the then outstanding shares of voting common stock of
Holdings; and (v) except in certain instances, prohibits any stockholder from
transferring any shares of capital stock of Holdings until the first anniversary
of the date of the consummation of the Recapitalization. Certain of the
foregoing provisions of the Stockholders Agreement will terminate upon the
consummation of Public Sale, a Qualified Public Offering or an Approved Sale (as
each is defined in the Stockholders Agreement).
EQUITY REGISTRATION RIGHTS AGREEMENT
Upon the consummation of the Recapitalization, Holdings and all of its
stockholders, including the Sentinel Investors and NPC Holdings, entered into a
registration rights agreement (the "Equity Registration Rights Agreement").
Under the Equity Registration Rights Agreement, the holders of a majority of the
Sentinel Registrable Securities (as defined in the Equity Registration Rights
Agreement) or NPC Holdings has the right, subject to certain conditions, to
require Holdings to register any or all of their shares of common stock of
Holdings under the Securities Act at Holdings' expense. In addition, all holders
of Registrable Securities (as defined in the Equity Registration Rights
Agreement) are entitled to request the inclusion of any shares of common stock
of Holdings subject to the Equity Registration Rights Agreement in any
registration statement at Holdings' expense whenever Holdings proposes to
register any of its common stock under the Securities Act. In connection with
all such registrations, Holdings agrees to indemnify all holders of Registrable
Securities against certain liabilities, including liabilities under the
Securities Act.
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<PAGE> 48
TRANSITION SERVICES AGREEMENT
Pursuant to the Transitional Financial and Accounting Services Agreement,
NPC will continue to provide administrative services to the Company for $16,000
per week for a period of up to one year. Services provided will include
accounting services, payroll services and use of NPC's proprietary restaurant
technology system software. As part of the agreement, the Company was granted a
perpetual license to use the POS System.
PAYMENT OF CERTAIN FEES AND EXPENSES
The Company reimbursed Sentinel for all out-of-pocket expenses incurred in
connection with the Recapitalization. In addition, pursuant to a management
agreement, Sentinel will receive a management fee equal to $300,000 per annum
for the first two years of the term of the management agreement and $500,000 per
annum thereafter, and will be reimbursed for certain out-of-pocket expenses.
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<PAGE> 49
DESCRIPTION OF NEW REVOLVING CREDIT FACILITY
Concurrently with the consummation of the Transactions, the Company entered
into an agreement with The Provident Bank to provide for a Revolving Credit
Facility (the "New Revolving Credit Facility"). The New Revolving Credit
Facility provides for borrowings in an aggregate principal amount of up to $15
million. The following summary of the New Revolving Credit Facility does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the New Revolving Credit Facility.
Interest. The New Revolving Credit Facility is a five-year facility and
bears interest at a rate per annum equal (at the Company's option) to: (i) a
floating rate per annum equal to the Prime Rate (as defined in the New Revolving
Credit Facility); or (ii) a floating rate per annum equal to 2.25% in excess of
the LIBOR Rate (as defined in the New Revolving Credit Facility). Obligations of
the Company under the New Revolving Credit Facility not paid when due shall bear
interest at a default rate equal to 2% in excess of the non-default interest
rate. The Company is required to pay The Provident Bank, commitment and other
similar fees.
Security. The obligations of the Company under the New Revolving Credit
Facility are secured by substantially all of the assets of the Company.
Prepayments. Voluntary prepayments of borrowings under the New Revolving
Credit Facility and voluntary reductions of the unutilized portions of the New
Revolving Credit Facility are permitted. Prepayments during the first year are,
in connection with an early termination of the agreement, subject to a 1%
premium, other than certain mandatory prepayments.
Covenants. The New Revolving Credit Facility contains a number of
covenants that, among other things, restricts the ability of the Company and its
subsidiaries, subject to certain exceptions, to dispose of assets, incur
additional indebtedness, incur guarantee obligations, prepay other indebtedness
or amend other debt instruments, make distributions or pay dividends on
partnership interests or capital stock, redeem and repurchase partnership
interests or capital stock, create liens on assets, enter into sale and
leaseback transactions, make investments, loans or advances, make acquisitions,
engage in mergers or consolidations, change the business conducted by the
Company or its subsidiaries or engage in certain transactions with affiliates
and otherwise restrict certain business activities. In addition, the Company is
required to maintain compliance with minimum interest coverage ratio and maximum
leverage ratio.
The New Revolving Credit Facility also contains provisions that will
prohibit any modification of the Indentures without the consent of The Provident
Bank.
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<PAGE> 50
DESCRIPTION OF EXCHANGE NOTES
The Exchange Notes will be issued under an indenture (the "Indenture"),
dated as of July 1, 1998 by and among the Company, the Guarantors, Holdings, and
United States Trust Company of New York, as trustee (the "Trustee"). The
following summary of certain provisions of the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Trust Indenture Act of 1939, as amended (the "TIA"), and to all of the
provisions of the Indenture, including the definitions of certain terms therein
and those terms made a part of the Indenture by reference to the TIA as in
effect on the date of the Indenture. A copy of the Indenture may be obtained
from the Company. The definitions of certain capitalized terms used in the
following summary are set forth below under "-- Certain Definitions." For
purposes of this section, references to the "Company" include only Romacorp,
Inc. and not its Subsidiaries.
The Exchange Notes will be issued in fully registered form only, without
coupons, in denominations of $1,000 and integral multiples thereof. Initially,
the Trustee will act as Paying Agent and Registrar for the Exchange Notes. The
Exchange Notes may be presented for registration or transfer and exchange at the
offices of the Registrar, which initially will be the Trustee's corporate trust
office. The Company may change any Paying Agent and Registrar without notice to
holders of the Exchange Notes (the "Holders"). The Company will pay principal
(and premium, if any) on the Exchange Notes at the Trustee's corporate office in
New York, New York. At the Company's option, interest may be paid at the
Trustee's corporate trust office or by check mailed to the registered address of
Holders. Any Notes that remain outstanding after the completion of the Exchange
Offer, together with the Exchange Notes issued in connection with the Exchange
Offer, will be treated as a single class of securities under the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Senior Notes are limited in aggregate principal amount to $100.0
million, of which $75.0 million was issued on the Issue Date, and will mature on
July 1, 2006. Interest on the Senior Notes will accrue at a rate of 12% per
annum and, will be payable semiannually in cash on each January 1 and July 1,
commencing on January 1, 1999, for the period commencing on and including the
immediately preceding Interest Payment Date and ending on and including the day
next preceding the Interest Payment Date (an "Interest Period"). Interest is
payable to the persons who are registered Holders at the close of business on
the December 15 and June 15 immediately preceding the applicable Interest
Payment Date.
REDEMPTION
Optional Redemption. The Senior Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after July 1,
2003, upon not less than 30 nor more than 60 days notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve month period commencing July 1 on of the year set
forth below, plus, in each case, accrued and unpaid interest thereon, if any, to
the date of redemption:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003...................................................... 106.000%
2004...................................................... 104.000%
2005 and thereafter....................................... 102.000%
</TABLE>
Optional Redemption upon Public Equity Offerings and Strategic Equity
Investments. At any time, or from time to time, on or prior to July 1, 2001,
the Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings or Strategic Equity Investments (each as defined below) to
redeem the Senior Notes at a redemption price equal to 112.00% of the principal
amount thereof plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided that at least 65% of the principal amount of Senior Notes
originally issued remains outstanding immediately after any such redemption. In
order to effect the foregoing redemption with the proceeds of any Public Equity
Offering or Strategic Equity Investments, the Company shall make such redemption
not more than 120 days after the consummation of any such Public Equity
Offering.
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<PAGE> 51
As used in the preceding paragraph, "Public Equity Offering" means an
underwritten public offering of Qualified Capital Stock of the Company or of
Holdings pursuant to a registration statement filed with the Commission in
accordance with the Securities Act; provided that in the event of a Public
Equity Offering by Holdings, Holdings contributes to the common equity capital
of the Company (other than Disqualified Capital Stock of the Company) the
portion of the net cash proceeds of such Public Equity Offering necessary to pay
the aggregate redemption price (plus accrued and unpaid interest and Additional
Interest, if any, thereon to the redemption date) of the Senior Notes to be so
redeemed.
As used in the preceding paragraph, "Strategic Equity Investment" means an
Investment in Qualified Capital Stock of the Company or Holdings with cash
proceeds to the Company or Holdings, as the case may be, of at least $30.0
million by a Strategic Investor (as defined); provided that in the case of a
Strategic Equity Investment in Holdings, Holdings contributes to the common
equity capital of the Company (other than Disqualified Capital Stock of the
Company) the portion of the net cash proceeds of such Strategic Equity
Investment necessary to pay the aggregate redemption price (plus accrued and
unpaid interest and Additional Interest, if any, thereon to the redemption date)
of the Senior Notes to be redeemed. "Strategic Investors" means a Person which,
prior to the making of a Strategic Equity Investment, (i) is (or a Subsidiary of
which is, or is a Subsidiary of a Person which, or a Subsidiary of which, is)
engaged in a business which would be permitted to be conducted by the Company
pursuant to the covenant "Conduct of Business" and (ii) has (or is a Subsidiary
of a Person which has) a common equity market capitalization of at least $2.0
billion.
The Senior Notes will not be entitled to the benefit of any mandatory
sinking fund.
SELECTION AND NOTICE OF REDEMPTION
In the event that less than all of the Senior Notes are to be redeemed at
any time, selection of such Senior Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which such Senior Notes are listed or, if such Senior Notes
are not then listed on a national securities exchange, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Senior Notes of a principal amount of $1,000 or less shall be
redeemed in part; provided, further, that if a partial redemption is made with
the proceeds of a Public Equity Offering, selection of the Senior Notes or
portions thereof for redemption shall be made by the Senior Trustee only on a
pro rata basis or on as nearly a pro rata basis as is practicable (subject to
DTC procedures), unless such method is otherwise prohibited. Notice of
redemption shall be mailed by first-class mail at least 30 but not more than 60
days before the redemption date to each Holder of Senior Notes to be redeemed at
its registered address. If any Senior Note is to be redeemed in part only, the
notice of redemption that relates to such Senior Note shall state the portion of
the principal amount thereof to be redeemed. A new Senior Note in a principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Senior Note. On and after the
redemption date, interest will cease to accrue on Senior Notes or portions
thereof called for redemption as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to the Indenture.
SUBSIDIARY GUARANTEES
The Exchange Notes will be guaranteed by each of the Company's Subsidiaries
on the Issue Date and by certain of the Company's Restricted Subsidiaries formed
or acquired after the Issue Date. See "Certain Covenants -- Issuance of
Subsidiary Guarantees." In the event all of the Capital Stock of a Guarantor
owned by the Company and the Restricted Subsidiaries is sold by the Company
and/or one or more Restricted Subsidiaries or all or substantially all of the
assets of a Guarantor are sold by such Guarantor and the sale complies with the
provisions set forth under "Certain Covenants -- Limitation on Asset Sales,"
such Guarantor's Guarantee will be released.
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<PAGE> 52
CHANGE OF CONTROL
The Indenture provides that upon the occurrence of a Change of Control,
each Holder will have the right to require that the Company purchase all or a
portion of such Holder's Senior Notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued interest to the date of purchase.
Within 30 days following the date upon which the Change of Control
occurred, the Company must send, by first class mail, a notice to each Holder,
with a copy to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state, among other things, the purchase date,
which must be no earlier than 30 days nor later than 45 days from the date such
notice is mailed, other than as may be required by law (the "Change of Control
Payment Date"). Holders electing to have a Senior Note purchased pursuant to a
Change of Control Offer will be required to surrender the Senior Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
Note completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third business day prior to the Change of
Control Payment Date.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the Change of Control
purchase price for all the Senior Notes that might be delivered by Holders
seeking to accept the Change of Control Offer. In the event the Company is
required to purchase outstanding Senior Notes pursuant to a Change of Control
Offer, the Company expects that it would seek third party financing to the
extent it does not have available funds to meet its purchase obligations.
However, there can be no assurance that the Company would be able to obtain such
financing.
Neither the Board of Directors of the Company nor the Trustee may waive the
covenant relating to a Holder's right to redemption upon a Change of Control.
Restrictions in the Indenture described herein on the ability of the Company and
its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on
their property, to make Restricted Payments and to make Asset Sales may also
make more difficult or discourage a takeover of the Company, whether favored or
opposed by the management of the Company. Consummation of any such transaction
in certain circumstances may require redemption or repurchase of the Senior
Notes, and there can be no assurance that the Company or the acquiring party
will have sufficient financial resources to effect such redemption or
repurchase. Such restrictions and the restrictions on transactions with
Affiliates may, in certain circumstances, make more difficult or discourage any
leveraged buyout of the Company or any of its Subsidiaries by the management of
the Company. While such restrictions cover a wide variety of arrangements which
have traditionally been used to effect highly leveraged transactions, the
Indenture may not afford the Holders of Senior Notes protection in all
circumstances from the adverse aspects of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Senior Notes pursuant to a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
"Change of Control" provisions of the Indenture, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Change of Control" provisions of the
Indenture by virtue thereof.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Incurrence of Additional Indebtedness. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "incur") any Indebtedness (other than Permitted
Indebtedness); provided, however, that if no Default or Event of Default shall
have occurred and be continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company or any Guarantor may incur
Indebtedness (including, without limitation, Acquired Indebtedness) and
Restricted Subsidiaries of the Company which are not Guarantors
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<PAGE> 53
may incur Acquired Indebtedness, in each case if on the date of the incurrence
of such Indebtedness, after giving effect to the incurrence thereof, the
Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to
1.0.
The Indenture also provides that the Company will not, and will not permit
any Guarantor to, incur any Indebtedness that is contractually subordinated in
right of payment to any other Indebtedness of the Company or a Guarantor, as the
case may be, unless such Indebtedness is also contractually subordinated in
right of payment to the Senior Notes or the Guarantee of such Guarantor, as the
case may be, on substantially identical terms; provided, however, that no
Indebtedness of the Company or a Guarantor shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Guarantor, as the case may be, solely by virtue of being unsecured.
Limitation on Restricted Payments. The Company will not, and will not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
(a) pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Company) on or in
respect of shares of the Company's Capital Stock to holders of such Capital
Stock, (b) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, (c) make any principal payment on,
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for
value, prior to any required payment, any Indebtedness of the Company or a
Guarantor that is subordinate or junior in right of payment to the Notes or the
Guarantee of such Guarantor or (d) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) a Default or
an Event of Default shall have occurred and be continuing or (ii) the Company is
not able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with the "Limitation on Incurrence of
Additional Indebtedness" covenant or (iii) the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to the
Issue Date (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50%
of the cumulative Consolidated Net Income (or if cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss) of the Company earned
subsequent to March 29, 1998 and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net proceeds (including the fair market
value of property other than cash (determined in good faith by the Board of
Directors)) received by the Company from any Person (other than a Subsidiary of
the Company) as a contribution to the common equity capital of the Company or
from the issuance and sale of Qualified Capital Stock of the Company or from the
issue or sale of Disqualified Capital Stock of the Company or Indebtedness of
the Company that has been converted into Qualified Capital Stock of the Company,
in each case subsequent to the Issue Date and on or prior to the Reference Date;
plus (y) without duplication of any amounts included in clause (iii)(x) above,
100% of the aggregate net proceeds (including the fair market value of property
other than cash (determined in good faith by the Board of Directors)) of any
equity contribution received by the Company from a holder of the Company's
Capital Stock (excluding, in the case of clauses (iii)(x) and (y), any net cash
proceeds from a Public Equity Offering or Strategic Equity Investment to the
extent used to redeem the Senior Notes in accordance with the provisions under
the caption entitled "Redemption -- Optional Redemption upon Public Equity
Offerings and Strategic Equity Investments"); plus (z) without duplication, the
sum of (1) the aggregate amount returned (including the fair market value of
property other than cash (determined in good faith by the Board of Directors))
on or with respect to Investments (other than Permitted Investments) made
subsequent to the Issue Date whether through interest payments, principal
payments, dividends or other distributions or payments, (2) the net cash
proceeds received by the Company or any of its Restricted Subsidiaries from the
disposition of all or any portion of such Investments (other than to a
Subsidiary of the Company) and (3) upon redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary;
provided, however, that the sum of clauses (1), (2) and (3) above shall not
exceed the aggregate amount of all such Investments made subsequent to the Issue
Date.
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<PAGE> 54
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit: (1) the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or the
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any shares of Capital
Stock of the Company, either (i) solely in exchange for shares of Qualified
Capital Stock of the Company or (ii) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Qualified Capital Stock of the Company; (3) if no Default
or Event of Default shall have occurred and be continuing, the acquisition of
any Indebtedness of the Company or a Guarantor that is subordinate or junior in
right of payment to the Senior Notes or a Guarantee either (i) solely in
exchange for shares of Qualified Capital Stock of the Company, or (ii) through
the application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of (A) shares of Qualified Capital
Stock of the Company or (B) Refinancing Indebtedness; (4) payments for the
purpose of and in an amount equal to the amount required to permit the Company
to redeem or repurchase its equity or options in respect thereof, in each case
in connection with the terms of any employee stock option or stock purchase
agreements or other agreements to compensate management or other employees;
provided that such redemptions or repurchases pursuant to this clause (4) shall
not exceed $5.0 million (which amount shall be increased by the amount of any
net cash proceeds to the Company from (x) sales of Capital Stock of the Company
to management or other employees subsequent to the Issue Date to the extent such
amounts have not been included in clause (iii) in the foregoing paragraph and
(y) any "key-man" life insurance policies which are used to make such
redemptions or repurchases) in the aggregate; provided, further, that the
cancellation of Indebtedness owing to the Company from management or other
employees of the Company or any of its Restricted Subsidiaries in connection
with a repurchase of Capital Stock of the Company will not be deemed to
constitute a Restricted Payment under the Indenture; (5) repurchases of Capital
Stock deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price thereof; (6) so long as no Default or
Event of Default shall have occurred and be continuing, payments not to exceed
$500,000 in the aggregate to enable the Company to make payments to holders of
its Capital Stock in lieu of issuance of fractional shares of its Capital Stock;
(7) payments or other distributions made in connection with the
Recapitalization; (8) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Common Stock on a pro rata basis; (9) the
making of distributions, loans or advances to Holdings in an amount not to
exceed $300,000 per annum in order to permit Holdings to pay required and
ordinary operating expenses of Holdings (including, without limitation,
directors' fees, indemnification obligations, professional fees and expenses);
(10) distributions to Holdings to fund the required tax obligations of Holdings
related to income generated by the Company and its Restricted Subsidiaries and
taxable to Holdings; (11) if no Default or Event of Default shall have occurred
and be continuing, other Restricted Payments in an aggregate amount not to
exceed $3.0 million. In determining the aggregate amount of Restricted Payments
made subsequent to the Issue Date in accordance with clause (iii) of the
immediately preceding paragraph, (a) amounts expended pursuant to clauses (1),
(2), 3(i), 3(ii)(A), (4), (8) and (11) shall be included in such calculation;
provided that such expenditures pursuant to clause (4) shall not be included to
the extent of cash proceeds received by the Company from any "key-man" life
insurance policies and (b) amounts expended pursuant to clauses (3)(ii)(B), (5),
(6), (7), (9) and (10) shall be excluded from such calculation.
Limitation on Asset Sales. The Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Company's Board of Directors), (ii) at least 75% of the consideration
received by the Company or the Restricted Subsidiary, as the case may be, from
such Asset Sale shall be in the form of cash or Cash Equivalents and is received
at the time of such disposition provided that the amount of (x) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet), of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Senior
Notes or any Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the
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<PAGE> 55
Company or such Restricted Subsidiary from further liability and (y) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are immediately converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision; and (iii)
upon the consummation of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset
Sale within 365 days of receipt thereof either (A) to prepay any Indebtedness
secured by assets subject to such Asset Sale (and, in the case of any such
Indebtedness under any revolving credit facility, including the New Revolving
Credit Facility, effect a permanent reduction in the availability under such
revolving credit facility), (B) to make an investment in properties and assets
that replace the properties and assets that were the subject of such Asset Sale
or in properties and assets of a kind used or usable in the business of the
Company and its Restricted Subsidiaries as conducted in accordance with the
"Conduct of Business" covenant or to acquire Capital Stock of any Person which
upon such acquisition becomes a Restricted Subsidiary and which conducts
business in accordance with the "Conduct of Business" covenant ("Replacement
Assets"), or (C) a combination of prepayment and investment permitted by the
foregoing clauses (iii)(A) and (iii)(B). On the 366th day after an Asset Sale or
such earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the
next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B)
and (iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount")
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that
amount of Senior Notes equal to the Net Proceeds Offer Amount at a price equal
to 100% of the principal amount of the Senior Notes to be purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase; provided,
however, that if at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this covenant. The Company may defer the Net Proceeds Offer until there is an
aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0
million, shall be applied as required pursuant to this paragraph) and, upon such
application, the Net Proceeds Offer Amount shall be reset at zero.
Notwithstanding the immediately preceding paragraph, the Company and the
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with the prior paragraph if (i) the Company or the applicable
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value of the assets or other
property sold, issued or otherwise disposed of (as evidenced by a resolution of
the Company's Board of Directors) and (ii) at least 75% of the consideration for
such Asset Sale constitutes Capital Stock of a Person which, upon acquisition,
becomes a Restricted Subsidiary and which is in a business of the type described
in the "Conduct of Business" covenant, long-term assets used or useful in such
business and/or cash or Cash Equivalents; provided that any cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries in
connection with any Asset Sale permitted to be consummated under this paragraph
shall be added to the Net Proceeds Offer Amount.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under "-- Merger, Consolidation
and Sale of Assets," the successor corporation shall be deemed to have sold the
properties and assets of the Company and its Restricted Subsidiaries not so
transferred for purposes of this covenant, and shall comply with the provisions
of this covenant with respect to such deemed sale as if it were an Asset Sale.
In addition, the fair market value of such properties and assets of the Company
or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this covenant.
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<PAGE> 56
Each Net Proceeds Offer will be mailed to the record Holders as shown on
the register of Holders within 25 days following the Net Proceeds Offer Trigger
Date (or if the Net Proceeds Offer has been deferred as described in the first
paragraph of this covenant, the date that the aggregate unutilized Net Proceeds
Offer Amount equals or exceeds $5.0 million), with a copy to the Trustee, and
shall comply with the procedures set forth in the Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Senior Notes
in whole or in part in integral multiples of $1,000 in exchange for cash. To the
extent Holders properly tender Senior Notes in an amount exceeding the Net
Proceeds Offer Amount, Senior Notes of tendering Holders will be purchased on a
pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain
open for a period of at least 20 and not more than 30 business days or such
longer period as may be required by law. To the extent that the aggregate amount
of Senior Notes tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer
Amount for general corporate purposes. Upon completion of any such Net Proceeds
Offer, the Net Proceeds Offer Amount shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Senior Notes pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with the "Asset
Sale" provisions of the Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the "Asset Sale" provisions of the Senior Indenture by virtue
thereof.
Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to (a) pay dividends or
make any other distributions on or in respect of its Capital Stock; (b) make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or (c) transfer any
of its property or assets to the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) the Indenture, the Senior Notes and the New
Revolving Credit Facility; (3) non-assignment provisions of any contract or any
lease; (4) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired; (5) agreements existing on the Issue Date to the extent and in the
manner such agreements are in effect on the Issue Date; (6) restrictions on the
transfer of assets subject to any Lien permitted under the Indenture imposed by
the holder of such Lien; (7) restrictions imposed by any agreement to sell
assets or Capital Stock permitted under the Indenture to any Person pending the
closing of such sale; (8) any agreement or instrument governing Capital Stock of
any Person that is acquired; (9) other Indebtedness permitted to be incurred
subsequent to the Issue Date pursuant to the provisions of the covenant
described under "Limitation on Incurrence of Additional Indebtedness"; provided
that any such restrictions are ordinary and customary with respect to the type
of Indebtedness being incurred (under the relevant circumstances); and provided,
further that after giving effect to any such encumbrance or restriction, the
Company would be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the covenant described under "Limitation on
Incurrence of Additional Indebtedness"; (10) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business; (11) Purchase Money Indebtedness for property
acquired that impose restrictions of the nature described in clause (c) above on
the property so acquired; (12) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; and (13) any
encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in clauses
(2) through (12) above; provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Company's Board of
Directors, no more restrictive with respect to such dividend and other payment
restrictions than those contained in the dividend or other payment restrictions
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prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing.
Limitation on Preferred Stock of Restricted Subsidiaries. The Company will
not permit any of its Restricted Subsidiaries (other than Guarantors) to issue
any preferred stock (other than to the Company or to a Wholly Owned Restricted
Subsidiary of the Company) or permit any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company) to own any preferred stock of
any Restricted Subsidiary of the Company which is not a Guarantor.
Limitation on Liens. The Company will not, and will not cause or permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Restricted Subsidiaries whether
owned on the Issue Date or acquired after the Issue Date, or any proceeds
therefrom, or assign or otherwise convey any right to receive income or profits
therefrom unless (i) in the case of Liens securing Indebtedness that is
expressly subordinate or junior in right of payment to the Senior Notes or a
Guarantee, the Senior Notes or such Guarantee, as the case may be, are secured
by a Lien on such property, assets or proceeds that is senior in priority to
such Liens and (ii) in all other cases, the Senior Notes are equally and ratably
secured, except for (A) Liens existing as of the Issue Date and any extensions,
renewals or replacements thereof, (B) Liens of the Company or a Wholly Owned
Restricted Subsidiary of the Company on assets of any Restricted Subsidiary of
the Company; (C) Liens securing the Senior Notes or a Guarantee; (D) Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under the Indenture and
which has been incurred in accordance with the provisions of the Indenture;
provided, however, that such Liens (i) are no less favorable to the Holders and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (ii) do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced; and (E) Permitted
Liens.
Merger, Consolidation and Sale of Assets. The Company will not, in a
single transaction or series of related transactions, consolidate or merge with
or into any Person, or sell, assign, transfer, lease, convey or otherwise
dispose of (or cause or permit any Restricted Subsidiary of the Company to sell,
assign, transfer, lease, convey or otherwise dispose of) all or substantially
all of the Company's assets (determined on a consolidated basis for the Company
and the Company's Restricted Subsidiaries) whether as an entirety or
substantially as an entirety to any Person unless: (i) either (1) the Company
shall be the surviving or continuing corporation or (2) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment, transfer, lease,
conveyance or other disposition the properties and assets of the Company and of
the Company's Restricted Subsidiaries substantially as an entirety (the
"Surviving Entity") (x) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the District of
Columbia and (y) shall expressly assume, by supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any, and
interest on all of the Senior Notes and the performance of every covenant of the
Senior Notes, the Indenture and the Registration Rights Agreement on the part of
the Company to be performed or observed; (ii) immediately after giving effect to
such transaction and the assumption contemplated by clause (i)(2)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, shall be
able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the "-- Limitation on Incurrence of Additional
Indebtedness" covenant; (iii) immediately before and immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(2)(y)
above (including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and (iv) the Company or
the Surviving Entity shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply
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<PAGE> 58
with the applicable provisions of the Indenture and that all conditions
precedent in the Indenture relating to such transaction have been satisfied.
Notwithstanding clause (ii) of the preceding sentence, (a) any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company and (b) the Company may merge
with an Affiliate incorporated solely for the purpose of reincorporating the
Company in another jurisdiction.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
The Indenture provides that upon any consolidation, combination or merger
or any transfer of all or substantially all of the assets of the Company in
accordance with the foregoing, in which the Company is not the continuing
corporation, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture and the Senior Notes with the same effect as if
such surviving entity had been named as such.
No Guarantor (other than any Guarantor whose Guarantee is to be released in
accordance with the terms of the Guarantee and Indenture in connection with any
transaction complying with the provisions of the covenant described under
" -- Limitation on Asset Sales") will, and the Company will not cause or permit
any Guarantor to, consolidate with or merge with or into any Person other than
the Company or any other Guarantor unless: (i) the entity formed by or surviving
any such consolidation or merger (if other than the Guarantor) is a corporation
organized and existing under the laws of the United States or any State thereof
or the District of Columbia; (ii) such entity assumes by supplemental indenture
all of the obligations of the Guarantor under the Indenture, such Guarantor's
Guarantee and the Registration Rights Agreement; (iii) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing; (iv) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (ii) of the first paragraph of this covenant;
and (v) the Company shall have delivered to the Trustee an officers' certificate
and opinion of counsel, each stating that such consolidation or merger and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of the Indenture
and that all conditions precedent in the Indenture relating to such transaction
have been satisfied.
Limitations on Transactions with Affiliates. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under paragraph (b) below and (y) Affiliate Transactions
on terms that are not materially less favorable than those that might reasonably
have been obtained in a comparable transaction at such time on an arm's-length
basis from a Person that is not an Affiliate of the Company or such Restricted
Subsidiary. All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $1.0 million
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $10.0 million, the Company or such
Restricted Subsidiary, as the case may be, shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Restricted
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
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(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary of the Company as determined in good faith by the Company's Board of
Directors or senior management; (ii) transactions exclusively between or among
the Company and any of its Restricted Subsidiaries or exclusively between or
among such Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by the Indenture; (iii) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the Holders in any material respect than the original agreement as in effect on
the Issue Date; (iv) Restricted Payments permitted by the Indenture; (v) the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of, its obligations under the terms of, any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter, provided, however, that the existence of, or
the performance by the Company or any of its Restricted Subsidiaries of
obligations under, any future amendment to any such existing agreement or under
any similar agreement entered into after the Issue Date shall only be permitted
by this clause (v) to the extent that the terms of any such amendment or new
agreement are not otherwise disadvantageous to the Holders of the Senior Notes
in any material respect; (vi) transactions permitted by, and complying with, the
provisions of the covenant described under " -- Merger, Consolidation and Sale
of Assets"; (vii) the Recapitalization and the transactions contemplated by the
Recapitalization Agreement; (viii) any employment agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary; and (ix) transactions with customers, franchisees, clients,
suppliers, joint venture partners or purchasers or sellers of goods or services,
in each case in the ordinary course of business (including, without limitation,
pursuant to joint venture agreements) and otherwise in compliance with the terms
of the Indenture, which are fair to the Company or its Restricted Subsidiaries,
in the reasonable determination of the Board of Directors of the Company or the
senior management thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party.
Issuance of Subsidiary Guarantees. If (a) any Domestic Wholly Owned
Restricted Subsidiary incurs any Indebtedness (other than Indebtedness owing to
the Company or a Restricted Subsidiary) or (b) any Restricted Subsidiary
(whether or not a Domestic Wholly Owned Restricted Subsidiary) guarantees any
Indebtedness (other than Indebtedness owing to the Company or a Restricted
Subsidiary) of the Company or any Restricted Subsidiary then, in either case,
the Company shall cause such Domestic Wholly Owned Restricted Subsidiary or
Restricted Subsidiary, as the case may be, to (i) execute and deliver to the
Trustee a supplemental indenture in form reasonably satisfactory to the Trustee
pursuant to which such Domestic Wholly Owned Restricted Subsidiary or Restricted
Subsidiary, as the case may be, shall unconditionally guarantee (each, a
"Guarantee") all of the Company's obligations under the Senior Notes and the
Indenture on the terms set forth in the Indenture and (ii) deliver to the
Trustee an opinion of counsel (which may contain customary exceptions) that such
supplemental indenture has been duly authorized, executed and delivered by such
Domestic Wholly Owned Restricted Subsidiary or Restricted Subsidiary, as the
case may be, and constitutes a legal, valid, binding and enforceable obligation
of such Domestic Wholly Owned Restricted Subsidiary or Restricted Subsidiary, as
the case may be. Thereafter, such Domestic Wholly Owned Restricted Subsidiary or
Restricted Subsidiary, as the case may be, shall be a Guarantor for all purposes
of the Indenture. The Company may cause any other Restricted Subsidiary of the
Company to issue a Guarantee and become a Guarantor.
Payments for Consent. The Company will not, and will not cause or permit
any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Senior Notes for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of the Indenture, the Senior Notes or the
Guarantees unless such consideration is offered to be paid to all Holders of the
Senior Notes who so consent, waive or agree to amend in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement.
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Conduct of Business. The Company and its Restricted Subsidiaries will not
engage in any businesses which are not the same, similar, reasonably related,
ancillary or complementary to the businesses in which the Company and its
Restricted Subsidiaries are engaged on the Issue Date.
Reports to Holders. The Indenture provides that the Company will deliver to
the Trustee within 15 days after the filing of the same with the Commission,
copies of the quarterly and annual reports and of the information, documents and
other reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. The Indenture further
provides that, notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, following the
effectiveness of the Exchange Offer Registration Statement, the Company will
file with the Commission, to the extent permitted, and provide the Trustee and
Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15 (d) of the Exchange Act. The Company
will also comply with the other provisions of TIA sec. 314(a). Prior to the
effectiveness of the Exchange Offer Registration Statement, the Company will
provide upon request from Holders of the Senior Notes or prospective holders the
information required by Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(i) the failure to pay interest on any Senior Notes when the same
becomes due and payable and the default continues for a period of 30 days;
(ii) the failure to pay the principal on any Senior Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Senior Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);
(iii) a default in the observance or performance of any other covenant
or agreement contained in the Indenture which default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Senior Notes (except in the case of a default with respect to the "Merger,
Consolidation and Sale of Assets" covenant, which will constitute an Event
of Default with such notice requirement but without such passage of time
requirement);
(iv) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness for borrowed money of the Company or any Restricted
Subsidiary of the Company and such failure continues for a period of 20
days or more, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise
cured within 20 days of receipt by the Company or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal
amount of such Indebtedness, together with the principal amount of any
other such Indebtedness in default for failure to pay principal at final
stated maturity or which has been accelerated, in each case with respect to
which the 20-day period described above has passed, aggregates $5.0 million
or more at any time;
(v) one or more judgments for the payment of money in an aggregate
amount in excess of $5.0 million shall have been rendered against the
Company or any of its Restricted Subsidiaries and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such
judgment or judgments become final and nonappealable;
(vi) certain events of bankruptcy affecting the Company or any of its
Significant Subsidiaries; or
(vii) any Guarantee ceases to be in full force and effect or any
Guarantee declared to be null and void and unenforceable or any Guarantee
is found to be invalid or any of the Guarantors denies its liability under
its Guarantee (other than by reason of release of a Guarantor in accordance
with the terms of the Indenture).
If an Event of Default (other than an Event of Default specified in clause
(vi) above with respect to the Company) shall occur and be continuing, the
Trustee or the Holders of at least 25% in principal amount of
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outstanding Senior Notes may declare the principal of and accrued interest on
all the Senior Notes to be due and payable by notice in writing to the Company
and the Trustee specifying the respective Event of Default and that it is a
"notice of acceleration", and the same shall become immediately due and payable.
If an Event of Default specified in clause (vi) above occurs with respect to the
Company and is continuing, then all unpaid principal of, and premium, if any,
and accrued and unpaid interest on all of the outstanding Senior Notes shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
The Indenture provides that, at any time after a declaration of
acceleration with respect to the Senior Notes as described in the preceding
paragraph, the Holders of a majority in principal amount of the outstanding
Senior Notes may, on behalf of the Holders of all of the Senior Notes, rescind
and cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (vi) of the description above
of Events of Default, the Trustee shall have received an officers' certificate
and an opinion of counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
The Holders of a majority in principal amount of the Senior Notes may waive
any existing Default or Event of Default under the Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Senior Notes.
Holders of the Senior Notes may not enforce the Indenture or the Senior
Notes except as provided in the Indenture and under the TIA. Subject to the
provisions of the Indenture relating to the duties of the Trustee, the Trustee
is under no obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the Holders, unless such
Holders have offered to the Trustee reasonable indemnity. Subject to all
provisions of the Indenture and applicable law, the Holders of a majority in
aggregate principal amount of the then outstanding Senior Notes have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
Under the Indenture, the Company is required to provide an officers'
certificate to the Trustee promptly upon any such officer obtaining knowledge of
any Default or Event of Default (provided that such officers shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have its
obligations discharged with respect to the outstanding Senior Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the outstanding
Senior Notes, except for (i) the rights of Holders to receive payments in
respect of the principal of, premium, if any, and interest on the Senior Notes
when such payments are due, (ii) the Company's obligations with respect to the
Senior Notes concerning issuing temporary Senior Notes, registration of Senior
Notes, mutilated, destroyed, lost or stolen Senior Notes and the maintenance of
an office or agency for payments, (iii) the rights, powers, trust, duties and
immunities of the Trustee and the Company's obligations in connection therewith
and (iv) the Legal Defeasance provisions of the Indenture. In addition, the
Company may, at its option and at any time, elect to have the obligations of the
Company released with respect to certain covenants that are described in the
Indenture ("Covenant Defeasance") and thereafter any omission to comply with
such obligations shall not constitute a Default or Event of Default with respect
to the Senior Notes. In the event Covenant Defeasance occurs, certain events
(not including non-payment, bankruptcy, receivership, reorgani-
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zation and insolvency events) described under "Events of Default" will no longer
constitute an Event of Default with respect to the Senior Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders cash in U.S. dollars, non-callable U.S. government obligations,
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the Senior Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be; (ii) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to
the Trustee confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred; (iii) in
the case of Covenant Defeasance, the Company shall have delivered to the Trustee
an opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be continuing on the
date of such deposit (other than a Default or Event of Default under the
Indenture resulting from the incurrence of Indebtedness, all or a portion of
which will be used to defease the Senior Notes concurrently with such
incurrence); (v) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under the Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Company shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; (vii) the Company shall have delivered to the Trustee an
officers' certificate and an opinion of counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with; (viii) the Company shall have
delivered to the Trustee an opinion of counsel to the effect that assuming no
intervening bankruptcy or insolvency of the Company between the date of deposit
and the 91st day following the date of deposit and that no Holder is an insider
of the Company, after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; and (ix)
certain other customary conditions precedent are satisfied. Notwithstanding the
foregoing, the Opinion of Counsel required by clause (ii) above with respect to
a Legal Defeasance need not be delivered if all Senior Notes not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the maturity date within one year or (z) are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Senior Notes, as expressly provided for in the Indenture) as to all outstanding
Senior Notes when (i) either (a) all the Senior Notes theretofore authenticated
and delivered (except lost, stolen or destroyed Senior Notes which have been
replaced or paid and Senior Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all Senior Notes not theretofore delivered to
the Trustee for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Senior
Notes not theretofore
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delivered to the Trustee for cancellation, for principal of, premium, if any,
and interest on the Senior Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be; (ii)
the Company has paid all other sums payable under the Indenture by the Company;
and (iii) the Company has delivered to the Trustee an officers' certificate and
an opinion of counsel stating that all conditions precedent under the Indenture
relating to the satisfaction and discharge of the Indenture have been complied
with.
MODIFICATION OF THE INDENTURE
From time to time, the Company and the Trustee, without the consent of the
Holders, may amend the Indenture for certain specified purposes, including
curing ambiguities, defects or inconsistencies, so long as such change does not,
in the opinion of the Trustee, adversely affect the rights of any of the Holders
in any material respect. In formulating its opinion on such matters, the Trustee
will be entitled to rely on such evidence as it deems appropriate, including,
without limitation, solely on an opinion of counsel. Other modifications and
amendments of the Indenture may be made with the consent of the Holders of a
majority in principal amount of the then outstanding Senior Notes issued under
the Indenture, except that, without the consent of each Holder affected thereby,
no amendment may: (i) reduce the amount of Senior Notes whose Holders must
consent, to an amendment; (ii) reduce the rate of or change or have the effect
of changing the time for payment of interest, including defaulted interest, on
any Senior Notes; (iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Senior Notes, or change the date on which any
Senior Notes may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor, (iv) make any Senior Notes payable in
money other than that stated in the Senior Notes; (v) make any change in
provisions of the Indenture protecting the right of each Holder to receive
payment of principal of and interest on such Senior Note on or after the due
date thereof or to bring suit to enforce such payment, or permitting Holders of
a majority in principal amount of Senior Notes to waive Defaults or Events of
Default; (vi) amend, change or modify in any material respect the obligation of
the Company to make and consummate a Change of Control Offer in the event of a
Change of Control or make and consummate a Net Proceeds Offer with respect to
any Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto after a Change of Control has occurred or the
subject Asset Sale has been consummated; (vii) modify or change any provision of
the Indenture or the related definitions affecting the ranking of the Senior
Notes or a Guarantee in a manner which adversely affects the Holders in any
material respect; (viii) release any Guarantor from any of its obligations under
its Guarantee or the Indenture otherwise than in accordance with the terms of
the Indenture; or (ix) modify the provisions of "Certain Covenants -- Payments
for Consent" in any manner adverse to a Holder of Senior Notes.
GOVERNING LAW
The Indenture provides that it and the Senior Notes, Guarantees and the
Holdings Guarantee will be governed by, and construed in accordance with, the
laws of the State of New York but without giving effect to applicable principles
of conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the existence of an Event of Default, the Trustee will
exercise such rights and powers vested in it by the Indenture, and use the same
degree of care and skill in its exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
The Indenture and the provisions of the TIA contain certain limitations on
the rights of the Trustee, should it become a creditor of the Company, to obtain
payments of claims in certain cases or to realize on certain property received
in respect of any such claim as security or otherwise. Subject to the TIA, the
Trustee will be permitted to engage in other transactions; provided that if the
Trustee acquires any conflicting interest as described in the TIA, it must
eliminate such conflict or resign.
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CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the applicable document for the full definition
of all such terms, as well as any other terms used herein for which no
definition is provided.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with the Company or any of
its Subsidiaries or assumed in connection with the acquisition of assets from
such Person and in each case not incurred by such Person in connection with, or
in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The term
"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; and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprise any division or line of business of
such Person or any other properties or assets of such Person other than in the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Restricted Subsidiary of the Company of
(a) any Capital Stock of any Restricted Subsidiary of the Company; or (b) any
other property or assets of the Company or any Restricted Subsidiary of the
Company other than in the ordinary course of business; provided, however, that
Asset Sales shall not include (i) a transaction or series of related
transactions for which the Company or its Restricted Subsidiaries receive
aggregate consideration of less than $1.0 million, (ii) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted under "Merger, Consolidation and Sale of
Assets" or any disposition that constitutes a Change of Control, (iii) the
licensing of intellectual property, (iv) disposals or replacements of obsolete,
uneconomical, negligible, surplus or worn out property, (v) the sale, lease,
conveyance, disposition or other transfer by the Company or any Restricted
Subsidiary of the Company of assets or property in connection with Restricted
Payments permitted under the "Limitation on Restricted Payments" covenant; and
(vi) any disposition of up to three restaurants owned by the Company as of the
Issue Date pursuant to a Sale and Lease Back Transaction involving such
properties.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock,
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including each class of Common Stock and preferred stock of such Person and (ii)
with respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) the sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group"), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of the Indenture) other than
to the Permitted Holders; (ii) the approval by the holders of Capital Stock of
the Company of any plan or proposal for the liquidation or dissolution of the
Company (whether or not otherwise in compliance with the provisions of the
Indenture); (iii) any Person or Group (other than the Permitted Holders) shall
become the owner, directly or indirectly, beneficially, of shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Capital Stock of the Company or Holdings; or (iv) the first day
on which a majority of the members of the Board of Directors of the Company or
Holdings during the two year period immediately preceding such date are not
Continuing Directors. Notwithstanding anything to the contrary contained in the
foregoing, a "Change of Control" shall not be deemed to occur upon consummation
of (A) the Recapitalization, (B) the merger of the Company with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
jurisdiction or (C) any transaction described in clause (i) of the immediately
preceding sentence if, after giving effect to such transaction, no Person or
Group (other than the Permitted Holders) shall beneficially own, directly or
indirectly, shares of Capital Stock representing 50% or more of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of
the Company or Holdings, as the case may be.
Clause (i) of the definition of Change of Control includes a phrase
relating to the sale, lease, transfer, conveyance or other disposition of "all
or substantially all" of the assets of the Company and its Restricted
Subsidiaries taken as a whole. Although there is a developing body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of Senior Notes to require the Company to repurchase such Senior Notes as
a result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of the Company and its Restricted Subsidiaries taken as a
whole to another Person or group may be uncertain.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Income and (ii) to the
extent Consolidated Net Income has been
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reduced thereby, (A) all income taxes and foreign withholding taxes of such
Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period, (B) Consolidated Interest Expense, (C) Consolidated Non-cash
Charges, (D) an amount equal to any extraordinary loss or loss realized in
connection with an asset sale and (E) for any fiscal year of the Company
commencing on or after 2000; pre-opening expenses relating to the opening of
restaurants not to exceed $3.0 million in any one fiscal year less, to the
extent Consolidated Net Income has been increased thereby, any non-cash items
increasing Consolidated Net Income for such period, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in accordance
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Restricted Subsidiaries (including any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (2) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the amount of all dividend payments on any series of preferred stock of
such Person (other than dividends paid in Qualified Capital Stock paid, accrued
or scheduled to be paid or accrued during such period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount and (b) the net costs under
Interest Swap Obligations; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance
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with GAAP but, in each case of clauses (i) and (ii) excluding any amortization
or write-off of deferred financing costs.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom (a) after-tax gains
and losses from Asset Sales (without giving effect to the proviso therein) or
abandonments or reserves relating thereto, (b) after-tax items classified as
extraordinary or nonrecurring gains and losses, (c) the net income or loss of
any Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person, (d) the net income (but not loss) of any Restricted Subsidiary
of the referent Person to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by a contract, operation of law or otherwise, (e) the net loss of any Person
other than a Restricted Subsidiary of the Company, (f) the net income of any
Person, other than a Restricted Subsidiary of the referent Person, except to the
extent of cash dividends or distributions paid to the referent Person or to a
Wholly Owned Restricted Subsidiary of the referent Person by such Person, (g)
income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such
operations were classified as discontinued), (h) in the case of a successor to
the referent Person by consolidation or merger or as a transferee of the
referent Person's assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets, (i) non-cash, non-recurring
charges reducing Consolidated Net Income (excluding any such non-cash charge to
the extent it represents an accrual of or reserve for cash charges in any future
period or amortization of prepaid cash expense that was paid in a prior period
not included in the calculation), (j) non-cash compensation charges, including
any arising from stock options, (k) gains and losses due solely to fluctuations
in currency values and the related tax effects according to GAAP, (l) expenses
related to the Recapitalization, (m) any expense resulting from any amortization
or write-off of deferred financing costs and (n) expenses related to
amortization of goodwill resulting from purchase accounting not to exceed $1.0
million in any four fiscal quarter period.
"Consolidated Non-cash Charges" means, with respect to any Person, for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve for cash charges for any future period).
"Consolidated Tangible Assets" means, with respect to any Person, as of any
date of determination, the total assets, less goodwill, deferred financing costs
and other intangibles and less accumulated amortization, shown on the most
recent balance sheet of such Person, determined on a consolidated basis in
accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company or Holdings, as the case may be, who
(i) was a member of such Board of Directors on the first day of the two-year
period immediately preceding such date of determination or (ii) was nominated
for election or elected to such Board of Directors with, or whose election to
such Board of Directors was approved by, the affirmative vote of a majority of
the Continuing Directors who were members of such Board of Directors at the time
of such nomination or election or (iii) is any designee of the Principal or its
Affiliates or was nominated by the Principal or its Affiliates or any designees
of the Principal or its Affiliates on the Board of Directors.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
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"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable (other than upon the occurrence of a Change of Control),
pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole
option of the holder thereof on or prior to the final maturity date of the
Senior Notes.
"Domestic Wholly Owned Restricted Subsidiary" means a wholly owned
Restricted Subsidiary incorporated or otherwise organized under the laws of the
United States, any state thereof or any territory or possession of the United
States.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
Except as otherwise set forth herein, all ratios and computations based on GAAP
contained in the Senior Indenture shall be computed in conformity with GAAP
applied on a consistent basis.
"Holdings" means Romacorp Restaurant Holdings, Inc.
"Indebtedness" means with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all Capitalized Lease Obligations of such Person, (iv) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business), (v) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) guarantees and other contingent
obligations of such Person in respect of Indebtedness referred to in clauses (i)
through (v) above and clause (viii) below, (vii) all obligations of any other
Person of the type referred to in clauses (i) through (vi) which are secured by
any lien on any property or asset of such Person, the amount of such obligation
being deemed to be the lesser of the fair market value of such property or asset
or the amount of the obligation so secured, (viii) all obligations under
currency agreements and interest swap agreements of such Person and (ix) all
Disqualified Capital Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed repurchase
price, but excluding accrued dividends, if any. For purposes hereof, the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the Board of
Directors of the issuer of such Disqualified Capital Stock.
"Independent Financial Advisor" means a firm (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic
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payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of the "Limitation on
Restricted Payments" covenant, (i) "Investment" shall include and be valued at
the fair market value of the net assets of any Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary and
shall exclude the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts shall be included in Consolidated Net Income
to the extent such amounts have so reduced the amount of any Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, 100% of the outstanding Common
Stock of such Restricted Subsidiary, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Senior Notes.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Restricted Subsidiaries from such Asset Sale net of
(a) out-of-pocket expenses and fees relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees and sales
commissions), (b) taxes paid or payable after taking into account any reduction
in consolidated tax liability due to available tax credits or deductions and any
tax sharing arrangements, (c) repayment of Indebtedness that is required to be
repaid in connection with such Asset Sale and (d) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, postclosing
adjustments, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.
"New Revolving Credit Facility" means the Credit Agreement dated as of the
Issue Date, among the Company, Holdings, the lenders party thereto in their
capacities as lenders thereunder and The Provident Bank, as agent, together with
the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without
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limitation, increasing the amount of available borrowings thereunder or adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Permitted Holders" means (i) the Principal, (ii) Eric D. Bommer, David S.
Lobel and John F. McCormack and (iii) any Person, a majority of the voting power
represented by the issued and outstanding Capital Stock of which is beneficially
owned, directly or indirectly, by one or more Persons identified in clauses (i)
and (ii) of this definition.
"Permitted Indebtedness" means, without duplication, each of the following:
(i) Indebtedness under the Notes issued in the Offering and the
Exchange Notes issued in exchange therefor;
(ii) Indebtedness incurred pursuant to the New Revolving Credit
Facility in an aggregate principal amount at any time outstanding not to
exceed $20.0 million;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company or any of its Restricted
Subsidiaries covering Indebtedness of the Company or any of its Restricted
Subsidiaries; provided, however, that such Interest Swap Obligations are
entered into to protect the Company and its Restricted Subsidiaries from
fluctuations in interest rates on Indebtedness incurred in accordance with
the Indenture to the extent the notional principal amount of such Interest
Swap Obligation does not exceed the principal amount of the Indebtedness to
which such Interest Swap Obligation relates;
(v) Indebtedness under Currency Agreements; provided that in the case
of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly Owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a Wholly
Owned Restricted Subsidiary of the Company, in each case subject to no Lien
(other than Liens permitted under the Senior Indenture) held by a Person
other than the Company or a Wholly Owned Restricted Subsidiary of the
Company; provided that if as of any date any Person other than the Company
or a Wholly Owned Restricted Subsidiary of the Company owns or holds any
such Indebtedness or holds a Lien (other than Liens permitted under the
Senior Indenture) in respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company: provided that (a) any
Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of
the Company is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Indenture and the Senior Notes and
(b) if as of any date any Person other than a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or any Person
holds a Lien (other than Liens permitted under the Indenture) in respect of
such Indebtedness, such date shall be deemed the incurrence of Indebtedness
not constituting Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against
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insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within five business days of
incurrence;
(ix) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;
(x) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
not to exceed the greater of $10.0 million and 5% of Consolidated Tangible
Assets of the Company at any one time outstanding;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary of the Company in a principal
amount not to exceed the gross proceeds actually received by the Company or
any of its Restricted Subsidiaries in connection with such disposition;
(xii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
of the Company in the ordinary course of business;
(xiii) guarantees by the Company and the Guarantors of each other's
Indebtedness; provided that such Indebtedness is permitted to be incurred
under the Indenture;
(xiv) Refinancing Indebtedness; and
(xv) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $7.0 million at
any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly Owned Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary of the Company, (ii) Investments in the Company by any
Restricted Subsidiary of the Company; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Senior Notes and the Indenture; (iii)
investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes not in excess of $1.0 million
at any one time outstanding; (v) Currency Agreements and Interest Swap
Obligations entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with the
Indenture; (vi) Investments not to exceed $5.0 million at any one time
outstanding; (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (viii)
Investments made by the Company or its Restricted Subsidiaries as a result of
consideration received in connection with an Asset Sale made in compliance with
the "Limitation on Asset Sales" covenant; (ix) accounts receivable created or
acquired in the ordinary course of business; (x) guarantees by the Company of
Indebtedness otherwise permitted to be incurred by Restricted Subsidiaries of
the Company under the Indenture; and (xi) Investments the payment for which
consists exclusively of Qualified Capital Stock of the Company.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for
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sums not yet delinquent or being contested in good faith, if such reserve
or other appropriate provision, if any, as shall be required by GAAP shall
have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of the real property not interfering in
any material respect with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(vi) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(vii) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(viii) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(ix) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(x) Liens securing (a) Capitalized Lease Obligations permitted
pursuant to clause (x) of the definition of "Permitted Indebtedness" and
(b) Liens securing Purchase Money Indebtedness (including by means of a
Capitalized Lease Obligation) incurred in accordance with the Indenture;
provided, however, that in the case of Purchase Money Indebtedness (A) the
Indebtedness shall not exceed the cost of such property or assets and shall
not be secured by any property or assets of the Company or any Restricted
Subsidiary of the Company other than the property and assets so acquired or
constructed and (B) the Lien securing such Indebtedness shall be created
within 180 days of such acquisition or construction or, in the case of a
refinancing of any Purchase Money Indebtedness, within 180 days of such
refinancing;
(xi) Liens securing Indebtedness under Currency Agreements;
(xii) Liens securing Acquired Indebtedness incurred in accordance with
the "Limitation on Incurrence of Additional Indebtedness" covenant;
provided that (A) such Liens secured such Acquired Indebtedness at the time
of and prior to the incurrence of such Acquired Indebtedness by the Company
or a Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
(B) such Liens do not extend to or cover any property or assets of the
Company or of any of its Restricted Subsidiaries other than the property or
assets that secured the Acquired Indebtedness prior to the time such
Indebtedness became Acquired Indebtedness of the Company or a Restricted
Subsidiary of the Company and are no more favorable to the lienholders than
those securing the Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company;
(xiii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not in the aggregate exceed $3.0 million at any one
time outstanding;
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(xiv) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries;
(xv) Liens arising from filing Uniform Commercial Code financing
statements regarding leases (other than Capitalized Lease Obligations);
(xvi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods;
(xvii) Liens existing on the Issue Date, together with any Liens
securing Refinancing Indebtedness incurred in order to refinance the
Indebtedness secured by Liens existing on the Issue Date; provided that the
Liens securing the Refinancing Indebtedness shall not extend to property
other than that pledged under the Liens securing the Indebtedness being
refinanced;
(xviii) Liens securing Indebtedness incurred pursuant to a Sale and
Leaseback Transaction involving up to three restaurants owned by the
Company as of the Issue Date; and
(xix) Liens securing Indebtedness under the New Revolving Credit
Facility.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"preferred stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Principal" means Sentinel Inc.
"Purchase Money Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries incurred for the purpose of financing all or any part of
the purchase price, or the cost of installation, construction or improvement, of
property (real or personal) or equipment (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets).
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of (A) for purposes of clause (xv) of the
definition of Permitted Indebtedness, Indebtedness incurred in accordance with
the "Limitation on Incurrence of Additional Indebtedness" covenant (other than
pursuant to clause (ii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii),
(xiii), or (xv) of the definition of Permitted Indebtedness) or (B) for any
other purpose, Indebtedness issued in accordance with the "Limitation on
Incurrence of Additional Indebtedness" covenant, in each case that does not (1)
result in an increase in the aggregate principal amount of Indebtedness of such
Person as of the date of such proposed Refinancing (plus the amount of any
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
in connection with such Refinancing) except to the extent such increase is
otherwise permitted to be incurred under the Indenture or (2) create
Indebtedness with a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced; provided
that (x) if such Indebtedness being Refinanced is Indebtedness solely of the
Company or a Guarantor, then such Refinancing Indebtedness shall be Indebtedness
solely of the Company and/or one or more Guarantors and (y) if such Indebtedness
being Refinanced is subordinate or junior to the Senior Notes or a Guarantee,
then such Refinancing Indebtedness shall be subordinate or junior to the Senior
Notes or such Guarantee at least to the same extent and in the same manner as
the Indebtedness being Refinanced.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
which at the time of determination is not an Unrestricted Subsidiary.
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"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of any property, whether owned
by the Company or any Restricted Subsidiary at the Issue Date or later acquired,
which has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such Property.
"Significant Subsidiary", with respect to any Person, means any Restricted
Subsidiary of such Person that satisfies the criteria for a "significant
subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the Securities
Act.
"Subsidiary", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such
Person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Subsidiary (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided that (x) the Company certifies to the
Senior Trustee that such designation complies with the "Limitation on Restricted
Payments" covenant and (y) each Subsidiary to be so designated and each of its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary only if (x) immediately after giving effect to
such designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with the
"Limitation on Incurrence of Additional Indebtedness" covenant and (y)
immediately before and immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an officers' certificate certifying that such designation
complied with the foregoing provisions.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities (other
than in the case of a foreign Restricted Subsidiary, directors' qualifying
shares or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Notes were originally sold by the Company on June 26, 1998 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Notes to qualified institutional buyers in reliance on
Rule 144A under the Securities Act and to a limited number of institutional
accredited investors that agreed to comply with certain transfer restrictions
and other conditions. As a condition to the Purchase Agreement, the Company
entered into the Registration Rights Agreement with the Initial Purchasers
pursuant to which the Company has agreed to: (i) within 60 days after the Issue
Date (the "Filing Date"), file a registration statement ("the Exchange Offer
Registration Statement") with respect to registered offers (the "Exchange
Offer") to exchange the Notes for the Exchange Notes, which Exchange Notes will
have terms substantially identical in all material respects to the Notes,
(except that the Exchange Notes will not contain terms with respect to transfer
restrictions) and (ii) use its best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act within
150 days after the Issue Date. Upon the Exchange Offer Registration Statement
being declared effective, the Company will offer the Exchange Notes in exchange
for surrender of the Notes. The Company will keep the Exchange Offer open for
not less than 20 business days (or longer if required by applicable law) after
the date notice of the Exchange Offer is mailed to the Holders. For each of the
Notes surrendered to the Company pursuant to the Exchange Offer, the Holder who
surrendered such Notes will receive the Exchange Notes having a principal amount
equal to that of the surrendered Notes. Interest on each Exchange Note will
accrue (A) from the later of (i) the last interest payment date on which
interest was paid on the Note surrendered in exchange therefor, or (ii) if the
Note is surrendered for exchange on a date in a period which includes the record
date for an interest payment date to occur on or after the date of such exchange
and as to which interest will be paid, the date of such interest payment date or
(B) if no interest has been paid on the Notes, from the Issue Date.
Under existing interpretations of the Commission contained in several
no-action letters to third parties, the Exchange Notes will be freely
transferable by holders thereof (other than affiliates of the Issuers) after the
Exchange Offer without further registration under the Securities Act; provided,
however, that each Holder that wishes to exchange its Notes for Exchange Notes
will be required to represent (i) that any Exchange Notes to be received by it
will be acquired in the ordinary course of its business, (ii) that at the time
of the commencement of the Exchange Offer it has no arrangement or understanding
with any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes in violation of the Securities Act, (iii)
that it is not an "affiliate" (as defined in Rule 405 promulgated under the
Securities Act) of the Issuers, (iv) if such Holder is not a broker-dealer, that
it is not engaged in, and does not intend to engage in, the distribution of
Exchange Notes and (v) if such Holder is a broker-dealer (a "Participating
Broker-Dealer") that will receive Exchange Notes for its own account in exchange
for Notes that were acquired as a result of market-making or other trading
activities, that it will deliver a prospectus in connection with any resale of
such Exchange Notes. Upon written notice within 30 days following the completion
of the Exchange Offers that a Participating Broker-Dealer has received Exchange
Notes in the Exchange Offer, the Issuers will agree to make available, during
the period required by the Securities Act, a prospectus meeting the requirements
of the Securities Act for use by Participating Broker-Dealers and other persons,
if any, with similar prospectus delivery requirements for use in connection with
any resale of Exchange Notes.
If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the Commission, the Company is not permitted to
effect the Exchange Offer, (ii) the Exchange Offer is not consummated within 210
days of the Issue Date, (iii) in certain circumstances, certain holders of
unregistered Exchange Notes so request, or (iv) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange Notes
on the date of the exchange that may be sold without restriction under state and
federal securities laws (other than due solely to the status of such Holder as
an affiliate of the Company within the meaning of the Securities Act), then in
each case, the Issuers will (x) promptly deliver to the Holders and the Trustee
written notice thereof and (y) at their sole expense, (a) as promptly as
practicable, file shelf registration statements covering resales of the Notes
(the "Shelf Registration State-
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ments"), (b) use their best efforts to cause the Shelf Registration Statements
to be declared effective under the Securities Act and (c) use their best efforts
to keep effective the Shelf Registration Statements until the earlier of two
years after the Issue Date or such time as all of the applicable Notes have been
sold thereunder. The Issuers will, in the event that Shelf Registration
Statements are filed, provide to each Holder copies of the prospectus that is a
part of the Shelf Registration Statement, notify each such Holder when the Shelf
Registration Statement for the Notes has become effective and take certain other
actions as are required to permit unrestricted resales of the Notes. A Holder
that sells Notes pursuant to the Shelf Registration Statement will be required
to be named as a selling security holder in the related prospectus and to
deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement that are
applicable to such a Holder (including certain indemnification rights and
obligations).
If the Issuers fail to comply with the above provisions or if the Exchange
Offer Registration Statement or the Shelf Registration Statement fails to become
effective, then, as liquidated damages, additional interest (the "Additional
Interest") pursuant to provisions of the Notes, shall become payable in respect
of the Notes as follows:
if (a) neither an Exchange Offer Registration Statement nor a Shelf
Registration Statement is filed with the Commission on or prior to 60 days
after the Issue Date or (b) notwithstanding that the Issuers have
consummated or will consummate an Exchange Offer, the Issuers are required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by the Registration
Rights Agreement, then commencing on the day after either such required
filing date, Additional Interest shall accrue on the principal amount of
the Notes at a rate of .25% per annum for the first 90 days immediately
following each such filing date, such Additional Interest increasing by an
additional .25% per annum at the beginning of each subsequent 90-day
period; or
if (a) neither an Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the Commission on or prior
to 150 days after the Issue Date or (b) notwithstanding that the Issuers
have consummated or will consummate an Exchange Offer, the Issuers are
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the
90th day following the date such Shelf Registration Statement was filed,
then, commencing on the day after the 150th day in the case of (a) above,
or the day after the 90th day in the case of (b) above, Additional Interest
shall accrue on the principal amount of the Notes at a rate of .25% per
annum for the first 90 days immediately following each such filing date,
such Additional Interest increasing by an additional .25% per annum at the
beginning of each subsequent 90-day period; or
if (a) the Issuers have not exchanged the applicable Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 45th day after the date on which the Exchange Offer
Registration Statement was declared effective or (b) if applicable, a Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
second anniversary of the Issue Date (other than after such time as all of
the applicable Notes have been disposed of thereunder), then Additional
Interest shall accrue on the principal amount of the Notes at a rate of
.25% per annum for the first 90 days commencing on (x) the 46th day after
such effective date, in the case of (a) above, or (y) the day such Shelf
Registration Statement ceases to be effective in the case of (b) above,
such Additional Interest increasing by an additional .25% per annum at the
beginning of each subsequent 90-day period;
provided, however, that the rate of Additional Interest that shall accrue on the
Notes may not exceed in the aggregate 1.0% per annum; provided, further,
however, that (1) upon the filing of the applicable Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the applicable Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (ii) above),
or (3) upon the exchange of applicable Exchange Notes for all applicable Notes
tendered (in the case of clause (iii) (a) above), or upon the effectiveness of a
Shelf Registration Statement which had ceased to remain effective (in the case
of clause (iii) (b) above), Additional Interest on
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the applicable Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in cash, on the same original interest payment dates
as the Notes. The amount of Additional Interest will be determined by
multiplying the applicable rate of Additional Interest by the principal amount
of the Senior Notes multiplied by a fraction, the numerator of which is the
number of days such rate of Additional Interest was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
The Issuers (i) shall make available a prospectus meeting the requirements
of the Securities Act to any broker-dealer for use in connection with any resale
of any such Exchange Notes and (ii) shall pay all expenses incident to the
Exchange Offer (including the expense of one counsel to the Holders covered
thereby) and will indemnify certain holders of the Notes (including any
broker-dealer) against certain liabilities, including liabilities under the
Securities Act. A broker-dealer which delivers such a prospectus to purchasers
in connection with such resales will be subject to certain of the civil
liability provisions under the Securities Act and will be bound by the
provisions of the Registration Rights Agreement (including certain
indemnification rights and obligations).
Each holder of Notes who wishes to exchange such Notes for Exchange Notes
in the Exchange Offer will be required to make representations in the Letter of
Transmittal that (a) it is not an "affiliate" of the Issuers (within the meaning
of Rule 405 of the Securities Act); (b) it is not engaged in and does not intend
to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer; (c) it is acquiring the Exchange Notes in its ordinary course of
business; and (d) if it is a Participating Broker-Dealer holding Notes acquired
for its own account as a result of market-making activities or other trading
activities, it acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of Exchange
Notes received in respect of such Exchange Notes pursuant to the Exchange Offer.
The Commission has taken the position and the Issuers believe that Participating
Broker-Dealers may fulfill their prospectus delivery requirements with respect
to the Exchange Notes (other than a resale of an unsold allotment from the
original sale of the Notes) with the prospectus contained in the Exchange Offer
Registration Statement. Under the Exchange and Registration Rights Agreement,
the Issuers are required to allow Participating Broker-Dealers and other
persons, if any, subject to similar prospectus delivery requirements to use the
prospectus contained in the Exchange Offer Registration Statement in connection
with the resale of such Exchange Notes.
If the holder is a Participating Broker-Dealer, it will be required to
include a representation in such Participating Broker-Dealer's letter of
transmittal with respect to the Exchange Offer that such Participating
Broker-Dealer has not entered into any arrangement or understanding with the
Company or any affiliate of the Issuers to distribute the Exchange Notes.
Holders of the Notes will be required to make certain representations to
the Issuers (as described above) in order to participate in the Exchange Offer
and will be required to deliver information to be used in connection with the
Shelf Registration Statement in order to have their Notes included in the Shelf
Registration Statement and benefit from the provisions regarding liquidated
damages set forth in the preceding paragraphs. A holder who sells Notes pursuant
to the Shelf Registration Statement generally will be required to be named as a
selling securityholder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement which are applicable to such a
holder (including certain indemnification obligations).
For so long as the Notes are outstanding, the Issuers will continue to
provide to holders of the Notes and to prospective purchasers of the Notes the
information required by Rule 144A(d)(4) under the Securities Act.
The foregoing description of the Registration Rights Agreement contains a
discussion of all material elements thereof, but does not purport to be complete
and is qualified in its entirety by reference to all
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provisions of the Registration Rights Agreement. The Issuers will provide a copy
of the Registration Rights Agreement to holders of Notes identified to the
Issuers by an Initial Purchaser upon request.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Issuers will accept any and all Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of Exchange
Notes in exchange for each $1,000 principal amount of outstanding Notes accepted
in the Exchange Offer. Holders may tender some or all of their Notes pursuant to
the Exchange Offer. However, Notes may be tendered only in integral multiples of
$1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Notes except that: (i) the Exchange Notes bear a Series B designation and
a different CUSIP Number from the Notes; (ii) the Exchange Notes have been
registered under the Securities Act and hence will not bear legends restricting
the transfer thereof; and (iii) the holders of the Exchange Notes will not be
entitled to certain rights under the Registration Rights Agreement, including
the provisions providing for an increase in the interest rate on the Notes in
certain circumstances relating to the timing of the Exchange Offer, all of which
rights will terminate when the Exchange Offer is terminated. The Exchange Notes
will evidence the same debt as the Notes and will be entitled to the benefits of
the Indenture.
As of the date of this Prospectus, $75,000,000 aggregate principal amount
of Notes were outstanding. The Issuers have fixed the close of business on
, 1998 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
The Issuers intend to conduct the Exchange Offer in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
The Issuers shall be deemed to have accepted validly tendered Notes when,
as and if the Issuers have given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering holders for the
purpose of receiving the Exchange Notes from the Issuers.
If any tendered Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Notes will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.
Holders who tender Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Notes pursuant to
the Exchange Offer. The Issuers will pay all charges and expenses, other than
transfer taxes in certain circumstances, in connection with the Exchange Offer.
See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Issuers, in their sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended. Notwithstanding the
foregoing, the Issuers will not extend the Expiration Date beyond ,
1998.
In order to extend the Exchange Offer, the Issuers will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders an announcement thereof, each prior to 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date.
The Issuers reserve the right, in their sole discretion, (i) to delay
accepting any Notes, to extend the Exchange Offer or to terminate the Exchange
Offer if any of the conditions set forth below under "-- Conditions" shall not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner. Any
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such delay in acceptance, extension, termination or amendment will be followed
as promptly as practicable by oral or written notice thereof to the registered
holders.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest from their date of issuance. Holders
of Notes that are accepted for exchange will receive, in cash, accrued interest
thereon to, but not including, the date of issuance of the Exchange Notes. Such
interest will be paid with the first interest payment on the Exchange Notes on
January 1, 1999. Interest on the Notes accepted for exchange will cease to
accrue upon issuance of the Exchange Notes.
Interest on the Exchange Notes is payable semi-annually on each January 1
and July 1, commencing on January 1, 1998.
PROCEDURES FOR TENDERING
Only a holder of Notes may tender such Notes in the Exchange Offer. To
tender in the Exchange Offer, a holder must complete, sign and date the Letter
of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed
if required by the Letter of Transmittal, and mail or otherwise deliver such
Letter of Transmittal or such facsimile, together with the Notes and any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. To be tendered effectively, the Notes, Letter of
Transmittal and other required documents must be completed and received by the
Exchange Agent at the address set forth below under "Exchange Agent" prior to
5:00 p.m., New York City time, on the Expiration Date. Delivery of the Notes may
be made by book-entry transfer in accordance with the procedures described
below. Confirmation of such book-entry transfer must be received by the Exchange
Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each holder will make to the
Issuers the representations set forth above in the eighth paragraph under the
heading "--Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Issuers will
constitute agreement between such holder and the Issuers in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE
HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE ISSUERS. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered holder promptly and instruct such registered
holder to tender on such beneficial owner's behalf. See "Instruction to
Registered Holder and/or Book-Entry Transfer Facility Participant from Owner"
included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a member firm of the
Medallion System (an "Eligible Institution").
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If the Letter of Transmittal is signed by a person other than the
registered holder of any Notes listed therein, such Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered holder
as such registered holder's name appears on such Notes with the signature
thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, offices of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Issuers of their authority to so act must be submitted with the Letter of
Transmittal.
The Issuers understand that the Exchange Agent will make a request promptly
after the date of this Prospectus to establish accounts with respect to the
Notes at the book-entry transfer facility, The Depository Trust Company (the
"Book-Entry Transfer Facility"), for the purpose of facilitating the Exchange
Offer, and subject to the establishment thereof, any financial institution that
is a participant in the Book-Entry Transfer Facility's system may make
book-entry delivery of Notes by causing such Book-Entry Transfer Facility to
transfer such Notes into the Exchange Agent's account with respect to the Notes
in accordance with the Book-Entry Transfer Facility's procedures for such
transfer. Although delivery of the Notes may be effected through book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility,
an appropriate Letter of Transmittal properly completed and duly executed with
any required signature guarantee and all other required documents must in each
case be transmitted to and received or confirmed by the Exchange Agent at its
address set forth below on or prior to the Expiration Date, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under such procedures. Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.
The Depositary and DTC have confirmed that the Exchange Offer is eligible
for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC
participants may electronically transmit their acceptance of the Exchange Offer
by causing DTC to transfer Notes to the Depositary in accordance with DTC's ATOP
procedures for transfer. DTC will then send an Agent's Message to the
Depositary.
The term "Agent's Message" means a message transmitted by DTC, received by
the Depositary and forming part of the confirmation of a book-entry transfer,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering Notes which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Issuers may enforce such
agreement against such participant. In the case of an Agent's Message relating
to guaranteed delivery, the term means a message transmitted by DTC and received
by the Depositary, which states that DTC has received an express acknowledgment
from the participant in DTC tendering Notes that such participant has received
and agrees to be bound by the Notice of Guaranteed Delivery.
Notwithstanding the foregoing, in order to validly tender in the Exchange
Offer with respect to Securities transferred pursuant to ATOP, a DTC participant
using ATOP must also properly complete and duly execute the applicable Letter of
Transmittal and deliver it to the Depositary. Pursuant to authority granted by
DTC, any DTC participant which has Notes credited to its DTC account at any time
(and thereby held of record by DTC's nominee) may directly provide a tender as
though it were the registered holder by so completing, executing and delivering
the applicable Letter of Transmittal to the Depositary. DELIVERY OF DOCUMENTS TO
DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Issuers in their sole discretion, which determination will be
final and binding. The Issuers reserve the absolute right to reject any and all
Notes not properly tendered or any Notes the Issuers' acceptance of which would,
in the opinion of counsel for the Issuers, be unlawful. The Issuers also reserve
the right in their sole discretion to waive any defects, irregularities or
conditions of tender as to particular Notes. The Issuers' interpretation of the
terms and conditions of the Exchange Offer (including the instructions in the
Letter of Transmittal) will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Notes must be
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<PAGE> 81
cured within such time as the Issuers shall determine. Although the Issuers
intend, to notify holders of defects or irregularities with respect to tenders
of Notes, neither the Issuers, the Exchange Agent nor any other person shall
incur any liability for failure to give such notification. Tenders of Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Notes received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering holders, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Notes and (i) whose Notes are not
immediately available, (ii) who cannot deliver their Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the Expiration
Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Notes and the principal amount of Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof) together with the certificate(s)
representing the Notes (or a confirmation of book-entry transfer of such
Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility), and any other documents required by the Letter of Transmittal
will be deposited by the Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (of
facsimile thereof), as well as the certificate(s) representing all tendered
Notes in proper form for transfer (or a confirmation of book-entry transfer
of such Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility), and all other documents required by the Letter of Transmittal
are received by the Exchange Agent upon five New York Stock Exchange
trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date. To
withdraw a tender of Notes in the Exchange Offer, a telegram, telex, letter or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the certificate number(s) and
principal amount of such Notes, or, in the case of Notes transferred by
book-entry transfer, the name and number of the account at the Book-Entry
Transfer Facility to be credited), (iii) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee with respect
to the Notes register the transfer of such Notes into the name of the person
withdrawing the tender and (iv) specify the name in which any such Notes are to
be registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Issuers, whose determination shall be final and binding on
all parties. Any Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no Exchange Notes will be issued
with respect thereto unless the Notes so withdrawn are validly retendered. Any
Notes which have been tendered but which are not accepted for exchange will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination
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of the Exchange Offer. Properly withdrawn Notes may be retendered by following
one of the procedures described above under "-- Procedures for Tendering" at any
time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange Exchange Notes for, any Notes,
and may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Issuers to proceed with the Exchange Offer or any material
adverse development has occurred in any existing action or proceeding with
respect to the Issuers or any of its subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the sole
judgment of the Issuers, might materially impair the ability of the Issuers
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Issuers; or
(c) any governmental approval has not been obtained, which approval
the Issuers shall, in their sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Issuers determine in their sole discretion that any of the
conditions are not satisfied, the Issuers may (i) refuse to accept any Notes and
return all tendered Notes to the tendering holders, (ii) extend the Exchange
Offer and retain all Notes tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of holders to withdraw such Notes (see
"-- Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Notes which have
not been withdrawn.
EXCHANGE AGENT
United States Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance, requests
for additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Delivery to an address other than as set forth above will not constitute a
valid delivery.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Issuers. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Issuers and its affiliates.
The Issuers have not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Issuers, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Issuers. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
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ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Notes, which is face value, as reflected in the Company's accounting records on
the date of exchange. Accordingly, no gain or loss for accounting purposes will
be recognized by the Company. The expenses of the Exchange Offer will be
expensed over the term of the Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Notes may be
resold only: (i) to the Issuers (upon redemption thereof or otherwise); (ii) so
long as the Notes are eligible for resale pursuant to Rule 144A, to a person
inside the United States whom the seller reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act in
a transaction meeting the requirements of Rule 144A, in accordance with Rule 144
under the Securities Act, or pursuant to another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel
reasonably acceptable to the Issuers); (iii) outside the United States to a
foreign person in a transaction meeting the requirements of Rule 904 under the
Securities Act; or (iv) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
RESALES OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that a holder or other person who receives Exchange Notes,
whether or not such person is the holder (other than a person that is an
"affiliate" of the Issuers within the meaning of Rule 405 under the Securities
Act) who receives Exchange Notes in exchange for Notes in the ordinary course of
business and who is not participating, does not intend to participate, and has
no arrangement or understanding with person to participate, in the distribution
of the Exchange Notes, will be allowed to resell the Exchange Notes to the
public without further registration under the Securities Act and without
delivering to the purchasers of the Exchange Notes a prospectus that satisfies
the requirements of Section 10 of the Securities Act. However, if any holder
acquires Exchange Notes in the Exchange Offer for the purpose of distributing or
participating in a distribution of the Exchange Notes, such holder cannot rely
on the position of the staff of the Commission enunciated in such no-action
letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Further, each Participating Broker-Dealer that receives
Exchange Notes for its own account in exchange for Notes, where such Notes were
acquired by such Participating Broker-Dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes.
As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent to
the Issuers in the Letter of Transmittal that (a) it is not an "affiliate" of
the Issuers (within the meaning of Rule 405 of the Securities Act); (b) it is
not engaged in and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the Exchange
Notes to be issued in the Exchange Offer; (c) it is acquiring the Exchange Notes
in its ordinary course of business; and (d) if it is a Participating
Broker-Dealer holding Notes acquired for its own account as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of Exchange Notes received in respect of such
Exchange Notes pursuant to the Exchange Offer. As indicated above, each
Participating Broker-Dealer that receives an Exchange Note for its own account
in exchange for Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. For a description of the
procedures for such resales by Participating Broker-Dealers, see "Plan of
Distribution."
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion (including the opinion of special counsel
described below) is based upon current provisions of the Internal Revenue Code
of 1986, as amended, applicable Treasury regulations, judicial authority and
administrative rulings and practice. There can be no assurance that the Internal
Revenue Service (the "Service") will not take a contrary view, and no ruling
from the Service has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to holders. Certain holders (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
may be subject to special rules not discussed below. The Issuers recommend that
each holder consult such holder's own tax advisor as to the particular tax
consequences of exchanging such holder's Notes for Exchange Notes, including the
applicability and effect of any state, local or foreign tax laws.
Kirkland & Ellis, special counsel to the Issuers, has advised the Issuers
that in its opinion, the exchange of the Notes for Exchange Notes pursuant to
the Exchange Offer will not be treated as an "exchange" for federal income tax
purposes because the Exchange Notes will not be considered to differ materially
in kind or extent from the Notes. Rather, the Exchange Notes received by a
holder will be treated as a continuation of the Notes in the hands of such
holder. As a result, there will be no federal income tax consequences to holders
exchanging Notes for Exchange Notes pursuant to the Exchange Offer.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of Exchange Notes received in respect of such Notes pursuant to the
Exchange Offer. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of Exchange Notes received in exchange for Notes where such Notes were acquired
as a result of market-making activities or other trading activities. The Issuers
have agreed that to make this Prospectus, as amended or supplemented, available
to any Participating Broker-Dealer for use in connection with any such resale.
In addition, until , 1998, all dealers effecting transactions in the
Exchange Notes may be required to deliver a prospectus.
The Issuers will not receive any proceeds from any sales of the Exchange
Notes by Participating Broker-Dealers. Exchange Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchaser or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such Exchange Notes. Any Participating Broker-Dealer that resells the
Exchange Notes that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of Exchange Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Issuers believe that a holder or other person who receives Exchange Notes,
whether or not such person is the holder (other than a person that is an
"affiliate" of the Issuers within the meaning of Rule 405 under the Securities
Act) who receives Exchange Notes in exchange for Notes in the ordinary course of
business and who is not participating, does not intend to participate, and
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has no arrangement or understanding with person to participate, in the
distribution of the Exchange Notes, will be allowed to resell the Exchange Notes
to the public without further registration under the Securities Act and without
delivering to the purchasers of the Exchange Notes a prospectus that satisfies
the requirements of Section 10 of the Securities Act. However, if any holder
acquires Exchange Notes in the Exchange Offer for the purpose of distributing or
participating in a distribution of the Exchange Notes, such holder cannot rely
on the position of the staff of the Commission enunciated in such no-action
letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction and such a secondary resale transaction
should be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K under the Securities Act, unless an exemption from registration
is otherwise available. Further, each Participating Broker-Dealer that receives
Exchange Notes for its own account in exchange for Notes, where such Notes were
acquired by such Participating Broker-Dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Issuers
have agreed to make this Prospectus available to any Participating Broker-Dealer
for use in connection with any such resale.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Exchange Notes
offered hereby will be passed upon for the Company by Kirkland & Ellis, New
York, New York.
EXPERTS
The consolidated financial statements of the Company at March 23, 1997 and
March 29, 1998 and for each of the three fiscal years in the period ended March
29, 1998, appearing in this Prospectus and Registration Statement, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGES
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<S> <C>
Audited Consolidated Financial Statements:
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets -- Assets As of March 23, 1997
and March 29, 1998........................................ F-3
Consolidated Balance Sheets -- Liabilities and Stockholder's
Equity As of March 23, 1997 and March 29, 1998............ F-4
Consolidated Statements of Income and Retained Earnings For
the fiscal years ended March 24, 1996, March 23, 1997 and
March 29, 1998............................................ F-5
Consolidated Statements of Cash Flows For the fiscal years
ended March 24, 1996, March 23, 1997 and March 29, 1998... F-6
Notes to Consolidated Financial Statements.................. F-7
Unaudited Consolidated Financial Statements:
Consolidated Balance Sheets -- Assets As of March 29, 1998
and June 28, 1998......................................... F-14
Consolidated Balance Sheets -- Liabilities and Stockholder's
Equity As of March 29, 1998 and June 28, 1998............. F-15
Consolidated Statements of Income and Retained Earnings For
the thirteen weeks ended June 22, 1997 and June 28,
1998...................................................... F-16
Consolidated Statements of Cash Flows For the thirteen weeks
ended June 22, 1997 and June 28, 1998..................... F-17
Notes to Consolidated Financial Statements.................. F-18
</TABLE>
F-1
<PAGE> 87
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Romacorp, Inc. and Subsidiaries
We have audited the accompanying balance sheets of Romacorp, Inc. and
Subsidiaries (the Company), a wholly-owned subsidiary of NPC International,
Inc., as of March 23, 1997 and March 29, 1998 and the related statements of
income and retained earnings, and cash flows for each of the three fiscal years
in the period ended March 29, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Romacorp, Inc. and
Subsidiaries at March 23, 1997 and March 29, 1998 and the results of their
operations and their cash flows for each of the three fiscal years in the period
ended March 29, 1998, in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the financial statements, in the fiscal year
ended March 24, 1996, the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of."
Ernst & Young LLP
Kansas City, Missouri
April 30, 1998
F-2
<PAGE> 88
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
MARCH 23, MARCH 29,
1997 1998
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................. $ -- $ --
Accounts receivable, net.................................. 1,473 1,351
Inventories of food and supplies.......................... 661 1,509
Deferred income tax asset................................. 318 583
Prepaid expenses.......................................... 519 583
Preopening costs.......................................... 1,196 466
Other current assets...................................... 16 22
------- -------
Total current assets................................... 4,183 4,514
Facilities and equipment, net............................... 46,516 52,600
Notes receivable, net....................................... 814 757
Goodwill, net of accumulated amortization of $3,716 and
$4,450, respectively...................................... 15,260 14,526
Deferred income tax asset................................... 865 1,423
Other assets................................................ 1,086 927
------- -------
Total assets................................................ $68,724 $74,747
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 89
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- (CONTINUED)
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
MARCH 23, MARCH 29,
1997 1998
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current Liabilities:
Accounts payable.......................................... $ 855 $ 1,094
Payroll taxes............................................. 512 120
Accrued interest.......................................... 46 28
Accrued payroll........................................... 653 1,317
Current portion of closure reserve........................ 200 100
Insurance reserves........................................ 871 1,161
Checks written in excess of cash.......................... 407 113
Accrued sales tax......................................... 118 485
Accrued real estate tax................................... 214 368
Other accrued liabilities................................. 1,546 1,109
Current portion of long-term debt......................... 444 444
------- -------
Total current liabilities.............................. 5,866 6,339
Long-term debt.............................................. 1,333 889
Closure reserve............................................. 541 443
Payable to affiliate........................................ 32,834 34,384
Long-term insurance reserves................................ 1,023 1,400
Stockholder's Equity:
Common stock, 2,000 shares authorized, 100 shares issued and
outstanding............................................... -- --
Paid-in capital............................................. 17,444 17,444
Retained earnings........................................... 9,683 13,848
------- -------
Total stockholder's equity............................. 27,127 31,292
------- -------
Total liabilities and stockholder's equity................ $68,724 $74,747
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 90
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
-----------------------------------
MARCH 24, MARCH 23, MARCH 29,
1996 1997 1998
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net restaurant sales........................................ $51,499 $68,778 $86,408
Net franchise revenues...................................... 7,570 8,526 8,482
------- ------- -------
Total revenues......................................... 59,069 77,304 94,890
------- ------- -------
Cost of sales............................................... 17,541 22,921 29,011
Direct labor................................................ 15,738 21,461 26,694
Other....................................................... 13,355 16,645 21,038
------- ------- -------
Total operating expenses............................... 46,634 61,027 76,743
------- ------- -------
Income from restaurant operations........................... 12,435 16,277 18,147
General and administrative expenses......................... 6,906 9,276 9,264
------- ------- -------
Operating income before impairment and loss provision for
underperforming assets.................................... 5,529 7,001 8,883
Impairment and loss provision for underperforming assets.... 3,500 -- --
------- ------- -------
Operating income............................................ 2,029 7,001 8,883
Other income (expense)......................................
Interest expense.......................................... (876) (1,550) (2,412)
Miscellaneous............................................. (257) 42 9
------- ------- -------
Income before income taxes............................. 896 5,493 6,480
Provision (benefit) for income taxes........................
Current................................................... 2,172 731 3,138
Deferred.................................................. (1,627) 1,286 (823)
------- ------- -------
545 2,017 2,315
------- ------- -------
Net income.................................................. 351 3,476 4,165
Beginning retained earnings................................. 5,856 6,207 9,683
------- ------- -------
Ending retained earnings.................................... $ 6,207 $ 9,683 $13,848
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 91
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
-----------------------------------
MARCH 24, MARCH 23, MARCH 29,
1996 1997 1998
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................................. $ 351 $ 3,476 $ 4,165
Non-cash items included in net income:
Depreciation and amortization............................ 3,320 3,808 5,260
Amortization of start-up costs........................... 673 1,617 1,937
Deferred income taxes.................................... (1,627) 1,286 (823)
Non-cash portion of impairment and loss provision........ 3,500 -- --
Change in assets and liabilities, net of acquisitions:
Accounts receivable, net................................. (31) (559) 122
Notes receivable, net.................................... 24 27 57
Inventories of food and supplies......................... (887) 1,435 (848)
Pre-opening costs........................................ (856) (2,095) (1,169)
Other current assets..................................... (260) (140) (71)
Accounts payable......................................... 339 139 239
Payroll taxes............................................ 123 90 (392)
Accrued interest......................................... (151) (18) (18)
Accrued payroll.......................................... 111 175 664
Health and workers compensation insurance reserves....... 414 623 667
Other accrued liabilities................................ 312 (448) 84
-------- -------- --------
Net cash flows provided by operating activities.......... 5,355 9,416 9,874
-------- -------- --------
INVESTING ACTIVITIES:
Capital expenditures, net.................................. (14,859) (23,835) (10,610)
Acquisition of business assets, net of cash................ (1,750) -- --
Changes in other assets, net............................... 118 (923) (76)
-------- -------- --------
Net cash flows used by investing activities.............. (16,491) (24,758) (10,686)
-------- -------- --------
FINANCING ACTIVITIES:
Payments of long-term debt................................. (904) (711) (444)
Change in checks written in excess of cash................. 102 305 (294)
Net change in payable to affiliate......................... 11,711 15,748 1,550
-------- -------- --------
Net cash flows provided by financing activities.......... 10,909 15,342 812
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.................... (227) -- --
-------- -------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............. 227 -- --
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR................... $ -- $ -- $ --
======== ======== ========
</TABLE>
Cash paid for interest was approximately $278,000, $178,000, and $131,000,
for the fiscal year 1996, 1997, and 1998, respectively.
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 92
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION, OPERATION AND BASIS OF PRESENTATION
Romacorp, Inc. and Subsidiaries (the Company) was acquired in June 1993, by
NPC International, Inc. which currently owns all outstanding shares of Romacorp,
Inc. These financial statements reflect the Company's operation of its own
restaurants and franchise revenue from franchisees' use of trademarks and other
proprietary information in the operation of Tony Roma's restaurants. The Company
maintains its corporate office in Dallas, Texas, and through its subsidiaries
provides menu development, training, marketing and other administrative services
related to the operation of the Roma Concept. NPC International, Inc., through
its affiliates, has provided accounting and management information services for
which the Company has been charged fees based on various factors, which have
approximated 1.0% of net sales for each period presented. The Company's
management believes these charges approximate fair value of the services
provided and actual cost to the Company would not be significantly different if
operated as an unaffiliated entity, except as disclosed in these footnotes. All
intercompany transactions between Romacorp, Inc. and its subsidiaries have been
eliminated.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR -- The Company operates on a 52 or 53 week fiscal year ending
on the last Sunday before the last Tuesday in March. The fiscal years ended
March 24, 1996, and March 23, 1997 each contained 52 weeks. The fiscal year
ended March 29, 1998 contained 53 weeks.
CASH EQUIVALENTS -- For purposes of the Consolidated Statements of Cash
Flows, the Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents. For each period
presented, substantially all cash was in the form of depository accounts.
INVENTORIES -- Inventories of food and supplies are valued at the lower of
cost (first-in, first-out method) or market.
PRE-OPENING COSTS -- The Company amortizes pre-opening costs, which
principally represent the cost of hiring and training new personnel, over a
period of one year commencing with the restaurant's opening.
FACILITIES AND EQUIPMENT -- Facilities and equipment are recorded at cost.
Depreciation is charged on the straight-line basis for buildings, furniture and
equipment. Leasehold improvements are amortized on the straight-line method over
the life of the lease or the life of the improvements whichever is shorter.
LONG-LIVED ASSETS -- Effective in fiscal 1996, the Company adopted
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of. The
majority of the Company's long-lived assets held for continuing use are
evaluated for potential impairment on a store-by-store basis. Assets held for
sale are stated at estimated fair value.
GOODWILL -- Goodwill represents the excess of cost over the identifiable
net assets acquired and is amortized on the straight-line method over periods
ranging from 25 to 40 years.
FRANCHISE REVENUE -- The franchise agreements for Tony Roma's restaurants
provide for an initial fee and continuing royalty payments based upon gross
sales, in return for operational support, product development, marketing
programs and various administrative services. Royalty revenue is recognized on
the accrual basis, although initial fees are not recognized until the
franchisee's restaurant is opened. Fees for granting exclusive development
rights to specific geographic areas are recognized when the right has been
granted and cash received is non-refundable. Net franchise revenue is presented
net of direct expenses, which include labor, travel and related costs of
Franchise Business Managers, who operate as liaisons between the franchise
community and the franchisor. Direct costs also include bad debt expense, and
opening costs consisting primarily of training expenses. Franchisees also
participate in national and local marketing programs, which are managed by the
Company; the related funding for which is separate and not included in the
accompanying financial statements.
F-7
<PAGE> 93
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS -- As of March 23, 1997 and March 29,
1998, the fair value of the Company's financial instruments, including cash
equivalents, approximates their carrying value.
INCOME TAXES -- The Company's results are included in the consolidated
federal income tax return of NPC International, Inc. The provisions for income
taxes, reflected in the accompanying statements, were calculated for the Company
on a separate return basis. The provisions for income taxes include taxes that
are deferred because of temporary differences between the financial statements
and tax bases of assets and liabilities. Deferred taxes arise principally from
the use of different depreciation methods and lives for tax purposes, and the
deferral of tax deductions for the insurance and closure reserves accrued for
financial statement purposes.
INSURANCE RESERVES -- The Company, along with NPC International, Inc. and
affiliates, is self-insured for certain risks and is covered by insurance
policies for other risks. The Company maintains reserves on a separate company
basis for their policy deductibles and other program expenses using case basis
evaluations and other analyses. The reserves include estimates of future trends
in claim severity and frequency, and other factors, which could vary as claims,
are ultimately settled. Reserve estimates are continually reviewed and
adjustments are reflected in current operations. Changes in deductible amounts
could impact both the establishment of future reserves and/or the rate of
premiums incurred.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
ADVERTISING COSTS -- Advertising costs are expensed as incurred. The
Company incurred $1,562,000, $2,138,000, and $2,668,000 of such costs in fiscal
1996, fiscal 1997 and fiscal 1998, respectively.
YEAR 2000 COMPLIANCE (UNAUDITED) -- In order to address the Year 2000
Issue, NPC International, Inc. has developed a plan to modify its systems, which
are used by the Company, and has begun implementation of this plan. The
management of NPC International, Inc. has not developed a plan and/or cost
estimates that consider the Company on a stand-alone basis. NPC International,
Inc. is evaluating the extent to which its computer operating systems will be
disrupted upon the turn of the century as a result of the Year 2000 Issue. NPC
presently believes that by modifying existing software and converting new
software, the Year 2000 Issue will not pose significant operational problems for
its information systems. However, if such modifications and conversions are not
timely or are not properly implemented, the Year 2000 Issue could have a
material adverse effect on the Company's business, financial condition and
results of operations.
RECENTLY ISSUED ACCOUNTING STANDARDS -- In April 1998, Statement of
Position (SOP) 98-5 Accounting for Costs of Start-up Activities was issued. The
SOP requires the Company to expense pre-opening costs as incurred and to report
the initial adoption as a cumulative effect of a change in accounting principle
as described in APB No. 20, Accounting Changes, during the first quarter of its
fiscal year 2000. The cumulative effect upon adoption will result in a one-time
charge to income in an amount equal to the net book value of the Company's
pre-opening costs. This change will also result in the discontinued amortization
of pre-opening cost expense in subsequent periods. At March 29, 1998, the
balance of pre-opening costs was $466,000.
F-8
<PAGE> 94
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(3) ACCOUNTS RECEIVABLE
Accounts receivable consists of the following:
<TABLE>
<CAPTION>
MARCH 23, MARCH 29,
1997 1998
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Franchise receivables....................................... $1,019 $1,324
Other receivables........................................... 650 299
------ ------
1,669 1,623
Allowances for doubtful accounts............................ (196) (272)
------ ------
Net receivables........................................ $1,473 $1,351
====== ======
</TABLE>
Franchise receivables represent royalties due based on a percent of sales
at the franchisees' Tony Roma's restaurants, and for other services provided,
and fees assessed in accordance with the franchise agreement. Other receivables
include amounts due for the sale of raw materials, principally ribs, which the
Company has sold from its supply to franchisees. Other receivables also includes
"banquet" sales to significant individual customers and other miscellaneous
items.
The Company generally does not require collateral on the accounts, but has
the right to terminate the franchise agreement in the event the royalties
becomes uncollectable.
(4) FACILITIES AND EQUIPMENT
Facilities and equipment consists of the following:
<TABLE>
<CAPTION>
ESTIMATED MARCH 23, MARCH 29,
USEFUL LIFE 1997 1998
------------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Land............................................ $ 11,200 $ 12,057
Buildings....................................... 15-30 years 15,992 26,790
Leasehold improvements.......................... 5-20 years 10,128 11,785
Furniture and equipment......................... 3-10 years 13,150 14,898
Construction in progress........................ 7,378 1,472
-------- --------
57,848 67,002
Less accumulated depreciation and
amortization.................................. (11,332) (14,402)
-------- --------
Net facilities and equipment.................... $ 46,516 $ 52,600
======== ========
</TABLE>
F-9
<PAGE> 95
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(5) INCOME TAXES
The provision (benefit) for income taxes consisted of the following:
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
-----------------------------------
MARCH 24, MARCH 23, MARCH 29,
1996 1997 1998
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal............................................. $ 1,816 $ 330 $2,755
State............................................... 164 49 99
Foreign............................................. 192 352 284
------- ------ ------
2,172 731 3,138
------- ------ ------
Deferred:
Federal............................................. (1,360) 581 (723)
State............................................... (123) 86 (26)
Foreign............................................. (144) 619 (74)
------- ------ ------
(1,627) 1,286 (823)
------- ------ ------
Provision for income taxes............................ $ 545 $2,017 $2,315
======= ====== ======
</TABLE>
The differences between the provision for income taxes and the amount
computed by applying the statutory federal income tax rate to earnings before
income taxes are as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
-----------------------------------
MARCH 24, MARCH 23, MARCH 29,
1996 1997 1998
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tax computed at statutory rate........................ $ 314 $1,923 $2,268
Goodwill amortization................................. 274 242 249
Tax credits........................................... (189) (309) (372)
State taxes, net of federal effect, and other......... 146 161 170
------ ------ ------
Provision for income taxes............................ $ 545 $2,017 $2,315
====== ====== ======
</TABLE>
F-10
<PAGE> 96
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for federal and state income tax purposes.
Significant components of the Company's deferred tax assets and liabilities are
as follows:
<TABLE>
<CAPTION>
MARCH 23, MARCH 29,
1997 1998
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Insurance reserves........................................ $ 595 $ 926
Closure reserves.......................................... 316 192
Accrued vacation.......................................... 166 245
Depreciation.............................................. 162 507
Allowance for doubtful accounts........................... 71 97
Other, net................................................ 297 204
------ ------
Total deferred tax assets.............................. 1,607 2,171
------ ------
Deferred tax liabilities:
Pre-opening expenses...................................... 424 165
Other, net................................................ -- --
------ ------
Total deferred tax liabilities......................... 424 165
------ ------
Net deferred tax assets..................................... 1,183 2,006
Current................................................... 318 583
------ ------
Non-current............................................... $ 865 $1,423
====== ======
</TABLE>
A valuation allowance against deferred tax assets is required if, based on
the weight of available evidence, it is more likely than not that some or all of
the deferred tax assets will not be realized. The Company believes, based on the
expected timing of the reversal of the future taxable temporary differences and
inclusion in the NPC International, Inc. consolidated tax return, that no
valuation allowance is necessary.
(6) LONG-TERM DEBT AND PAYABLE TO AFFILIATE
Long-term debt consists of a note payable to a former franchisee related to
the acquisition of facilities, equipment and inventory. Principal payments on
the note in the amount of $444,000, are due annually. Interest is paid quarterly
based on the prime rate at First Union Bank of New Jersey as adjusted. The note
is collateralized by the facilities.
The Company's primary credit facility is an intercompany agreement with NPC
Management, Inc., a subsidiary of NPC International, Inc. The facility functions
similar to a line of credit arrangement. Weekly cash is swept, as payment on the
facility, from each store's depository account and the lock box account
maintained by the Company to collect royalty and other payments from third
parties. As checks are presented for payment on the Company's disbursement
accounts amounts are advanced under terms of the facility. Interest is accrued
monthly based on the previous month's average borrowings. The interest rate is
adjusted monthly and equals the average borrowing rate for NPC Management, Inc.
plus 75 basis points. The agreement has annual renewal provisions and
accordingly, the borrowings are classified as long-term.
Interest expense incurred related to the borrowings from NPC was $612,000
in fiscal 1996, $1,430,000 in fiscal 1997, and $2,696,000 in fiscal 1998. These
amounts are net of $75,000, $339,000, and $332,000 capitalized during the years
ended March 24, 1996, March 23, 1997, and March 29, 1998, respectively.
F-11
<PAGE> 97
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(7) COMMITMENTS
The Company leases certain restaurant equipment and buildings under
operating leases. Rent expense for the fiscal years 1996, 1997, and 1998 was
$3,008,000, $3,412,000, and $3,879,000 respectively, including additional
rentals of approximately $697,000 in 1996, $687,000 in 1997, and $712,000 during
1998. The additional rentals are based upon a percentage of sales in excess of a
base amount as specified in the lease. The majority of the Company's leases
contain renewal option(s) for 5 to 10 years. Renewal of the remaining leases is
dependent on mutually acceptable negotiations.
At March 29, 1998, minimum rental commitments under operating leases that
have initial or remaining non-cancelable lease terms in excess of one year are
as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
----------- (DOLLARS IN THOUSANDS)
<S> <C>
1999..................................... $ 2,518
2000..................................... 2,115
2001..................................... 1,878
2002..................................... 1,787
2003..................................... 1,671
Thereafter............................... 10,626
-------
$20,595
=======
</TABLE>
In March 1998, NPC International, Inc. purchased two parcels of land for
approximately $1.6 million, which the Company is committed to buy at cost,
subsequent to the end of the fiscal year.
(8) PROFIT SHARING PLAN
The Company participates in the NPC International, Inc. Profit Sharing Plan
which was instituted on July 1, 1992. To qualify, employees must generally have
two years of service, attain the age of 21 and be employed on the last day of
the plan year. The contribution to the plan is at the discretion of the NPC
International, Inc. Board of Directors, based upon the earnings of the Company.
NPC International, Inc. contributed $184,267 on the Company's behalf for the
calendar year 1995. The 1995 amount is not included in the Company's statement
of income. The Company contributed $191,092 and $221,587 for the calendar years
1996 and 1997, respectively.
(9) STOCK OPTION PLAN
Employees of the Company participate in a non-qualified stock option plan
sponsored by NPC International, Inc. The options allow the employee to purchase
shares of NPC International, Inc. at a price equal to fair market value of the
stock at the time the options were awarded. The options generally become
exercisable over a four year period in equal amounts.
The Company's accounting method for the issuance of stock options is in
accordance with APB No. 25, and because the exercise price of the option equals
the market price of the underlying stock on the date of the grant, no
compensation expense is recognized.
The Company has considered Statement of Financial Accounting Standards No.
123 Accounting for Stock Based Compensation (Statement 123) and determined that
the impact of this statement on pro-forma disclosures would be immaterial.
Statement 123 requires certain disclosures about the outstanding and
exercisable options, option activity, weighted average exercise price per option
and option exercise price range for each income statement period.
F-12
<PAGE> 98
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Since the option activity relates only to NPC International, Inc.'s.
stockholders' equity, this information is not presented for the Company.
(10) IMPAIRMENT AND LOSS PROVISION FOR UNDERPERFORMING ASSETS
The Company recorded a pre-tax provision of $3,500,000 in fiscal 1996
related to the disposition of six underperforming Tony Roma's units and the
relocation of two others to be completed in the next year. The assets to be
disposed of consisted of buildings, leasehold improvements, and furniture and
equipment, which had a carrying value of approximately $2,800,000. The six units
to be disposed of generated sales of approximately $7,600,000 and losses from
restaurant operations of approximately $340,000 in fiscal 1996.
(11) CONTINGENCIES
The Company currently has a case pending in the Courts of Appeals, 2nd
District of Texas arising out of a previous judgement against the Company
related to a cessation of lease payments. The Company has posted a supersedeas
bond in the amount of $530,654 pending the appeals process. The case was argued
December 10, 1997, and no decision has been rendered. These financial statements
do not include a provision for an adverse outcome of this case. The Company is
involved in other legal actions arising in the normal course of business.
Management believes the outcome of these actions will not have material adverse
effects on the financial position or results of operations of the Company.
Pursuant to the Recapitalization Agreement, NPC has agreed to indemnify and hold
Holdings and the Company harmless for liabilities and costs associated with the
litigation.
(12) SUBSEQUENT EVENT
On April 24, 1998, NPC International, Inc. and Sentinel Capital Partners,
L.P. executed a recapitalization agreement related to Romacorp, Inc. and
subsidiaries. The transaction is contingent upon financing and customary
conditions and approval. The transaction is expected to close in June 1998.
F-13
<PAGE> 99
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 29, JUNE 28,
1998 1998
--------- ---------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................. $ -- $ --
Accounts receivable, net.................................. 1,351 1,386
Inventories of food and supplies.......................... 1,509 2,127
Deferred income tax asset................................. 583 583
Prepaid expenses.......................................... 583 690
Preopening expenses....................................... 466 303
Other current assets...................................... 22 22
------- -------
Total current assets................................... 4,514 5,111
Facilities and equipment, net............................... 52,600 53,294
Notes receivable, net....................................... 757 746
Goodwill, net of accumulated amortization of $4,450 and
$4,633, respectively...................................... 14,526 14,343
Deferred income tax asset................................... 1,423 1,423
Other assets................................................ 927 859
------- -------
Total assets................................................ $74,747 $75,776
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-14
<PAGE> 100
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- (CONTINUED)
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
MARCH 29, JUNE 28,
1998 1998
---------- ---------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Current Liabilities
Accounts payable.......................................... $ 1,094 $ 1,115
Payroll taxes............................................. 120 333
Accrued interest.......................................... 28 28
Accrued payroll........................................... 1,317 797
Current portion of closure reserve........................ 100 100
Insurance reserves........................................ 1,161 1,065
Checks written in excess of cash.......................... 113 642
Accrued sales tax......................................... 485 363
Accrued real estate tax................................... 368 320
Other accrued liabilities................................. 1,109 1,233
Current portion of long-term debt......................... 444 444
------- -------
Total current liabilities.............................. 6,339 6,440
Long-term debt.............................................. 889 889
Closure reserve............................................. 443 422
Payable to affiliate........................................ 34,384 33,887
Long-term insurance reserves................................ 1,400 1,400
Stockholder's Equity:
Common stock, 2,000 shares authorized, 100 shares issued and
outstanding............................................... -- --
Paid-in capital............................................. 17,444 17,444
Retained earnings........................................... 13,848 15,294
------- -------
Total stockholder's equity............................. 31,292 32,738
------- -------
Total liabilities and stockholder's equity................ $74,747 $75,776
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-15
<PAGE> 101
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
--------------------
JUNE 22, JUNE 28,
1997 1998
-------- --------
<S> <C> <C>
Net restaurant sales........................................ $20,225 $22,513
Net franchise revenues...................................... 2,050 2,114
------- -------
Total revenues......................................... 22,275 24,627
------- -------
Cost of sales............................................... 6,584 7,833
Direct labor................................................ 6,375 6,800
Other....................................................... 4,892 5,279
------- -------
Total operating expenses............................... 17,851 19,912
------- -------
Income from restaurant operations........................... 4,424 4,715
General and administrative expenses......................... 2,346 2,021
------- -------
Operating income............................................ 2,078 2,694
Other income (expense)
Interest expense.......................................... (476) (663)
Miscellaneous............................................. 21 194
------- -------
Income before income taxes............................. 1,623 2,225
Income tax provision........................................ 568 779
------- -------
Net income.................................................. 1,055 1,446
Beginning retained earnings................................. 9,683 13,848
------- -------
Ending retained earnings.................................... $10,738 $15,294
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-16
<PAGE> 102
ROMACORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
13 WEEKS ENDED
------------------------------
JUNE 22, 1997 JUNE 28, 1998
------------- -------------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.................................................. $ 1,055 $ 1,446
Non-cash items included in net income:
Depreciation and amortization............................. 1,210 1,410
Amortization of start-up costs............................ 545 267
Change in assets and liabilities:
Accounts receivable, net.................................. 403 (35)
Notes receivable, net..................................... 5 7
Inventories of food and supplies.......................... (249) (618)
Income tax receivable..................................... 688 --
Other current assets...................................... (403) (211)
Accounts payable.......................................... 437 22
Payroll taxes............................................. (369) 213
Accrued interest.......................................... 2 --
Accrued payroll........................................... 616 (520)
Health and workers compensation reserves.................. 73 (96)
Other accrued liabilities................................. 321 (47)
------- -------
Net cash flows provided by operating activities........... 4,334 1,838
------- -------
INVESTING ACTIVITIES:
Capital expenditures, net................................... (4,381) (1,912)
Changes in other assets, net................................ (4) 42
------- -------
Net cash flows used by investing activities............... (4,385) (1,870)
------- -------
FINANCING ACTIVITIES:
Net change in payable to affiliate.......................... 987 (497)
Change in checks written in excess of cash.................. (407) 529
------- -------
Net cash flows provided by financing activities........... 580 32
------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS..................... 529 --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............ -- --
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 529 $ --
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-17
<PAGE> 103
ROMACORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION
The consolidated financial statements and information included herein are
unaudited; however, they reflect all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of Management, necessary for a fair
statement of the results of operations and cash flows for the interim periods
ended June 22, 1997 and June 28, 1998 and the financial position as of June 28,
1998. Results for the period ended June 28, 1998 are not necessarily indicative
of the results that may be expected for the entire fiscal year. The notes to the
combined consolidated financial statements contained in this Registration
Statement should be read in conjunction with the unaudited consolidated
statements.
(2) SUBSEQUENT EVENTS
RECAPITALIZATION
On June 30, 1998, NPC International, Inc. and subsidiaries ("NPC") and
Sentinel Capital Partners, L.P. ("Sentinel") executed a recapitalization
agreement effective June 28, 1998 related to Romacorp, Inc. and its subsidiaries
(the "Company"). The Company redeemed stock held by NPC so that NPC held 20% of
the equity of the Company following the transaction. Sentinel became the
majority equity owner of the Company following the transaction. In conjunction
with this transaction, $75,000,000 of 12% Senior Notes were issued. Interest on
the Senior Notes will accrue from the date of issuance and will be payable in
arrears on January 1 and July 1 of each year commencing January 1, 1999, at the
rate of 12% per annum. The Senior Notes will mature on July 1, 2006.
LONG-TERM DEBT AND PAYABLE TO AFFILIATE
Long-term debt as of March 29, 1998 consisted of a note payable to a former
franchisee. As part of the recapitalization transaction, this note was paid in
full. In addition, in conjunction with the recapitalization, $33,887,000 in
payable to affiliate was contributed to capital.
CREDIT FACILITY
Effective July 1, 1998 the Company entered into an agreement with a bank
for a revolving credit facility which will provide borrowings up to $15,000,000,
is secured by substantially all of the assets of the Company, and bears interest
at the Company's option of prime rate or up to six-month LIBOR plus 2.25%. Both
rates are subject to maintaining certain financial covenants, and interest is
payable upon maturity of the LIBOR or monthly for prime rate advances. In
addition, a commitment fee of .375% is payable monthly on all unused
commitments. As of August 29, 1998, $3,900,000 was outstanding under the Credit
Facility.
STOCK OPTION PLAN
The Company adopted a stock option plan (the "Stock Plan"), which provides
for the grant to certain key employees and/or directors of the Company of stock
options that are non-qualified options for federal income tax purposes. The
Stock Plan will be administered by the Board of Directors or a committee
thereof.
INCOME TAXES
Prior to the recapitalization, the Company's results were included in the
consolidated federal income tax return of NPC International, Inc. Following the
recapitalization, the Company will file its federal income tax return on a stand
alone basis.
F-18
<PAGE> 104
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INITIAL PURCHASERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITY OTHER THAN THOSE TO WHICH IT RELATES, NOR DOES IT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................... 1
Risk Factors............................... 13
The Company................................ 19
Use of Proceeds............................ 20
Capitalization............................. 21
Selected Historical Financial Data......... 22
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 24
Business................................... 30
Management................................. 39
Security Ownership......................... 42
Certain Relationships and Related
Transactions............................. 43
Description of New Revolving Credit
Facility................................. 45
Description of Exchange Notes.............. 46
The Exchange Offer......................... 71
Plan of Distribution....................... 80
Legal Matters.............................. 81
Experts.................................... 81
Index to Consolidated Financial
Statements............................... F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
ROMACORP, INC.
OFFER TO EXCHANGE
SERIES B 12% SENIOR NOTES
DUE 2006 FOR SERIES A
12% SENIOR NOTES DUE 2006
TONY ROMA LOGO
---------------
PROSPECTUS
, 1998
---------------
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 105
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Each of the Company, the Parent, Roma Systems, Inc. and Roma Huntington
Beach, Inc. (the "Delaware Companies") is incorporated under the laws of the
State of Delaware. Section 145 of the General Corporation Law of the State of
Delaware, inter alia, ("Section 145") provides that a Delaware corporation may
indemnify any persons who were, are or are threatened to be made, parties to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such corporation), by reason of the fact that such person is or was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his conduct was illegal. A Delaware corporation may indemnify
any persons who are, were or are threatened to be made, a party to any
threatened, pending or completed action or suit by or in the right of the
corporation by reason of the fact that such person was a director, officer,
employee or agent of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests, provided that no indemnification is
permitted without judicial approval if the officer, director, employee or agent
is adjudged to be liable to the corporation. Where an officer, director,
employee or agent is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director has actually and reasonably incurred.
The Certificate of Incorporation of each of the Delaware Companies provides
for the indemnification of directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as it
currently exists or may hereafter be amended.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
The Delaware Companies maintain and have in effect insurance policies
covering all of their respective directors and officers against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933.
Roma Fort Worth, Inc. and Roma Bar Management Corporation (the "Texas
Companies") are incorporated under the laws of the State of Texas, Section
2.02-1 of the Texas Business Corporation Act, inter alia, ("Section 2.02-1")
provides that a Texas corporation may indemnify a person who was, is, or is
threatened to be made a named defendant or respondent in a proceeding because
the person is or was an officer or director only if it is determined that the
person: (1) conducted himself in good faith; (2) reasonably believed: (a) in the
case of conduct in his official capacity as a director of the corporation, that
his conduct was in the corporation's best interests; and (b) in all other cases
that his conduct was at least not opposed to the corporation's best interests;
and (3) in the case of any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful. The indemnity may include judgments, penalties
(including excise and similar taxes), fines, settlements, and reasonable
expenses actually incurred by the person in connection with the proceeding, but
if the person is found liable to the corporation or is found liable on the basis
that personal benefit was improperly received by the person, the indemnification
(1) is limited to reasonable expenses
II-1
<PAGE> 106
actually incurred by the person in connection with the proceeding and (2) shall
not be made in respect of any proceeding in which the person shall have been
found liable for willful or intentional misconduct in the performance of his
duty to the corporation. The Texas Companies may indemnify and advance expenses
to persons who are not or were not officers, employees, or agents of the
corporation but who are or were serving at the request of the corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, employee benefit
plan, other enterprise, or other entity to the same extent that it may indemnify
and advance expenses to directors under Section 2.02-1. The indemnity may
include judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses actually incurred by the person in
connection with the proceeding, but if the person is found liable to the
corporation or is found liable on the basis that personal benefit was improperly
received by the person, the indemnification (1) is limited to reasonable
expenses actually incurred by the person in connection with the proceeding and
(2) shall not be made in respect of any proceeding in which the person shall
have been found liable for willful or intentional misconduct in the performance
of his duty to the corporation. Where an officer, director, employee or agent is
wholly successful, on the merits or otherwise, in connection with a proceeding
in which he is named defendant or respondent because he is or was a director,
the corporation must indemnify him against the reasonable expenses which such
officer or director, employee or agent has actually and reasonably incurred.
The Certificates of Incorporation of the Texas Companies provide for the
indemnification of their directors and officers to the fullest extent permitted
by the Texas Business Corporation Act.
Section 2.02-1 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, employee benefit plan, other enterprise, or other entity, against
any liability asserted against him and incurred by him in such a capacity or
arising out of his status as such, whether or not the corporation would
otherwise have the power to indemnify him under Section 2.02-1.
The Texas Companies maintain and have in effect insurance policies covering
all of their respective directors and officers against certain liabilities for
actions taken in such capacities, including liabilities under the Securities Act
of 1933.
Roma Dining LP ("Dining") is a limited partnership under the laws of the
State of Delaware, including the Delaware Revised Uniform Limited Partnership
Act. Section 17-108 of the Delaware Limited Liability Company Act, inter alia,
("Section 17-108") provides that subject to such standards and restrictions, if
any, as are set forth in its limited liability company agreement, a Delaware
limited liability company may, and shall have the power to, indemnify and hold
harmless any member or manager or other person from and against any and all
claims and demands whatsoever.
Dining's limited partnership agreement provides for the indemnification of
any and all of its partners, agents or employees or any person who may have
served at Dining's request as an officer of any corporation, partnership, joint
venture, trust or other enterprise of Dining to the fullest extent permitted by
the Delaware Revised Uniform Limited Partnership Act, as it currently exists or
may hereafter be amended.
Section 17-108 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 17-108.
II-2
<PAGE> 107
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
<TABLE>
<C> <S>
2.1 Recapitalization Agreement dated April 24, 1998 by and among
the Company, NPC International, Inc., NPC Restaurant
Holdings, Inc. and Sentinel Capital Partners, L.P.
2.2 Assignment Agreement dated July 1, 1998 by and among
Sentinel, Sentinel Capital partners II, L.P. ("Sentinel
II"), Omega Partners, L.P. ("Omega"), Provident Financial
Group, Inc. ("Provident"), Travelers Casualty and Surety
Company ("Travelers I"), The Travelers Insurance Company
("Travelers II"), The Travelers Life and Annuity Company
("Travelers III") and the Phoenix Insurance Company
("Phoenix", and together with Sentinel II, Omega, Provident,
Travelers I, Travelers II, and Travelers III, the
"Assignees")
3.1 Certificate of Incorporation of the Company
3.2 Certificate of Incorporation of Roma Systems, Inc.
3.3 Certificate of Incorporation of Roma Holdings, Inc.
3.4 Certificate of Incorporation of Roma Huntington Beach, Inc.
3.5 Articles of Incorporation of Roma Bar Management Corporation
3.6 Articles of Incorporation of Roma Fort Worth, Inc.
3.7 Certificate of Limited Partnership of Roma Dining LP
3.8 By-laws of the Company
3.9 By-laws of Roma Systems, Inc.
3.10 By-laws of Roma Holdings, Inc.
3.11 By-laws of Roma Huntington Beach Inc.
3.12 Amended and Restated By-laws of Roma Bar Management
Corporation
3.13 By-laws of Roma Fort Worth, Inc.
3.14 Agreement of Limited Partnership of Roma Dining LP
4.1 Indenture dated as of July 1, 1998 between the Company, the
Guarantors named therein and United States Trust Company of
New York
4.2 Purchase Agreement dated as of June 26, 1998 among the
Company, Salomon Brothers Inc and Schroder & Co. Inc.
4.3 Registration Rights Agreement dated as of July 1, 1998 among
the Company, the Guarantors named therein, Salomon Brothers
Inc and Schroder & Co. Inc.
5.1 Opinion and consent of Kirkland & Ellis.
10.1 Stockholders Agreement dated as of July 1, 1998 by and among
the Company, the Assignees and Holdings
10.2 Registration Rights Agreement dated as of July 1, 1998 by
and among the Company, NPC Restaurant Holdings, Inc.,
Sentinel Capital Partners, L.P., Sentinel Capital Partners
II, L.P., Omega Partners, L.P., Provident Financial Group,
Inc., Travelers Casualty and Surety Company, Travelers
Insurance Company, The Travelers Life and Annuity Company
and The Phoenix Insurance Company
10.3 Transitional Financial and Accounting Services Agreement
dated as of July 1, 1998 by and among NPC Management, Inc.
and the Company
10.4 Management Services Agreement dated as of July 1, 1998 by
and among the Company and Sentinel
10.5 Management Agreement dated as of July 1, 1998 by and among
the Company and Robert B. Page.
10.6 Credit Agreement dated as of July 1, 1998 by and among the
Company, Roma Systems, Inc., Roma Franchise Corporation,
Roma Holdings, Inc., Roma Dining LP, The Provident Bank and
various lenders described therein
12.1 Statement of Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Issuer.
</TABLE>
II-3
<PAGE> 108
<TABLE>
<C> <S>
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).
24.1 Powers of Attorney (included in signature page).
25.1 Statement of Eligibility of Trustee on Form T-1.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Tender Instructions.
</TABLE>
- ---------------
+ To be filed by Amendment.
ITEM 22. UNDERTAKINGS.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by Rule 3-19 of the chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided, that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration statements on Form
F-3, a post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statements and information are contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Form F-3.
(1) Each undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement,
by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
II-4
<PAGE> 109
(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not
be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described under
Item 20 or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Each undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
Each undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
<PAGE> 110
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Romacorp, Inc.
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Romacorp,
Inc.), to sign any or all amendments (including post-effective amendments) to
this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ ERIC D. BOMMER Director
- --------------------------------------------------------
Eric D. Bommer
/s/ DAVID S. LOBEL Director
- --------------------------------------------------------
David S. Lobel
/s/ JOHN F. MCCORMACK Director
- --------------------------------------------------------
John F. McCormack
/s/ MICHAEL J. MYERS Director
- --------------------------------------------------------
Michael J. Myers
/s/ JAMES K. SCHWARTZ Director
- --------------------------------------------------------
James K. Schwartz
</TABLE>
II-6
<PAGE> 111
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Systems, Inc.
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Roma Systems,
Inc.), to sign any or all amendments (including post-effective amendments) to
this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ DAVID G. SHORT Director
- --------------------------------------------------------
David G. Short
</TABLE>
II-7
<PAGE> 112
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Dining LP
By: Romacorp, Inc.
its general partner
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Romacorp,
Inc., as the general partner of the Registrant), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ ERIC D. BOMMER Director
- --------------------------------------------------------
Eric D. Bommer
/s/ DAVID S. LOBEL Director
- --------------------------------------------------------
David S. Lobel
/s/ JOHN F. MCCORMACK Director
- --------------------------------------------------------
John F. McCormack
/s/ MICHAEL J. MYERS Director
- --------------------------------------------------------
Michael J. Myers
/s/ JAMES K. SCHWARTZ Director
- --------------------------------------------------------
James K. Schwartz
</TABLE>
II-8
<PAGE> 113
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Holdings, Inc.
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Roma
Holdings, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ DAVID G. SHORT Director
- --------------------------------------------------------
David G. Short
</TABLE>
II-9
<PAGE> 114
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Huntington Beach, Inc.
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Troy D. Cook his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Roma
Huntington Beach, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ DAVID G. SHORT Director
- --------------------------------------------------------
David G. Short
</TABLE>
II-10
<PAGE> 115
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Bar Management Corporation
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Roma Bar
Management Corporation), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ DAVID G. SHORT Director
- --------------------------------------------------------
David G. Short
</TABLE>
II-11
<PAGE> 116
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on August 31, 1998.
Roma Fort Worth, Inc.
By: /s/ ROBERT B. PAGE
------------------------------------
Name: Robert B. Page
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints any of Robert B. Page or Susan R. Holland his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Roma Fort
Worth, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated on August 31, 1998:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ ROBERT B. PAGE Chief Executive Officer and Director
- -------------------------------------------------------- (principal executive officer)
Robert B. Page
/s/ SUSAN R. HOLLAND Vice President, Finance -- Chief Financial
- -------------------------------------------------------- Officer, (principal financial officer and
Susan R. Holland accounting officer)
/s/ DAVID G. SHORT Director
- --------------------------------------------------------
David G. Short
</TABLE>
II-12
<PAGE> 117
EXHIBITS INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
2.1 Recapitalization Agreement dated April 24, 1998 by and among
the Company, NPC International, Inc., NPC Restaurant
Holdings, Inc. and Sentinel Capital Partners, L.P...........
2.2 Assignment Agreement dated July 1, 1998 by and among
Sentinel, Sentinel Capital partners II, L.P. ("Sentinel
II"), Omega Partners, L.P. ("Omega"), Provident Financial
Group, Inc. ("Provident"), Travelers Casualty and Surety
Company ("Travelers I"), The Travelers Insurance Company
("Travelers II"), The Travelers Life and Annuity Company
("Travelers III") and the Phoenix Insurance Company
("Phoenix", and together with Sentinel II, Omega, Provident,
Travelers I, Travelers II, and Travelers III, the
"Assignees")................................................
3.1 Certificate of Incorporation of the Company.................
3.2 Certificate of Incorporation of Roma Systems, Inc. .........
3.3 Certificate of Incorporation of Roma Holdings, Inc. ........
3.4 Certificate of Incorporation of Roma Huntington Beach,
Inc. .......................................................
3.5 Articles of Incorporation of Roma Bar Management
Corporation.................................................
3.6 Articles of Incorporation of Roma Fort Worth, Inc. .........
3.7 Certificate of Limited Partnership of Roma Dining LP........
3.8 By-laws of the Company......................................
3.9 By-laws of Roma Systems, Inc. ..............................
3.10 By-laws of Roma Holdings, Inc. .............................
3.11 By-laws of Roma Huntington Beach Inc. ......................
3.12 Amended and Restated By-laws of Roma Bar Management
Corporation.................................................
3.13 By-laws of Roma Fort Worth, Inc. ...........................
3.14 Agreement of Limited Partnership of Roma Dining LP..........
4.1 Indenture dated as of July 1, 1998 between the Company, the
Guarantors named therein and United States Trust Company of
New York....................................................
4.2 Purchase Agreement dated as of June 26, 1998 among the
Company, Salomon Brothers Inc and Schroder & Co. Inc. ......
4.3 Registration Rights Agreement dated as of July 1, 1998 among
the Company, the Guarantors named therein, Salomon Brothers
Inc and Schroder & Co. Inc. ................................
5.1 Opinion and consent of Kirkland & Ellis. ...................
10.1 Stockholders Agreement dated as of July 1, 1998 by and among
the Company, the Assignees and Holdings.....................
10.2 Registration Rights Agreement dated as of July 1, 1998 by
and among the Company, NPC Restaurant Holdings, Inc.,
Sentinel Capital Partners, L.P., Sentinel Capital Partners
II, L.P., Omega Partners, L.P., Provident Financial Group,
Inc., Travelers Casualty and Surety Company, Travelers
Insurance Company, The Travelers Life and Annuity Company
and The Phoenix Insurance Company...........................
10.3 Transitional Financial and Accounting Services Agreement
dated as of July 1, 1998 by and among NPC Management, Inc.
and the Company.............................................
10.4 Management Services Agreement dated as of July 1, 1998 by
and among the Company and Sentinel .........................
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
10.5 Management Agreement dated as of July 1, 1998 by and among
the Company and Robert B. Page..............................
10.6 Credit Agreement dated as of July 1, 1998 by and among the
Company, Roma Systems, Inc., Roma Franchise Corporation,
Roma Holdings, Inc., Roma Dining LP, The Provident Bank and
various lenders described therein...........................
12.1 Statement of Computation of Ratios..........................
21.1 Subsidiaries of the Issuer..................................
23.1 Consent of Ernst & Young LLP................................
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).......
24.1 Powers of Attorney (included in signature page).............
25.1 Statement of Eligibility of Trustee on Form T-1.............
27.1 Financial Data Schedule.....................................
99.1 Form of Letter of Transmittal...............................
99.2 Form of Notice of Guaranteed Delivery.......................
99.3 Form of Tender Instructions.................................
</TABLE>
<PAGE> 1
EXHIBIT 2.1
RECAPITALIZATION AGREEMENT
Among
ROMACORP, INC.
NPC INTERNATIONAL, INC.
NPC RESTAURANT HOLDINGS, INC.
and
SENTINEL CAPITAL PARTNERS, L.P.
April 24, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1.
PURCHASE, SALE AND TERMS OF STOCK AND DEBT SECURITIES....................................................2
1.1 Authorization..........................................................................2
1.2 Sale of Company Common Stock...........................................................2
1.3 Stock Redemption.......................................................................2
1.4 Redemption Price Adjustment............................................................3
1.5 Purchase and Sale of Real Estate.......................................................5
1.6 Letter of Credit; Capitalization Proceeds. ............................................5
1.7 Cancellation of Intercompany Payables..................................................6
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP..............................................................6
2.1 Organization; Power and Authority......................................................6
2.2 Authorization; Execution and Validity..................................................6
2.3 Title to Shares........................................................................6
2.4 No Conflict; NPC Group Consents........................................................6
2.5 Litigation; Orders.....................................................................7
2.6 Brokers................................................................................7
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP AND COMPANY .................................................7
3.1 Organization; Power and Authority......................................................7
3.2 Authorization; Execution and Validity..................................................8
3.3 Company Common Stock...................................................................8
3.4 Capitalization.........................................................................8
3.5 Private Sale; Voting Agreements........................................................8
3.6 Financial Statements...................................................................8
3.7 Absence of Certain Changes.............................................................9
3.8 No Conflict; Company Consents.........................................................10
3.9 Permits; Compliance with Law..........................................................11
3.10 Real Property.........................................................................11
3.11 Personal Property.....................................................................12
3.12 Suppliers.............................................................................12
3.13 Contracts.............................................................................13
3.14 Litigation; Orders....................................................................15
3.15 Environmental Laws....................................................................15
3.16 Intellectual Property.................................................................15
3.17 Unions................................................................................16
3.18 Employee Benefits.....................................................................17
3.19 Tax Matters...........................................................................18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
3.20 Brokers...............................................................................19
3.21 Powers of Attorney....................................................................20
3.22 Guaranties............................................................................20
3.23 Transactions With Affiliates..........................................................20
3.24 Insurance.............................................................................20
3.25 Franchise Matters.....................................................................20
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF INVESTOR..............................................................22
4.1 Organization; Power and Authority.....................................................22
4.2 Authorization; Execution and Validity.................................................22
4.3 No Conflict; Investor Consents........................................................22
4.4 Litigation; Orders....................................................................22
4.5 Brokers...............................................................................22
4.6 Investment Matters....................................................................23
ARTICLE 5.
COVENANTS OF NPC GROUP AND THE COMPANY..................................................................23
5.1 Cooperation by NPC Group and the Company..............................................23
5.2 Further Assurances....................................................................23
5.3 Governmental Matters..................................................................24
5.4 Supplements to Schedules..............................................................24
5.5 Cooperation in Rule 144A Offering.....................................................24
5.6 Pre-Closing Access to Information.....................................................24
5.7 Conduct of Business...................................................................25
5.8 Transfer of Stock.....................................................................26
5.9 Non-Solicitation......................................................................27
5.10 Real Estate...........................................................................27
5.11 Re-building or Replacement of Damaged Restaurant......................................28
5.12 Exclusivity...........................................................................28
5.13 Confidentiality.......................................................................29
5.14 Termination of Agreements.............................................................29
ARTICLE 6.
COVENANTS OF INVESTOR...................................................................................29
6.1 Cooperation by Investor...............................................................29
6.2 Pre-Closing Access to Information.....................................................29
6.3 Further Assurances....................................................................29
6.4 Governmental Matters..................................................................30
6.5 Notice of Breach......................................................................30
6.6 The Rule 144A Offering................................................................30
6.7 Non-Solicitation......................................................................31
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 7.
MUTUAL COVENANTS........................................................................................31
7.1 Tax Matters...........................................................................31
7.2 Books and Records.....................................................................34
7.3 Certain Consents......................................................................35
7.4 Releases..............................................................................35
ARTICLE 8.
CONDITIONS PRECEDENT TO CLOSING.........................................................................35
8.1 Conditions Precedent to Investor's Obligations........................................35
8.2 Conditions Precedent to NPC Group's and Company's Obligations.........................36
ARTICLE 9.
CLOSING.................................................................................................37
9.1 Time and Place........................................................................37
9.2 Deliveries by NPC Group...............................................................38
9.3 Deliveries by Company.................................................................39
9.4 Deliveries by Investor................................................................39
ARTICLE 10.
TERMINATION PRIOR TO CLOSING DATE.......................................................................40
10.1 Termination...........................................................................40
10.2 Effect of Termination.................................................................41
ARTICLE 11.
INDEMNIFICATION AND PROCEDURES..........................................................................41
11.1 Indemnification by NPC Group..........................................................41
11.2 Indemnification by Investor...........................................................41
11.3 Notice and Resolution of Claims.......................................................42
11.4 Limits on Indemnification.............................................................43
11.5 Determination of Loss and Amount......................................................44
11.6 Payment...............................................................................45
11.7 Other Indemnitees.....................................................................45
ARTICLE 12.
EMPLOYEE MATTERS........................................................................................45
12.1 Employees.............................................................................45
12.2 Welfare Benefits......................................................................45
ARTICLE 13.
MISCELLANEOUS...........................................................................................46
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C>
13.1 Non-Compete Covenant..................................................................46
13.2 Severability..........................................................................47
13.3 Successors and Assigns................................................................47
13.4 Counterparts..........................................................................47
13.5 Headings..............................................................................47
13.6 Waiver................................................................................47
13.7 No Third-Party Beneficiaries..........................................................48
13.8 Expenses..............................................................................48
13.9 Notices...............................................................................48
13.10 Governing Law.........................................................................50
13.11 Interpretation........................................................................50
13.12 Public Announcements..................................................................51
13.13 Specific Performance..................................................................51
13.14 Entire Agreement......................................................................51
13.15 Amendment.............................................................................51
ARTICLE 14.
DEFINITIONS.............................................................................................51
14.1 Definitions...........................................................................51
EXHIBITS:
A -- Registration Rights Agreement
B -- Stockholders' Agreement
C -- Transitional Financial and Accounting Services Agreement
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
SCHEDULES:
1.4.1 -- Adjustment Statement
3.1 -- Jurisdictions of Foreign Qualification
3.4 -- Capital Stock or Equity Interests
3.6.1 -- Financial Statements
3.6.3 -- Liabilities
3.7 -- Events Since Balance Sheet Date
3.8 -- No Conflicts or Consents
3.9 -- Permits; Compliance with Law
3.10.1 -- Owned Real Property
3.10.2 -- Leases
3.11.2 -- Leased Personal Property
3.12 -- Suppliers
3.13(a) -- Material Contracts
3.13(b) -- Material Defaults
3.14 -- Litigation; Orders
3.15.1 -- Environmental Permits and Consent Agreements
3.16.1 -- Owned Intellectual Property
3.16.2 -- Licenses
3.17 -- Employment Agreements; Change of Control Obligations; Key
Employees
3.18.1 -- Employee Benefit Plans
3.18.5 -- Multiple Employer Plans; Multiemployer Plans; ERISA Liabilities
3.19.2 -- Tax Returns
3.19.8 -- Interests in Partnerships and Other Entities
3.24 -- Insurance
3.25.1(a) -- Uniform Franchise Offering Circulars
3.25.1(b) -- Franchise Renewal Applications
3.25.1(c) -- Franchise Actions
3.25.3 -- Compliance With Franchise Agreements
5.9 -- Solicitation
8.2.5 -- Obligations to be Released
12.1 -- Management Employees
</TABLE>
v
<PAGE> 7
EXECUTION COPY
RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT dated as of April 24, 1998 (the
"Agreement"), among ROMACORP, INC., a Delaware corporation ("Company"), NPC
INTERNATIONAL, INC., a Kansas corporation ("NPC"), NPC RESTAURANT HOLDINGS,
INC., a Delaware corporation and wholly-owned subsidiary of NPC ("Holdings," and
collectively with NPC, "NPC Group"), and SENTINEL CAPITAL PARTNERS, L.P., a
Delaware limited partnership ("Investor").
W I T N E S S E T H:
WHEREAS, Holdings owns 100 shares ("Shares") of common stock, par value
$0.01 per share, of Company ("Company Common Stock"), constituting all of the
issued and outstanding shares of capital stock of Company;
WHEREAS, Investor will contribute the Equity Purchase Price (as defined
below) to the Company in exchange for shares of the Company Common Stock and
such other securities of the Company (collectively, the "Purchase Shares") as
Investor shall request pursuant to this Agreement (such purchase, the "Stock
Purchase"); provided that the Investor shall hold 90% of the Company Common
Stock and Designated Preferred Stock, if any, outstanding after the
Recapitalization (without taking into account any potential dilution pursuant to
the pool of management options);
WHEREAS, Investor has proposed, and the Company and NPC Group have
agreed, that the Company arrange for the issuance by the Company of high yield
debt securities and/or preferred securities pursuant to Rule 144A promulgated
pursuant to the Securities Act of 1933, in exchange for approximately $90
million to $100 million (the "Rule 144A Offering");
WHEREAS, the parties hereto desire that, immediately after the Stock
Purchase and the Rule 144A Offering, the Company shall redeem from Holdings,
shares (the "Redemption Shares") of Company Common Stock in exchange for the
Redemption Price (such redemption, the "Stock Redemption") and Holdings shall
retain shares of Company Common Stock and other securities such that immediately
after the Closing Holdings shall own 10% of the Company Common Stock and
Designated Preferred Stock, if any, outstanding after the Recapitalization
(without taking into account any potential dilution pursuant to the pool of
management options);
WHEREAS, the Investor intends to cause the Company to enter into a
credit facility with a lender effective on the Closing Date (the "Credit
Transaction"), which agreement will be secured by assets of the Company and the
Company Affiliates;
<PAGE> 8
WHEREAS, the Stock Purchase, the Rule 144A Offering, the Stock
Redemption and the Credit Transaction are referred to herein as the
"Recapitalization"; and
WHEREAS, it is intended that the Recapitalization be recorded as a
recapitalization for financial reporting purposes but the transactions
contemplated by this Agreement are not contingent upon such financial reporting
treatment.
NOW, THEREFORE, for good, valid and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
ARTICLE 1.
PURCHASE, SALE AND TERMS OF STOCK AND DEBT SECURITIES
1.1 Authorization. Immediately prior to the effectiveness of the
Closing, the Company shall have (i) authorized (x) the filing of the Amended and
Restated Certificate of Incorporation of the Company, in a form reasonably
acceptable to Holdings and Investor (the "Amended Certificate"), and such
Amended Certificate shall be duly filed by the Company on or prior to the
Effective Date and shall be in full force and effect under the laws of the State
of Delaware as of the Effective Date, (y) the adoption of Amended and Restated
Bylaws of the Company, in a form reasonably acceptable to Holdings and Investor
(the "Amended Bylaws"), and the Amended Bylaws shall be in full force and effect
under the laws of the State of Delaware as of the Closing, (ii) the issuance and
sale of the Purchase Shares to the Investor, (iii) the issuance and sale of high
yield debt or preferred securities pursuant to the Rule 144A Offering, and (iv)
the redemption of the Redemption Shares from Holdings.
1.2 Sale of Company Common Stock. At 11:59 p.m. on the Effective Date,
subject to the terms and conditions of this Agreement, the Company shall issue
to Investor, and Investor shall purchase, shares of Company Common Stock, or,
upon the request of Investor, a combination of Company Common Stock and
preferred stock of the Company having rights, preferences and designations
requested by Investor ("Designated Preferred Stock"), for an aggregate purchase
price of between $20,700,000 and $29,700,000, as determined by the Investor
(such finally determined price, the "Equity Purchase Price"); provided that this
Section 1.2, in conjunction with Section 1.3, shall result in Investor owning
90% of the Company Common Stock and Designated Preferred Stock, if any,
outstanding immediately following the Recapitalization; provided further that
any transfer pursuant to this Section 1.2 to the Investor of shares of Company
Common Stock or Designated Preferred Stock, shall be made with certificates
which shall be delivered on the Closing Date.
1.3 Stock Redemption. At the 11:59 p.m. on the Effective Date, subject
to the terms and conditions set forth in this Agreement, Holdings agrees that it
shall offer for redemption, and the Company shall redeem from Holdings, the
Redemption Shares. The price (the "Unadjusted Redemption Price") which the
Company shall pay to Holdings for the Redemption Shares shall equal $117,480,909
minus the sum of (x) the aggregate amount of the Adjustment Liabilities and
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<PAGE> 9
(y) the lesser of (i) 1/9 of the Equity Purchase Price, and (ii) $3,750,000. In
the event that the Company issues to Investor shares of Designated Preferred
Stock pursuant to Section 1.2, a number of the shares of Company Common Stock
held by Holdings after taking effect of the redemption described in Section 1.3
shall be converted or exchanged for shares of Designated Preferred Stock so that
Holdings will have the same ratio of shares of Company Common Stock to shares of
Designated Preferred Stock as Investor has immediately after any issuance
pursuant to Section 1.2; provided that this Section 1.3, in conjunction with
Section 1.2, shall result in Holdings owning 10% of the Company Common Stock and
Designated Preferred Stock, if any, outstanding immediately following the
Recapitalization; provided further that any transfer pursuant to this Section
1.3 to the Company or Holdings of shares of Company Common Stock or Designated
Preferred Stock, shall be made with certificates which shall be delivered on the
Closing Date.
1.4 Redemption Price Adjustment.
1.4.1 Adjustment Statement. As soon as reasonably practicable,
but not later than sixty (60) days after the Closing Date, NPC Group shall
deliver to Investor (i) the Closing Balance Sheet and (ii) a statement prepared
in accordance with Schedule 1.4.1 (the "Adjustment Statement"). Within thirty
(30) days after receipt of the Adjustment Statement, Investor shall inform NPC
Group in writing either (a) that the Adjustment Statement is acceptable to
Investor or (b) that Investor objects to the Adjustment Statement, which
objection, if any, shall set forth in reasonable detail Investor's objections
and the basis for those objections (an "Objection Notice"). If Investor so
objects, and Investor and NPC Group do not resolve such objections on a mutually
agreeable basis within ten (10) business days after NPC Group's receipt of the
Objection Notice, the disagreement shall be resolved within an additional period
of ten (10) business days by an independent, nationally recognized "big six"
accounting firm reasonably acceptable to Investor and Holdings (the "Independent
Firm"). If the Investor and Holdings cannot agree on the Independent Firm, each
of Investor and Holdings shall be entitled to exclude one of the "big six" firms
and the Independent Firm shall be chosen randomly by counsel to Investor and NPC
Group from the remaining "big six" firms. The decision of the Independent Firm
shall be final and binding upon Investor and NPC Group. Upon the agreement of
Investor and NPC Group or the decision of the Independent Firm, or if Investor
fails to deliver an Objection Notice to NPC Group within the first thirty (30)
day period provided above, the Adjustment Statement (as adjusted, if applicable,
by the agreement of Investor and NPC Group or the decision of the Independent
Firm) shall be deemed final. Investor and NPC Group each shall bear the fees,
costs and expenses of its own accountants, shall share equally the fees, costs
and expenses of the Independent Firm and shall permit each other and each
other's accountants access to the books and records reasonably necessary to
prepare the Adjustment Statement.
1.4.2 Post-Closing Adjustment Procedure. Upon the Adjustment
Statement being deemed final in accordance with Section 1.4.1, the Unadjusted
Redemption Price shall be adjusted, up or down, as applicable, in an amount
equal to the Adjustment Amount set forth on the Adjustment Statement (as so
adjusted, the "Adjusted Redemption Price"). To the extent that
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<PAGE> 10
the Adjusted Redemption Price exceeds the Unadjusted Redemption Price, the
Company shall pay to Holdings the difference between such amounts, and to the
extent that the Unadjusted Redemption Price exceeds the Adjusted Redemption
Price, Holdings shall pay to the Company the difference between such amounts.
Any payment required under this Section 1.4.2 shall be made by wire transfer of
immediately available funds to the account specified by the party entitled to
payment within five (5) business days after the date on which the Adjustment
Statement is deemed final in accordance with Section 1.4.1.
1.4.3 Payments Relating to Damaged Restaurant and Certain
Franchised Restaurants.
(a) If the Lease with respect to the New Restaurant and the
real estate upon which it sits shall have been extended or redone on
terms reasonably acceptable to Investor, including an extension or
extensions, or a new term, which shall be at least 15 years in length
(including any renewals or extensions which are exercisable at the sole
option of the Company), upon the opening to the public for business of
the New Restaurant (the "Business Commencement Date"), the Company
shall pay to Holdings $1,000,000.
(b) As soon as practicable following the end of the 12
consecutive full Fiscal Periods of the Company commencing three full
Fiscal Periods following the Business Commencement Date, the Company
shall determine the EBITDA of the New Restaurant during such twelve
Fiscal Periods (the "New Restaurant EBITDA"). If the New Restaurant
EBITDA exceeds $140,252, then the Company shall, within 45 days after
the end of the twelfth such Fiscal Period, pay to Holdings an amount
equal to the sum of (i) the product of such excess multiplied by 7.13
(such product, the "Variable Amount"), provided that the Variable
Amount shall not exceed $683,000, plus (ii) a cost of capital in the
amount of 9 percent per annum of the Variable Amount, computed from the
Business Commencement Date to the date of payment of the amounts due
pursuant to this Section 1.4.3.
1.4.4 As soon as practicable, but not later than 30 days after
the end of the twelfth full Fiscal Period referred to in clause (b) of Section
1.4.3, the Company shall pay to Holdings the product of (i) 7.13 multiplied by
(ii) the Earnings Amount, which product shall not exceed $3,336,091. The
"Earnings Amount" shall equal (A) the sum of (x) the aggregate EBITDA of the
Owned Restaurants during the first 12 consecutive full Fiscal Periods after the
Closing Date (the "Test Period"), plus (y) the aggregate gross royalties earned
by the Company with respect to the Domestic Franchise Restaurants (net of
reasonable reserves for uncollectible franchise royalties relating to such
Domestic Franchise Restaurants) during the Test Period, plus (z) the aggregate
gross royalties earned by the Company with respect to the Foreign Franchise
Restaurants (net of reasonable reserves for uncollectible franchise royalties
relating to such Foreign Franchise Restaurants) during the Test Period, minus
(B) $4,639,375. At or prior to the payment of amounts required to be paid by
this Section 1.4.4, the Company shall deliver to Holdings a calculation of the
Earnings Amount prepared in reasonably sufficient detail to verify
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<PAGE> 11
the accuracy of the Earnings Amount. NPC Group and its agents and
representatives, may at reasonable times during normal business hours, and NPC
Group's cost, inspect, copy and audit the books and records of the Company
solely for the purpose of verifying the calculation of the Earnings Amount (and
subject to reasonable confidentiality obligations), and the Company shall, and
shall cause the Company Affiliates and their respective agents and
representatives to, reasonably cooperate with any such inspection or audit.
1.4.5 Any amounts payable by the Company to Holdings pursuant
to Sections 1.4.3 and 1.4.4 shall be added to the Adjusted Redemption Price to
equal the "Redemption Price".
1.5 Purchase and Sale of Real Estate. Company and Investor acknowledge
that NPC Group has since December 21, 1997, acquired the real estate described
on Schedule 1.5, and following the date hereof, may acquire certain other real
estate (subject to Section 5.7.2(xi)), in each case which is intended to be used
for the benefit of Company. Accordingly, NPC Group shall transfer to Company or
its designees and Company or its designees shall accept all such real estate and
the buildings, fixtures and equipment located thereon, no later than the time
the store to be located thereon is to be opened (but in no event later than nine
(9) months after the Closing), for consideration equal to the difference of (i)
the total cost thereof to NPC Group including reasonable closing costs, broker
fees and costs, appraisals, environmental audits, recording and filing fees,
reasonable attorneys fees and all other reasonable costs, fees and expenses
incurred in connection with or as a result of the purchase of such real estate
and any construction of any related buildings, fixtures and equipment minus (ii)
$1,397,480. Investor shall receive copies of any and all diligence materials,
including, but not limited to, copies of any and all appraisals and
environmental audits, at least thirty (30) days prior to the expiration of any
diligence period contingency or other contingency period referenced in the
purchase contracts for such real estate.
1.6 Letter of Credit; Capitalization Proceeds. At Closing, either (A)
the Company shall put in place for a period of 2 years, a letter of credit which
shall at any point in time be in a face amount not less than 60% of the
Company's maximum obligations under Sections 1.4.3 and 1.4.4 (but ignoring
Section 1.4.3(b)(ii)) for the benefit of Holdings to secure the Company's
obligations to Holdings under Sections 1.4.3 and 1.4.4, such letter of credit to
be held in escrow pursuant to an escrow agreement reasonably acceptable to the
Parties, provided that such escrow agreement shall contain a dispute mechanism
consistent with Section 1.4.1 pursuant to which the arbitrator or accounting
firm who settles any dispute will have final authority to direct the escrow
agent to disbuse funds under the aforementioned letter of credit, or (B) the sum
of (a) the net proceeds to the Company of the Rule 144A Offering, (b) 10/9 of
the Equity Purchase Price, (c) the net proceeds to the Company of any sale
leaseback transactions, (d) the net proceeds to the Company of any other
permanent (having at least a 2 year term) financing other than the facility
entered into pursuant to the Credit Transaction, shall exceed the sum of (x)
$117,480,000, and (y) the fees and expenses payable by the Company at Closing
pursuant to Section 13.8, by at least $2,000,000.
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<PAGE> 12
1.7 Cancellation of Intercompany Payables. Immediately prior to the
Closing, all intercompany payables owed by Company to NPC and its Affiliates
shall be contributed to the capital of the Company and become additional equity
of the Company.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP
As a material inducement to the Investor to purchase the Purchase
Shares and enter into and otherwise perform this Agreement, NPC and Holdings
jointly and severally make the following representations and warranties to
Investor:
2.1 Organization; Power and Authority. NPC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kansas. Holdings is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of NPC and Holdings has
all corporate power and authority needed to execute, deliver and perform its
obligations under this Agreement and the Related Documents and to consummate the
transactions contemplated hereby to be consummated by it.
2.2 Authorization; Execution and Validity. The execution, delivery and
performance by each of NPC and Holdings of this Agreement and the Related
Documents and the consummation by each of NPC and Holdings of the transactions
contemplated hereby and thereby to be consummated by it have been duly
authorized by all necessary corporate action. This Agreement and the Related
Documents (to which either NPC or Holdings is a party) have been duly and
validly executed and delivered by each of NPC and Holdings (as the case may be),
constitute valid and binding obligations of each of NPC and Holdings (as the
case may be) and are enforceable against each of NPC and Holdings in accordance
with their terms, except to the extent that the enforcement hereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law.
2.3 Title to Shares. Holdings owns of record and beneficially good,
valid and marketable title to the Shares, free and clear of any and all Liens,
which Shares constitute all of the issued and outstanding capital stock of the
Company. Upon the delivery of and payment for the Redemption Shares at the
Closing as provided for pursuant to the terms of this Agreement, the Company
will acquire good, valid, and marketable title to such Redemption Shares, free
and clear of any Lien.
2.4 No Conflict; NPC Group Consents. The (i) execution, delivery and
performance by each of NPC and Holdings of this Agreement and the Related
Documents and (ii) execution, delivery, and performance by each of NPC and
Holdings of the agreements, certificates, and instruments to be executed and
delivered by each of them pursuant hereto and thereto will not, (a) violate any
Law, (b) violate any Charter Document of either NPC or Holdings, (c) violate any
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<PAGE> 13
Order to which either NPC or Holdings is a party or by which it is bound or to
which the Redemption Shares are subject, (d) require any Consent from any
Governmental Authority, except for (x) compliance with the HSR Act, (y)
obtaining consents and authorizations required by applicable state and local
liquor laws, and (z) actions required to be taken by Investor or Company, (e)
breach any material Contract to which either NPC or Holdings is a party or by
which it is bound or any other Contract to which the Redemption Shares are
subject, or (f) result in the creation of any Lien on any of the Shares.
2.5 Litigation; Orders. There is no Action by any Person by or before
any Governmental Authority that is pending or, to NPC Group's Knowledge,
threatened by, against or affecting either NPC or Holdings or any of its
respective properties, assets, operations or business which would, if adversely
determined, adversely affect either NPC's or Holdings's ability to consummate
the transactions contemplated by this Agreement, nor is either NPC or Holdings
subject to any Order which would have any such effect.
2.6 Brokers. No Person (other than Schroder & Co. Inc., whose fee will
be paid by NPC Group, except for the fee payable in connection with the
financing raised by the Company and Investor in connection with the transactions
contemplated by this Agreement) is or will become entitled to receive any
brokerage or finder's fee, advisory fee or other similar payment for the
transactions contemplated by this Agreement by virtue of having been engaged by
or acted on behalf of either NPC, Holdings or the Company.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP AND COMPANY
As a material inducement to the Investor to purchase the Purchase
Shares and enter into and otherwise perform this Agreement, NPC, Holdings and
Company jointly and severally make the following representations and warranties
to Investor:
3.1 Organization; Power and Authority. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business and
own and operate its properties as now conducted, owned, and operated. Company
has all corporate power needed to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby to
be consummated by it. On or before the Effective Date, the Company will duly
adopt and cause to be filed and to become effective the Amended Certificate and
the Amended Bylaws each of which will be in effect and binding upon the Company
as of the date thereof. Schedule 3.1 indicates all jurisdictions where the
nature of the business or the nature of the location of the assets of the
Company or any Company Affiliate requires it to be licensed or qualified as a
foreign corporation (except where the failure to be so licensed or qualified
would not have a Material Adverse Effect) and each of the Company and each
Company Affiliate is so licensed or qualified and is in good standing in each
jurisdiction set forth on Schedule 3.1.
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3.2 Authorization; Execution and Validity. The execution, delivery and
performance by Company of this Agreement and each of the Related Documents to
which it is a party and the consummation by Company of the transactions
contemplated hereby and thereby to be consummated by it have been duly
authorized by all necessary corporate action. This Agreement and each of the
Related Documents to which it is a party have been duly and validly executed and
delivered by Company, constitute valid and binding obligations of Company and
are enforceable against Company in accordance with their terms, except to the
extent that the enforcement hereof or thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general principles of
equity regardless of whether enforceability is considered in a proceeding in
equity or at law.
3.3 Company Common Stock. The Company Common Stock has been duly
authorized and, when issued and delivered in accordance with this Agreement,
will be validly issued, fully paid, and nonassessable, free and clear of any
Liens other than Liens created by the Investor or as otherwise contemplated by
this Agreement.
3.4 Capitalization. The authorized, issued and outstanding capital
stock or equity interests of the Company and each of the Company Affiliates
immediately prior to the consummation of the Recapitalization is set forth on
Schedule 3.4. All of the outstanding shares of the Company Common Stock and
shares of capital stock of the Company Affiliates are validly issued, fully-paid
and non-assessable. There are no outstanding options, warrants, rights,
agreements, contracts, calls, demands of any character, transfer restrictions
(except restrictions imposed by federal and state securities laws), Liens,
rights of first offer, rights of first refusal, preemptive or other preferential
rights, stock appreciation rights, phantom stock rights, profit participation or
similar rights, antidilution provisions or commitments of any character relating
to any issued or unissued shares of capital stock or equity interests of the
Company or any Company Affiliate other than (i) pursuant to this Agreement or
the Related Documents or (ii) those that will be extinguished prior to the
Closing.
3.5 Private Sale; Voting Agreements. Subject to the accuracy of the
Investor's representations and warranties contained herein, the offer, sale, and
issuance of the Purchase Shares do not require registration under the Securities
Act or any applicable state securities laws. There are no agreements or
understandings with any Person with respect to the voting or transfer of shares
of the capital stock of the Company, except as contemplated by this Agreement.
3.6 Financial Statements.
3.6.1 Audited Financial Statements. Schedule 3.6.1 includes:
(a) audited consolidated balance sheets of Company as of March 24, 1996, March
23, 1997, and December 21, 1997, and the related audited consolidated statements
of income, retained earnings, and cash flow for the two fiscal years ended March
24, 1996 and March 23, 1997 and the 39 weeks ended December 21, 1997, together
with the notes thereto and the report thereon of Ernst & Young. The financial
statements described in the previous sentence, (i) are true, correct
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and complete in all material respects, (ii) are consistent with the books and
records of the Company and the Company Affiliates, (iii) present fairly the
financial condition, results of operations and cash flows of the Company and the
Company Affiliates as of the dates and for the periods indicated, in accordance
with GAAP, (iv) will be presented in accordance with GAAP (excluding normal
year-end adjustments in the case of the financial statements for the period
ended December 21, 1997) and (v) will reflect the application of accounting
principles consistent with prior periods subject to (ii) above.
3.6.2 Closing Balance Sheet. The unaudited consolidated
balance sheet of Company as of the Effective Date (the "Closing Balance Sheet")
to be delivered to Investor pursuant to Section 1.4 and the financial statements
described in Section 3.6.1, (i) will be true, correct and complete in all
material respects, (ii) will be prepared consistent with the books and records
of the Company and the Company Affiliates, (iii) will present fairly the
financial condition, results of operations and cash flows of the Company and the
Company Affiliates as of the dates and for the periods indicated, in accordance
with GAAP, (iv) will be presented in accordance with GAAP excluding footnotes
and normal year-end adjustments, and (v) will reflect the application of
accounting principles consistent with prior periods subject to (ii) above.
3.6.3 Liabilities. Company and the Company Affiliates have no
material liabilities, whether accrued, absolute, contingent or otherwise, of a
type required by GAAP to be included as a liability on an audited balance sheet
or described in the notes thereto of Company, other than (i) liabilities which
are reflected or reserved against in Company's most recent consolidated balance
sheet included in Schedule 3.6.1, (ii) liabilities incurred since the date of
the most recent consolidated balance sheet included in Schedule 3.6.1 in the
ordinary course of business and (iii) liabilities set forth on Schedule 3.6.3.
Except as set forth on Schedule 3.6.3, neither the Company nor any of the
Company Affiliates has any indebtedness for borrowed money as of the date
hereof.
3.7 Absence of Certain Changes. Since December 21, 1997 until the
Closing Date, and except as expressly set forth on Schedule 3.7, there has been
no event or occurrence that has had or would have a Material Adverse Effect.
Since December 21, 1997 until the Closing Date (except clauses (b) and (m) which
shall only run until the date hereof), and except as expressly set forth on
Schedule 3.7, there has been no (a) material amendment or termination of, or
failure to perform by the Company in any material respect under, any Material
Contract, Material Lease or material Permit relating to Company or any Company
Affiliate other than in the ordinary course of business, (b) material
destruction, damage or other loss to any of Company's or any Company Affiliate's
assets that is not covered by insurance, (c) sale, lease, license, assignment,
or other disposition of any of Company's or any Company Affiliate's assets
(tangible or intangible), other than assets sold, leased or otherwise disposed
of in the ordinary course of business, (d) material purchase or lease of any
assets of the Company or any Company Affiliate, other than assets purchased or
leased in the ordinary course of business, (e) incurrence or guaranty by the
Company or any Company Affiliate of any Liabilities in excess of $50,000 in the
aggregate except for Liabilities incurred in the ordinary course of business
consistent with past practices, (f) cancellation, waiver or release by the
Company or any Company Affiliate of
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any debt, claim, or right except in the ordinary course of business consistent
with past practices, (g) delay or postponement by the Company or any Company
Affiliate of the payment of the accounts payable or other Liabilities outside
the ordinary course of business, (h) issuance of any capital stock or other
equity securities of the Company or any Company Affiliate or any securities
convertible, exchangeable, or exercisable into any such capital stock or other
equity securities, (i) declaration, set aside, or payment by the Company or any
Company Affiliate of any dividend or distribution with respect to capital stock
or redemption, purchase or other acquisition by the Company or any Company
Affiliate of any capital stock, (j) occurrence of any of the material assets of
the Company or any Company Affiliate, tangible or intangible, becoming subject
to any Lien (other than any Permitted Lien) which is not to be released at
Closing, (k) capital expenditure or commitment by the Company or any Company
Affiliate, or series thereof, involving more than $100,000, individually or in
the aggregate, made outside the ordinary course of business, (l) direct or
indirect (whether through a foreign subsidiary or otherwise) commitment to
invest or investment by the Company or any Company Affiliate in, and neither the
Company nor any Company Affiliate owns, any tangible property located in any
jurisdiction other than a jurisdiction within the United States of America, (m)
write off by the Company or any Company Affiliate as uncollectible of any
accounts receivable other than in the ordinary course of business and for
amounts not greater than $25,000 individually, or $100,000 in the aggregate, (n)
loans or advances by the Company or any Company Affiliate to, guarantees for the
benefit of, or any investments in any Person, other than advances to employees
in the ordinary course of business that do not exceed $10,000 individually or
$25,000 in the aggregate and other than guarantees in the ordinary course of
business under NPC's existing loan and credit agreements, (o) payment by the
Company or any Company Affiliate to, or execution by the Company or any Company
Affiliate of, any agreement, arrangement or transaction with, any Affiliate of
the Company (including its officers, directors, or employees), other than
payroll and other compensation payments made in the ordinary course of business,
(p) other than the potential accelerated vesting of options to purchase stock of
NPC held by employees of the Company on or prior to the Closing, increase by the
Company or any Company Affiliate in the compensation of any officer or employee
or any other change in the employment terms of any officer or employee, in
either case outside the ordinary course of business, (q) material change in any
method of accounting or accounting practice of the Company or any Company
Affiliate other than as required by GAAP or Law, (r) failure to maintain any
material assets (tangible or intangible) of the Company or any Company
Affiliate, (s) entry by the Company or any Company Affiliate into any other
material transaction other than in the ordinary course of business, or (t)
agreement or commitment to take any action described in this Section 3.7.
3.8 No Conflict; Company Consents. Except as set forth on Schedule 3.8,
the execution, delivery and performance by Company of this Agreement or the
Related Documents will not (a) violate any Law, (b) violate any Charter Document
of Company, (c) violate any material Order to which Company is a party or by
which it is bound, (d) require any Consent from any Governmental Authority,
except for (i) compliance with the HSR Act, (ii) obtaining consents and
authorizations required by applicable state and local liquor laws, and (iii)
actions required to be taken by Investor; (e) breach any Material Contract,
Material Lease or material
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Permit relating to Company or any Company Affiliate, or (f) result in the
creation of any Lien on any of the Shares.
3.9 Permits; Compliance with Law. Each of the Company and the Company
Affiliates has all material Permits, franchises, and other rights reasonably
required of it to allow it to conduct its business and is not in violation of
any Order or of any Law. Except as set forth on Schedule 3.9, the business of
each of the Company and the Company Affiliates has been conducted in compliance
with all applicable Laws, except where the failure to so comply would not have a
Material Adverse Effect.
3.10 Real Property.
3.10.1 Owned Real Property. Schedule 3.10.1 lists the address
and legal description of all of the real property owned by Company and each
Company Affiliate (the "Owned Real Property"). Except as set forth in Schedule
3.10.1, Company and each Company Affiliate has good, marketable and indefeasible
fee simple title to all of its Owned Real Property, free and clear of all Liens
(other than Permitted Liens). Schedule 3.10.1 also lists all of the real
property subject to Section 1.5 which has been acquired to the date of this
Agreement.
3.10.2 Leased Real Property.
(a) Attached as Schedule 3.10.2 is a list of all leases and
subleases as currently in effect (the "Leases") for real property (the "Leased
Real Property"; the "Owned Real Property" and the "Leased Real Property"
collectively, the "Real Property") to which the Company or any Company Affiliate
is a party. Except as set forth on Schedule 3.10.2, the Company or its
applicable Company Affiliate has a good and valid leasehold interest in and to
all of the Leased Real Property, and the leasehold interest in the Leased Real
Property is not subject to any Liens (other than Permitted Liens). Each Lease is
in full force and effect and is enforceable in all material respects in
accordance with its terms. Neither the Company nor any Company Affiliate is in
material default nor are there any conditions which, with the giving of notice,
the passage of time or both, would become a material default by the Company or
any Company Affiliate under any Lease. NPC Group has previously delivered to the
Investor true and complete copies of all the Leases. Except as described on
Schedule 3.10.2, no Consent is required from the landlord under any Lease as a
result of the execution of this Agreement or the consummation of the
transactions contemplated hereby.
(b) The Real Property constitutes all of the material real
property owned or leased in connection with the business of the Company and the
Company Affiliates. Except as set forth on Schedule 3.10.2, other than the
Company, the Company Affiliates and lessors under the Leases (and any assignees
of such lessors' interests in the Leases), there are no parties in possession or
parties having any current or future right to occupy (other than such rights
held by future lessees of the Leased Real Property which do not allow such
lessees any right to occupy any such Leased Real Property at least until the
term of the applicable Leases and any extension period thereof shall have
expired) any of the Real Property. The material Real Property is in a
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condition and repair sufficient and appropriate for the conduct of the business
of the Company and the Company Affiliates. The Real Property and all
improvements located thereon conform in all material respects to all building,
zoning and other laws, ordinances, rules and regulations which are applicable to
the Company or the Company Affiliates. There exists no material violation of any
covenant, condition, restriction, easement, agreement or order affecting any
portion of the Real Property. All improvements located on the Real Property have
access to a public road from such Real Property. No such improvements encroach
on land not included in the Real Property. There is no pending or, to NPC
Group's Knowledge, threatened condemnation proceeding affecting any portion of
the Real Property. There are no outstanding options or rights of first refusal
with respect to the purchase or use of any of the Owned Real Property, any
portion thereof or interest therein. Except as contemplated by Section 1.5, and
other than the leases of the Leased Real Property, neither the Company nor any
of the Company Affiliates is obligated to purchase or lease any real property.
3.11 Personal Property.
3.11.1 Owned Personal Property. Company and the Company
Affiliates have and will have immediately prior to the Closing, good and
marketable title to, or a valid leasehold interest in, all of the personal
property used in the conduct of Company's business (other than hardware,
software, network equipment, books and records, contract rights and certain
other assets relating primarily to NPC's business and the administrative
services provided by NPC Management, Inc. but used by or for the benefit of
Company), wherever located, free and clear of all Liens, other than Permitted
Liens. Such assets and properties, taken as a whole, are free from any material
defects, have been maintained in accordance with normal industry practice, are
in an operating condition and repair (subject to normal wear and tear) adequate
and suitable for the purposes for which such assets and properties are presently
used.
3.11.2 Leased Personal Property. Schedule 3.11.2 lists
personal property leased to Company and each Company Affiliate (the "Leased
Personal Property") pursuant to a Material Lease. All such Material Leases of
Leased Personal Property are valid and binding and in full force and effect in
all material respects. Since December 21, 1997, there has been no material
breach of any such Material Lease by Company or any Company Affiliate, or, to
NPC Group's Knowledge, any other Person. The Leased Personal Property, taken as
a whole, is free from any material defects, has been maintained in accordance
with normal industry practice and is in an operating condition and repair
(subject to normal wear and tear) adequate and suitable for the purposes for
which it is presently used.
3.12 Suppliers. Schedule 3.12 lists, as of December 31, 1997, each of
the ten largest suppliers or third-party contractors of the Company and the
Company Affiliates based on prior twelve month purchases from such suppliers or
obligations to such third-party contractors ("Material Suppliers"). Except as
listed on Schedule 3.12, (i) no single supplier or third-party contractor is
materially important to the business of the Company or any Company Affiliates,
(ii) no Material Supplier has canceled or otherwise terminated, or, to NPC
Group's knowledge, threatened to cancel or otherwise terminate, its relationship
with the Company or any Company
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Affiliates or has during the last 12 months decreased materially, or to NPC
Group's Knowledge threatened to decrease or limit materially, its services,
supplies, or materials to the Company or any Company Affiliates, and (iii) to
the NPC Group's Knowledge, no supplier or third-party contractor has taken any
action that would have a material adverse effect on the quality of the goods
that it supplies to the Company or any Company Affiliates. To NPC's Knowledge as
of the date hereof, the consummation of the Recapitalization will not have a
material adverse effect on the relationship of the Company or any Company
Affiliates with any such supplier or third-party contractor.
3.13 Contracts.
(a) Set forth on Schedule 3.13(a) is a list of each agreement to which
the Company or any of the Company Affiliates is a party or by which the Company
or any of the Company Affiliates is bound (a complete and correct copy or, if
oral, a description of each of which has been delivered to the Investor) (the
"Material Contracts"):
(i) for the lease of personal property from or to third
parties providing for annual lease payments to any single lessor or from any
single lessee in excess of $25,000;
(ii) for the purchase, distribution or sale of supplies,
products or other personal property or for the furnishing or receipt of
information or services, in each case that is not terminable within one year and
involves more than $25,000;
(iii) relating to the acquisition by the Company or any of the
Company Affiliates of any entity or all or substantially all of the assets of
any Person;
(iv) under which it has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) indebtedness or pursuant
to which a Lien (other than a Permitted Lien) is or may be imposed on any of its
tangible or intangible assets (other than any such agreement, arrangement or
understanding which is being terminated at or prior to Closing);
(v) for the license of Intellectual Property or the payment of
royalties (whether as licensee or licensor or payor or payee) or any other
agreement providing in whole or in part for the use of, or limiting the use of,
any Intellectual Property;
(vi) concerning confidentiality or secrecy other than those
agreements which would not prevent the disclosure of any agreement or fact, in
either case that is, required to be disclosed by Regulation S-K promulgated by
the SEC in connection with the filing of a registration statement filed under
the Securities Act or a report filed under the Exchange Act.
(vii) purporting to limit the right of the Company or any of
the Company Affiliates to compete in any line of business, with any Person or in
any geographic area other than franchise agreements and development agreements
entered into by the Company in the ordinary course of its business;
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(viii) with any director, officer, employee, or other
Affiliate of the Company or any Company Affiliate (including any involving
employment or severance) or any of their respective Affiliates;
(ix) relating to indemnification obligations in favor of any
Person;
(x) under which is created any restriction on the ability of
the Company or any of the Company Affiliates to (a) pay dividends or make
similar distributions, (b) make loans or advances to any Person, or (c) sell,
lease, or transfer any of their respective properties or assets, except in each
case for Permitted Liens, or any instrument governing any outstanding debt of
the Company or pursuant to which the Company must maintain or not violate any
financial covenant (other than any such Lien combining any such restrictions
which are terminated on or prior to Closing);
(xi) the consequences of a default or termination of which
would have a Material Adverse Effect not otherwise set forth on Schedule
3.13(a), Schedule 3.10.1 or Schedule 3.10.2;
(xii) otherwise involving the receipt or expenditure of more
than $100,000 or not entered into in the ordinary course of business;
(xiii) for the purchase or sale of real property, any business
or line of business or for any merger or consolidation, other than the
agreements contemplated by Section 1.5;
(xiv) relating to joint ventures or partnerships; or
(xv) otherwise material to the business of the Company or any
of the Company Affiliates taken as a whole.
None of the foregoing representations and warranties shall be deemed to
have been breached by virtue of the entry of the Company or the NPC Group into
this Agreement or any of the Related Documents or the consummation of the
transactions contemplated in this Agreement or any of the Related Documents.
(b) Except as set forth on Schedule 3.13(b), neither the Company nor
any Company Affiliate is in material default, nor, to the NPC Group's Knowledge,
is there any basis for any valid claim of material default, and no event has
occurred which, with notice or lapse of time, would constitute a material
default, under any agreement, arrangement, or understanding required to be set
forth on Schedule 3.13(a) and, except as set forth on Schedule 3.13(b), to the
NPC Group's Knowledge, no other Person is in material default under any such
agreement. No defaults set forth on Schedule 3.13(b), either individually or in
the aggregate, would have a Material Adverse Effect.
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3.14 Litigation; Orders. Except as set forth on Schedule 3.14,
there is no materially adverse Action that is pending or, to NPC Group's
Knowledge, threatened against or affecting (a) Company, (b) any Company
Affiliate, (c) any of the assets or properties of the Company or any Company
Affiliate, (d) any officers or directors of Company or any Company Affiliate
(which Action arose out of or relates to such officers' or directors' position
with the Company or any Company Affiliate), or (e) any of the Shares. Except as
set forth on Schedule 3.14, Company and the Company Affiliates are not subject
to any materially adverse Order. To the NPC Group's Knowledge, there is no basis
for any such Action or Order described in this Section 3.14.
3.15 Environmental Laws.
3.15.1 Compliance. None of the Real Property, the Company or
any Company Affiliate has failed to (a) comply with any Environmental Law, (b)
maintain in effect and comply with any Permit required by any Environmental Law,
or (c) comply with any consent agreement or Order to which it is a party or by
which it is bound that relates to any Environmental Law. Schedule 3.15.1 sets
forth all of the material Permits required for the conduct of Company's business
by any Environmental Law and consent agreements and Orders to which Company and
each Company Affiliate is a party or by which Company and each Company Affiliate
is bound that relate to any Environmental Law. There is no pending or, to NPC
Group's Knowledge, threatened material Action against NPC Group, Company or any
Company Affiliate or the Owned Real Property related to any Environmental Law.
No underground storage tanks or asbestos-containing material in any form or
condition are located on or under the Real Property. Neither Company nor any
Company Affiliate has treated, stored, disposed of, arranged for or permitted
the disposal of, transported, handled, or released any substance, including
without limitation any hazardous substance, or owned or operated the Real
Property or any other property or facility (and no such property or facility is
contaminated by any such substance) in a manner that has given or would give
rise to liabilities, or any investigative, corrective or remedial obligations,
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA") or any other Environmental Laws. NPC Group
has provided to Investor copies of all environmental, health and safety audits,
assessments, analyses, and reports, and any other documents materially bearing
on environmental liabilities or obligations of Company or the Company
Affiliates, which are in the possession of NPC Group.
3.15.2 Exclusivity. Except as set forth in this Section 3.15,
NPC Group and Company make no express or implied representation or warranty in
this Agreement concerning environmental matters.
3.16 Intellectual Property.
3.16.1 Owned Intellectual Property. Schedule 3.16.1 sets forth
a true and complete list of all patented, registered or applied for Intellectual
Property. Except as set forth on Schedule 3.16.1, (a) Company or the applicable
Company Affiliate owns all right, title and interest in and to, or has a valid
and enforceable right to use, all Intellectual Property owned or
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used by the Company or any Company Affiliates, and such Intellectual Property is
all of the Intellectual Property which is necessary for the operation of the
respective businesses of the Company and the Company Affiliates as each is
currently conducted, (b) Company has an absolute right to use the Intellectual
Property owned or used by the Company or the Company Affiliates, (c) to NPC
Group's Knowledge, Company and the Company Affiliates have not infringed or
misappropriated any Intellectual Property of any other Person and no
infringement, or misappropriation will occur as a result of the continued
operation of the respective businesses of the Company and the Company Affiliates
as currently conducted, (d) as of the date hereof no material Action is pending
or, to NPC Group's Knowledge, threatened asserting any such infringement or
misappropriation with respect to Intellectual Property of any other Person by
Company or any Company Affiliate, (e) the Company and the Company Affiliates
have taken reasonable measures to maintain the confidentiality of the processes
and formulae, research and development results and other know-how and trade
secrets of the Company and the Company Affiliates, the value to which to the
Company and the Company Affiliates is contingent upon maintenance of the
confidentiality thereof, (f) no claim by any Person contesting the validity,
enforceability, use or ownership of any of the Intellectual Property owned or
used by the Company or the Company Affiliates has been made, is currently
outstanding or to NPC Group's Knowledge, is threatened, and, to NPC Group's
Knowledge, there are no grounds for the foregoing.
3.16.2 Licenses; Infringement. Other than over-the-counter
licenses with a value of less than $1,000, Schedule 3.16.2 sets forth a true and
complete list of all licenses and other agreements for Intellectual Property
which are owned or used by Company and the Company Affiliates, including,
without limitation, software licenses ("Material Licensed Intellectual
Property"). All such agreements and licenses are valid and in full force and
effect in all material respects and neither the Company nor any of the Company
Affiliates is in breach of any of the terms of such licenses and agreements.
There is no pending or, to NPC Group's Knowledge, threatened Action against
Company or any Company Affiliate contesting its rights to or the validity of any
Material Licensed Intellectual Property and to NPC Group's Knowledge no basis
therefor exists.
3.17 Unions. Except as set forth on Schedule 3.17, since December 21,
1997, no executive of the Company or any Company Affiliate and no group of
employees of the Company or any Company Affiliate, has terminated, or to the NPC
Group's Knowledge, plans to terminate, employment with the Company or any
Company Affiliate. There are no collective bargaining or other labor union
agreements applicable to any Employees or by which the Company or any Company
Affiliate is bound. As of the date hereof, no work stoppage, material grievance,
material claim of unfair labor practice, or dispute against Company or any
Company Affiliate has occurred within the past five (5) years, is pending or, to
NPC Group's Knowledge, threatened, and to NPC Group's Knowledge there is no
basis for any of the foregoing. To NPC Group's Knowledge, there is no
organizational activity being made or threatened by or on behalf of any labor
union with respect to any employees of Company or any Company Affiliate. Set
forth on Schedule 3.17 is a list of (i) all agreements between the Company or
any of the Company Affiliates and any employee thereof, and (ii) any bonus or
special payment obligation of the
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Company or any Company Affiliate payable in connection with the sale,
acquisition, or change of control of the Company or any Company Affiliate. The
executive employees of Company and the Company Affiliates as of the date hereof
are set forth on Schedule 3.17 and are deemed for purposes of this Agreement
"Key Employees". Schedule 3.17 sets forth the current rate of base compensation,
title, and years of service of each of the Key Employees.
3.18 Employee Benefits.
3.18.1 Employee Benefit Plans. Schedule 3.18.1 lists, as of
the date hereof, each written pension, retirement, profit-sharing, deferred
compensation, bonus, incentive, performance, stock option, stock appreciation,
phantom stock, stock purchase, restricted stock, medical, hospitalization,
vision, dental or other health, life, disability, severance, termination or
other employee benefit plan, program, arrangement, agreement or policy
(including each ERISA Plan) which currently covers any Employee (each, an
"Employee Benefit Plan"). Each Employee Benefit Plan complies in all material
respects, and has been operated and administered in all material respects, in
accordance with all applicable requirements of all Laws, including ERISA and the
Code, and no "reportable event", "prohibited transaction" (as such terms are
defined in ERISA and the Code, as applicable) or termination has occurred with
respect to any Employee Benefit Plan. Each Employee Benefit Plan intended to
qualify under Section 401(a) of the Code has received a ruling or determination
letter concluding that such Employee Benefit Plan so qualifies, and to NPC
Group's Knowledge, no event has occurred, amendment been adopted or action been
taken that would cause such Employee Benefit Plan to lose its qualified status.
The Company, from and after the Closing Date, will have no obligation or
liability with respect to any Employee Benefit Plan. No Employee Benefit Plan is
a defined benefit plan subject to Title IV of ERISA or Section 412 of the Code.
3.18.2 Records. Company has made available to Investor copies
of each Employee Benefit Plan and any amendments thereto and any related trust
agreement, funding agreement and insurance contract relating thereto and, if
applicable, the summary plan description currently in effect for each Employee
Benefit Plan, and all material modifications thereto.
3.18.3 Actions. As of the date hereof, there are no Actions
pending (other than routine claims for benefits) or, to NPC Group's Knowledge,
threatened, with respect to any Employee Benefit Plan.
3.18.4 Funding. All contributions required by applicable Law
or the Employee Benefit Plan to be made by Company to an Employee Benefit Plan
have been made within the time prescribed by the applicable Law or Employee
Benefit Plan.
3.18.5 Multiemployer Plans and Multiple Employer Plans. Except
as set forth in Schedule 3.18.5, (a) no Employee Benefit Plan is a "multiple
employer" plan within the meaning of Section 4063 or 4064 of ERISA, (b) no
Employee Benefit Plan is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA or other applicable employee benefit legislation, (c)
Company does not have either primary or secondary liability under the provisions
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of Section 4204 of ERISA or any agreement entered into in accordance with the
provisions of that Section and (d) Company has not (i) engaged in any
transaction that could result in the imposition of any material liability
pursuant to Section 4069 or 4212 of ERISA or (ii) incurred any material
liability under or pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, and no event or
condition exists with respect to Company that may result in the imposition of
any material liability with respect to Investor pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to Employee
Benefit Plans.
3.19 Tax Matters.
3.19.1 Taxes. All federal, state and local Tax returns
(including returns related to income tax withholding), reports, declarations,
information return or statement and forms, including any schedule or attachment
thereto ("Returns") relating to Company or any combined, consolidated,
affiliated or unitary tax group of which Company is or has been a member (an
"Affiliated Group") that were required to be filed prior to the date hereof have
been accurately prepared in all material respects and timely filed. Except for
Taxes that are being contested in good faith and by appropriate proceeding, the
following Taxes have been duly and timely paid: (a) all Taxes shown to be due on
the Returns; and (b) all deficiencies and assessments for any material amount of
Taxes that are or would become payable by NPC Group or the Company or any
Company Affiliate or chargeable as a Lien upon any of Company's assets.
3.19.2 None of the NPC Group, the Company or any Company
Affiliate currently is the beneficiary of any extension of time within which to
file any Return. To the NPC Group's Knowledge, no claim has been made by a
Governmental Authority within the last three years in a jurisdiction where NPC
Group, the Company or any Company Affiliate does not file Returns that the
company so not filing is or may be subject to taxation by that jurisdiction.
Schedule 3.19.2 lists all federal, state, local, and foreign income Returns
filed with respect to any of the Company and any Company Affiliate for taxable
periods ended on or after December 31, 1994, indicates those Returns that have
been audited, and indicates those Returns that currently are the subject of
audit or any administrative or judicial proceeding. The NPC Group has delivered
to the Investor correct and complete copies of the portion of all federal income
Returns directly relating to the Company or any Company Affiliate, and copies of
the portion of the examination reports, and statements of deficiencies assessed
against or agreed to by any of the Company or any Company Affiliate since
December 31, 1994, directly relating to the Company or Company Affiliate. For
any return filed by or with respect to the Company or any Company Affiliate, no
statute of limitations for a taxable period ending on or before December 31,
1994 remains open and there are no audits, or administrative or judicial
proceedings pending relating to such period.
3.19.3 None of NPC Group, the Company or any Company Affiliate
has waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
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3.19.4 None of the Company nor any Company Affiliate has filed
a consent under Code Section 341(f) concerning collapsible corporations. None of
the Company nor any Company Affiliate has made any payments, is obligated to
make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Code Section 280G. Since June 8, 1993, the Company has not been a member
of an affiliated group filing a consolidated federal income tax Return other
than a group the common parent of which is NPC and, since the later of the date
the Company was acquired by NPC or the date a Company Affiliate was acquired by
the Company, no Company Affiliate has not been a member of an affiliated group
filing a consolidated federal income tax Return other than a group the common
parent of which is NPC. None of the Company nor any Company Affiliate has any
liability for Taxes of any other Person other than of the Company and the
Company Affiliates as a transferee or successor.
3.19.5 The unpaid Taxes of the Company and each Company
Affiliate (A) do not exceed the reserve for Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the December 21, 1997 balance
sheet (rather than in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time and the occurrence of events through the
Closing Date in accordance with the past custom and practice of the Company and
the Company Affiliates in filing their Returns.
3.19.6 None of the Company nor any Company Affiliate will be
required to make an adjustment to taxable income under Code Section 481 (or any
similar provision of state, local, or foreign law) for any period ending on or
after the Closing Date by reason of a voluntary change in accounting method
initiated by any or any similar provision of state, local, or foreign law) of
the Company or any similar provision of state, local, or foreign law) or any
Company Affiliate on or prior to the Closing Date and neither the Internal
Revenue Service nor any other governmental authority has initiated or proposed
any such change in accounting method.
3.19.7 None of the Company nor any Company Affiliate is a
"controlled foreign corporation" within the meaning of Code Section 957.
3.19.8 Except as set forth in Schedule 3.19.8, none of the
Company nor any Company Affiliate owns an interest in an entity either treated
as a partnership or whose separate existence is ignored for federal income tax
purposes.
3.20 Brokers. No person (other than Schroder & Co. Inc., whose fee
payable in connection with the financing raised by the Company and Investor in
connection with the transactions contemplated by this Agreement will be paid by
Company) is or will become entitled to receive any brokerage or finder's fee,
advisory fee or other similar payment from Company for the transactions
contemplated by this Agreement by virtue of having been engaged by or acted on
behalf of Company.
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3.21 Powers of Attorney. There are no material outstanding powers of
attorney executed on behalf of the Company or any of the Company Affiliates.
3.22 Guaranties. Except in connection with the collection of bank
deposits and instruments in the ordinary course of business and guarantees that
are to be released as of the Closing Date, neither the Company nor any of the
Company Affiliates is a guarantor or is otherwise liable for any Liability
(including indebtedness for borrowed money) of any other Person.
3.23 Transactions With Affiliates. Other than the Transitional
Financial and Accounting Services Agreement, neither the Company nor any Company
Affiliate has entered into any agreement, arrangement, or transaction with any
of their respective Affiliates other than the Company or Company Affiliates
within the past twelve months, and none of their respective Affiliates owns any
asset, property, or right, tangible or intangible, that is used in the Company's
business that is not to be released or terminated as of the Closing Date.
3.24 Insurance. Set forth on Schedule 3.24 is a list and summary
description of all policies (including scope, duration and amount of coverage)
of fire, liability, product liability, worker's compensation and other forms of
insurance currently in effect with respect to the Company, the Company
Affiliates and their business and assets. Neither the Company nor any of the
Company Affiliates is in default with respect to its material obligations under
any insurance policy maintained by it, and neither the Company nor any of the
Company Affiliates has been denied insurance coverage. To the NPC Group's
Knowledge, the insurance coverage of the Company and the Company Affiliates
covers risks of such types and in such amounts as are customary for corporations
of similar size engaged in similar lines of business. Except as set forth on
Schedule 3.24, the Company and the Company Affiliates do not have any
self-insurance or co-insurance programs.
3.25 Franchise Matters.
3.25.1 Offering Circular; Compliance with Franchise Laws.
(a) The Company has previously delivered, or made available,
to the Investor true and correct copies of the Uniform Franchise
Offering Circular ("Circular") of the Company or any Company
Affiliates, listed on Schedule 3.25.1(a), in use in the offer and sale
by the Company or any Company Affiliates of franchise and area
development rights pursuant to the Franchise Agreements, which are
required to be delivered by the Company or any Company Affiliates to
prospective Franchisees in the United States pursuant to the Rules and
Regulations of the Federal Trade Commission (the "Rules") or state law
including, without limitation, franchise investment laws, franchise
registration and disclosure laws, business opportunity laws, and seller
assisted marketing plan laws (the "Franchise Laws"). The Circular
complies in all material respects with the requirements of the Rules
and applicable Franchise Laws and does not contain any untrue statement
of
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a material fact or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances in which they
were made, not misleading.
(b) The Company has previously made available to the Investor
true and correct copies of all 1997 renewal applications containing the
Circular, as set forth in Schedule 3.25.1(b), required to be filed with
the appropriate state authorities in those states where (i) such
filings are required for the sale by the Company or any Company
Affiliates of franchises or franchise area development rights or (ii)
franchise area development rights or franchise rights have been offered
for sale by the Company or any Company Affiliates prior to the date
hereof. Except as set forth on Schedule 3.25.1(b), each current renewal
application has been declared effective in all jurisdictions where the
Company or any Company Affiliates are required to file such
applications, and there are no stop orders or other proceedings in
effect or threatened, which would prohibit or impede the ability of the
Company or any Company Affiliates to sell franchise area development
rights or franchises in such jurisdictions.
(c) The Company and the Company Affiliates have sold or
solicited the sale of franchises and franchise area development rights
only in compliance with all applicable laws governing such activity,
except where the failure to comply would not have a Material Adverse
Effect. Except as set forth on Schedule 3.25.1(c), there are no Actions
pending or threatened which allege failure to comply by the Company or
any Company Affiliates with the Rules or the Franchise Laws.
3.25.2 Franchise Agreements. The Company has made available to
the Investor all Franchise Agreements now in effect, and neither the Company nor
any Company Affiliate is in violation in any material respect of any Franchise
Agreement to which it is a party or by which it is bound.
3.25.3 Compliance with Franchise Agreements. Except as set
forth on Schedule 3.25.3, to NPC Group's Knowledge, no Franchisee is in material
violation of any term of any Franchise Agreement between the Franchisee and the
Company or any Company Affiliate and no notice of default or termination has
been delivered to any Franchisee pursuant to the terms of any Franchise
Agreement.
3.25.4 Compliance with Certain Laws. The Company and the
Company Affiliates are in compliance with and have complied at all times with
all applicable laws regulating the relationship of the Company and the Company
Affiliates with the Franchisees, except where such non-compliance would not have
a Material Adverse Effect.
3.26 Other Laws. To the NPC Group's Knowledge, neither the Company nor
any Company Affiliate has failed to (a) comply in all material respects with any
Other Law or (b) maintain in effect and comply in all material respects with any
Permit required by any Other Law.
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF INVESTOR
As a material inducement to NPC Group to offer for redemption the
Redemption Shares and to enter into and otherwise perform this Agreement,
Investor makes the following representations and warranties to NPC Group:
4.1 Organization; Power and Authority. Investor is a limited
partnership duly organized, validly existing and in good standing under the laws
of Delaware. Investor has all power needed to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby to be consummated by it.
4.2 Authorization; Execution and Validity. The execution, delivery and
performance by Investor of this Agreement and the consummation by Investor of
the transactions contemplated hereby to be consummated by it have been duly
authorized by all necessary action. This Agreement has been duly and validly
executed and delivered by Investor, constitutes a valid and binding obligation
of Investor and is enforceable against Investor in accordance with its terms,
except to the extent that the enforcement hereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law.
4.3 No Conflict; Investor Consents. The execution, delivery and
performance by Investor of this Agreement will not (a) violate any Law, (b)
violate any Charter Document of Investor, (c) violate any Order to which
Investor is a party or by which it is bound, (d) require any Consent from any
Governmental Authority except (i) to comply with the HSR Act,(ii) to obtain
consents and authorizations required by applicable state and local liquor laws,
and (iii) for actions required to be taken by NPC Group or Company, or (e)
breach any material Contract to which Investor is a party or by which it is
bound.
4.4 Litigation; Orders. There is no materially adverse Action that is
pending or, to the knowledge of Investor, threatened by, against or affecting
Investor or any of its properties, assets, operations or business which would,
if adversely determined, have a material adverse effect on Investor's ability to
consummate the transactions contemplated by this Agreement, nor is Investor
subject to any materially adverse Order which would have any such effect.
4.5 Brokers. No Person is or will become entitled to receive any
brokerage or finder's fee, advisory fee or other similar payment for the
transactions contemplated by this Agreement by virtue of having been engaged by
or acted on behalf of Investor.
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4.6 Investment Matters.
(a) Investment Intent. Investor is an "accredited investor" as defined
in Rule 501 under the Securities Act and is purchasing the Purchase Shares for
its own account for investment and not with a present view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act.
(b) Acquisition for Investment and Rule 144. Investor understands that
the Purchase Shares will not be registered under the Securities Act by reason of
a specific exemption from the registration provision of the Securities Act which
depends upon, among other things, the bona fide nature of Investor's investment
intent as expressed herein. Investor acknowledges that the Purchase Shares must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Investor has
been advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions.
(c) Legal Investment. The purchase of the Purchase Shares by Investor
is legally permitted by all applicable Law and all Consents of or designations,
declarations or filings in connection with the valid execution and delivery of
this Agreement by Investor or the purchase of the Purchase Shares by Investor
have been obtained, or will be obtained prior to the Closing Date.
ARTICLE 5.
COVENANTS OF NPC GROUP AND THE COMPANY
5.1 Cooperation by NPC Group and the Company. From the date hereof
through the Closing Date, NPC Group and the Company shall use all commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or advisable to consummate the
transactions contemplated by this Agreement and to cooperate with Investor in
connection with the foregoing, including using commercially reasonable efforts
to obtain all of the Consents and to satisfy the conditions precedent to the
obligations of any party hereto. However, neither NPC Group nor the Company
shall have any obligation to make, or cause to be made, any payment to obtain
any Consent.
5.2 Further Assurances. Subject to the other terms and conditions of
this Agreement, at any time and from time to time, whether before or after the
Closing, NPC Group and the Company shall execute and deliver all instruments and
documents and take all other action that Investor may reasonably request to
consummate or to evidence the consummation of the transactions contemplated by
this Agreement. NPC Group shall cause the Company's financial statements for the
fiscal year ended March 29, 1998 to be audited and shall deliver such audited
financial statements to Investor no later than May 15, 1998.
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5.3 Governmental Matters.
5.3.1 HSR Act Compliance. Within five (5) business days after
the date hereof, NPC Group shall file any notification required to be filed
under the HSR Act to consummate the transactions contemplated hereby, and shall
request early termination of the waiting period thereunder. NPC Group and the
Company shall use all commercially reasonable efforts to comply as promptly as
practicable with any request made pursuant to the HSR Act for additional
information. NPC Group and the Company shall cooperate with Investor in such
compliance to the extent commercially reasonable.
5.3.2 Other Governmental Approvals. NPC Group and the Company
shall comply with any other Laws which are applicable to any of the transactions
contemplated hereby and pursuant to which government notification or approval of
such transaction is necessary. NPC Group and the Company shall cooperate with
Investor in any manner reasonably requested by Investor in providing any
information about NPC Group which is required for this purpose and in promptly
filing, separately or jointly with Investor, any applications for such
government notification or approval.
5.4 Supplements to Schedules. If, to NPC Group's Knowledge, any event
occurs or condition changes that causes any of its representations or warranties
in this Agreement to be inaccurate or any of its covenants in this Agreement to
be breached, NPC Group shall notify Investor thereof in writing. NPC Group may
supplement the Schedules to account for any such event or change subject to the
consent of the Investor (which consent shall be at the sole discretion of the
Investor). If NPC Group gives written notice to Investor of any proposed
supplement to the Schedules and Investor fails to deliver a written objection to
such proposed supplement within ten (10) days of NPC Group's notice, Investor
shall be deemed to have consented to such proposed supplement.
5.5 Cooperation in Rule 144A Offering. The NPC Group and the Company
agree to use all commercially reasonable effects to assist the Investor in the
consummation of the Rule 144A Offering. Without limiting the foregoing, NPC
shall cause its Chief Financial Officer to cooperate reasonably with Company and
Investor to accomplish the foregoing. Such assistance and cooperation shall
include assisting in the preparation of the Rule 144A offering memorandum and
attending "road show" meetings prior to the Closing.
5.6 Pre-Closing Access to Information. From the date hereof through the
Closing Date, NPC Group and the Company shall afford to Investor, its
accountants and its counsel access, in a reasonable manner, upon reasonable
notice and at reasonable times, to Robert B. Page, and all of the Key Employees
(after prior notice to and consent (which consent shall not be unreasonably
withheld) by the NPC Group), properties, books and records of the Company and
shall furnish the Investor and its representatives with such financial and
operating data and other information concerning the business and properties of
the Company and the Company Affiliates as the Investor may from time to time
reasonably request (excluding information that
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is subject to attorney-client privilege, confidentiality agreements or the
disclosure of which would violate Law). Investor shall direct all requests for
information to:
Schroder & Co. Inc.
The Equitable Center
787 Seventh Avenue
New York, New York 10019
Attn: Brian Thomas
Telephone: (212) 492-7936
Facsimile: (212) 492-7033
5.7 Conduct of Business.
5.7.1 Ordinary Course. From the date hereof through the
Closing Date, Company shall, and NPC Group shall use commercially reasonable
efforts to, cause the Company and the Company Affiliates to: (a) preserve
substantially the Company's and the Company Affiliates' relationships with
suppliers, customers and Employees; (b) maintain substantially the same amounts
and kinds of existing insurance coverage; (c) perform the Company's and the
Company Affiliates' obligations under the Material Contracts and material
Permits in all material respects; (d) comply with all applicable Laws in all
material respects; and (e) carry on the Company's and the Company Affiliates'
business in the ordinary course and consistent with past practice.
5.7.2 Prohibited Actions. Unless otherwise expressly required
or expressly permitted by this Agreement, Company shall not, and NPC Group shall
use reasonable efforts to cause the Company or any of the Company Affiliates not
to, without the prior written consent of Investor:
(i) incur or guaranty any debt in excess of $50,000
in the aggregate, except in the ordinary course of business consistent
with past practices and except for the incurrence of intercompany debt;
(ii) sell, license, lease, assign or otherwise
transfer, or permit the creation of any Lien (other than a Permitted
Lien) on, any asset (whether tangible or intangible) of the Company or
any Company Affiliate, except for any assets sold, licensed, leased,
assigned or transferred, or any franchise agreement or franchise
development agreement entered into, in the ordinary course of business
consistent with past practices;
(iii) enter into any material Contract, Material
Lease or other material transaction outside the ordinary course of
business consistent with past practices;
(iv) amend or terminate any Material Contract,
Material Lease or material Permit outside the ordinary course of
business consistent with past practices;
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(v) except for customary merit, cost-of-living and
promotional increases to Employees in the ordinary course of business
consistent with past practices, increase the rate of compensation for
any Management Employee;
(vi) waive any right, forgive any debt or release
any claim, except in the ordinary course of business consistent with
past practices;
(vii) other than pursuant to the terms hereof,
issue any capital stock or other equity securities or any securities
convertible, exchangeable, or exercisable into any capital stock or
other equity securities;
(viii) other than pursuant to the terms hereof,
declare, set aside, or pay any dividend or distribution with respect to
its capital stock or redeem, purchase, or otherwise acquire any of its
capital stock;
(ix) fail to protect its interest in or to, or fail
to maintain any Intellectual Property, or other intangible asset;
(x) make capital expenditures or commitments, or
series thereof involving more than an aggregate of $100,000 outside the
ordinary course of business consistent with past practices;
(xi) purchase or lease any real estate (Investor's
consent will not be unreasonably withheld so long as any such purchase
or lease of real estate is consistent with past practices);
(xii) make any change in any method of accounting
or accounting practice, either for Tax or financial accounting purposes
except as required by GAAP or Law; or
(xiii) agree or commit (in writing or otherwise) to
take any of the actions described in Sections 5.7.2(i) through
5.7.2(xii).
5.7.3 Investor's Consent. If Company gives written notice to
Investor that Company proposes to take any action for which Investor's consent
is required under Section 5.7.2 and if Investor has not delivered to Company a
written objection to such proposed action within ten (10) days of Company's
notice, Investor shall be deemed to have consented to such proposed action.
5.8 Transfer of Stock. From the date hereof through the Closing Date,
the Company shall not, and the NPC Group shall not permit the Company or any
Company Affiliate to, record or acknowledge any sale, transfer, assignment,
pledge or other disposition of (whether with or without consideration and
whether voluntarily or involuntarily or by operation of Law) any interest in any
capital stock of the Company or any Company Affiliate.
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5.9 Non-Solicitation. Except as set forth in Schedule 5.9, in
consideration of the transactions contemplated hereby and the payment of the
Redemption Price, during the period beginning on the date of this Agreement and
ending on the second anniversary of the Closing Date (the "Non-Solicitation
Period"), neither the NPC Group nor any Affiliate of the NPC Group will directly
contact, approach or solicit for the purpose of offering employment to or hiring
(whether as an employee, consultant, agent, independent contractor or otherwise)
or, directly or indirectly, actually hire any officer or employee at, or above,
the area general manager level or its equivalent, of the Company and the Company
Affiliates (which shall include the Key Employees), or induce or attempt to
induce any customer or other business relation of the Company into any business
relationship which could reasonably be expected to materially harm the Investor
or the Company. If the final judgment of a court of competent jurisdiction
declares that any term or provision of this Section 5.9 is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability will have the power to reduce the scope or
duration of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
will be enforceable as so modified after the expiration of the time within which
the judgment may be appealed.
5.10 Real Estate. NPC Group shall use commercially reasonable efforts to
assist Investor in obtaining the following prior to Closing:
(i) Title insurance from a title insurance company selected by
the Investor (the "Title Company") insuring at standard rates the
Company's or the applicable Company Affiliate's marketable title in and to
the Owned Real Property in fee simple, the Company's leasehold estate in
any Leased Real Property believed by Investor to be financeable (a
"Financeable Leasehold") and, if required, a mortgage lien on the Owned
Real Property and each Financeable Leasehold free and clear of all Liens
(other than Permitted Liens), defects, claims, leases, rights of
possession or other encumbrances (other than the matters disclosed in
Schedule 3.10.1 and Schedule 3.10.2), including such endorsements and
affirmative coverages as Investor shall reasonably require including
without limitation non-imputation endorsements. NPC Group shall provide
all such standard form affidavits as the Title Company reasonably shall
require in order to afford such coverages.
(ii) A survey of each Owned Real Property and each Leased Real
Property to which the Company or any Company Affiliate holds a Financeable
Leasehold conforming to the Minimum Standard Detail Requirements jointly
established and approved in 1992 by ALTA and ACM certified to the Company
and the Title Company.
(iii)(A) An estoppel certificate from each landlord under a
Lease, (B) a consent to the transactions contemplated by this Agreement
from each landlord under a Lease described in Schedule 3.10.2 if and to
the extent required by the Lease, and (C)
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a nondisturbance agreement, in each case in form and substance reasonably
satisfactory to the Investor, from each mortgagee of any Leased Real
Property.
5.11 Re-building or Replacement of Damaged Restaurant. NPC and the Company
shall exercise commercially reasonable efforts to ensure that the Coral Gables
Tony Roma's restaurant (Unit Number 3013), located at 2665 SW 37th Avenue, Coral
Gables, Florida, which was damaged by fire (the "Damaged Restaurant") is either
re-built or replaced on its current site, as required under the terms of the
Lease for the Damaged Restaurant (such re-built or replaced Tony Roma's
restaurant, the "New Restaurant") and, if re-built from the remains of the
Damaged Restaurant, to at least the condition of the Damaged Restaurant
immediately prior to the fire which occurred on February 24, 1998, and, if
completely reconstructed, to at least the standards maintained in the typical
brand new Tony Roma's restaurant, and on a basis consistent with the insurance
claim made by the Company with respect to the damage incurred by the Damaged
Restaurant in connection with such fire. NPC Group and the Company shall
exercise commercially reasonable efforts to ensure that the Lease for the New
Restaurant is extended or a new Lease is entered into on terms reasonably
acceptable to Investor.
5.12 Exclusivity. Until this Agreement is terminated by its terms, NPC
Group will not (and will not cause or permit any Affiliate, director, officer,
trustee, employee, or agent of it or the Company or any Company Affiliate to),
directly or indirectly,
(i) solicit, initiate or encourage the submission of any
proposal or offer from any Person (including any of them) relating to any
(A) liquidation, dissolution or recapitalization of, (B) merger or
consolidation with or into, (C) acquisition or purchase of any material
asset (or any material portion of the assets) of, or any equity interest
in, or (D) similar transaction or business combination involving the
Company or any Company Affiliate or any assets of the Company or any
Company Affiliate (other than dispositions of obsolete or worn-out assets
which are disposed of in the ordinary course of business and dispositions
of assets which are replaced with assets of equal or greater value and
utility) and ("Sale Transaction"), or
(ii) participate in any discussions or negotiations regarding,
furnish any information (other than information which is traditionally
provided in the ordinary course of the Company's or any Company
Affiliate's business to third parties where NPC Group has no reason to
believe that such information may be used to evaluate a possible Sale
Transaction) with respect to, assist or participate in, or facilitate in
any other manner any effort or attempt by any other Person to do or seek a
Sale Transaction;
Until this Agreement is terminated by its terms, NPC Group and the Company will
notify the Investor if any Person makes any proposal or offer with respect to
any of the foregoing and will provide the Investor with reasonable detail
regarding such offer.
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5.13 Confidentiality. From the date hereof NPC Group (and NPC Group will
cause its Affiliates to comply with this Section 5.13 as well) shall treat and
hold as confidential, shall not disclose, and shall refrain from using, any
Confidential Information except as expressly permitted under this Agreement
(other than disclosures of Confidential Information which is not Intellectual
Property and which NPC Group reasonably determines is necessary or advisable to
disclose to satisfy its disclosure obligations under applicable securities
laws). In the event that NPC Group is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, NPC Group will notify Investor promptly of the request
or requirement so that Investor may seek an appropriate protective order or
waive compliance with the provisions of this Section 5.13. If, in the absence of
a protective order or the receipt of a waiver hereunder, NPC Group, on the
advice of counsel, is compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, NPC Group may disclose the
Confidential Information to the tribunal; provided, that NPC Group shall use its
best efforts to obtain, at the reasonable request of Investor, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as Investor shall designate.
5.14 Termination of Agreements. At the request of Investor, NPC Group
shall, and NPC Group will cause its Affiliates to, use reasonable efforts to
take such actions that would cause the first, second and fifth agreements listed
under clause (viii) of Schedule 3.13 to have no further force and effect after
the Effective Date, including, if reasonable, the termination of such
agreements.
ARTICLE 6.
COVENANTS OF INVESTOR
6.1 Cooperation by Investor. From the date hereof through the Closing
Date, Investor shall use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
advisable to consummate the transactions contemplated by this Agreement and to
cooperate with NPC Group and Company in connection with the foregoing, including
using commercially reasonable efforts to obtain all of the Consents and the
Releases and to satisfy the conditions precedent to the obligations of any party
hereto.
6.2 Pre-Closing Access to Information. Investor shall comply with the
limitations on the disclosure and use of information set forth in the
Confidentiality Agreement with respect to the information that NPC Group and
Company provide to Investor in and pursuant to this Agreement. Investor shall
not contact any Employee or conduct any soil, groundwater or other environmental
sampling in connection with the transactions contemplated hereby without the
prior consent of NPC.
6.3 Further Assurances. Subject to the other terms and conditions of this
Agreement, at any time and from time to time, whether before or after the
Closing, Investor shall execute and deliver all instruments and documents and
take all other action that NPC Group may request, to
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the extent commercially reasonable, to consummate or to evidence the
consummation of the transactions contemplated by this Agreement.
6.4 Governmental Matters.
6.4.1 HSR Act Compliance. Within five (5) business days after the
date hereof, Investor shall file any notification required to be filed under the
HSR Act to consummate the transactions contemplated hereby, and shall request
early termination of the waiting period thereunder. Investor shall use all
commercially reasonable efforts to comply as promptly as practicable with any
request made pursuant to the HSR Act for additional information. Investor shall
cooperate with NPC Group in such compliance to the extent commercially
reasonable, and shall pay the statutory filing fees required by law in
connection with the filings required under the HSR Act.
6.4.2 Other Governmental Approvals. Investor shall comply with any
other Laws which are applicable to any of the transactions contemplated hereby
and pursuant to which government notification or approval of such transaction is
necessary. Investor shall cooperate with NPC Group in any manner requested by
NPC Group that is commercially reasonable in providing any information about
Investor which is required for this purpose and in promptly filing, separately
or jointly with NPC Group, any applications for such government notification or
approval. Investor shall use all commercially reasonable efforts to resolve such
objections, if any, as may be asserted by any Governmental Authority with
respect to the transactions contemplated hereby.
6.5 Notice of Breach. If at any time on or before the Closing Date,
Investor obtains any knowledge (whether through investigation or otherwise) of
any fact, condition or event constituting a breach of any representation or
warranty of NPC Group and/or Company set forth herein or any document referred
to herein, then Investor shall immediately upon obtaining such knowledge inform
NPC Group thereof and of such breach; provided that any such knowledge shall not
affect the Investor's remedies or NPC Group's indemnification obligations
hereunder or otherwise, except as expressly provided in Section 11.4.4.
6.6 The Rule 144A Offering. Investor shall use its best efforts to cause
the successful consummation of the Rule 144A Offering. Investor shall indemnify
and hold (i) NPC Group Indemnitees, (ii) NPC's Chief Financial Officer, and
(iii) Company, the Company Affiliates and their respective employees, officers,
directors and agents harmless from and against any and all Damages arising out
of their participation in or cooperation with the Rule 144A Offering (including
those activities contemplated by Section 5.5); provided, however, that Investor
shall not be required to provide indemnification for any action or omission that
constitutes gross negligence or willful misconduct. The provisions of Section
11.3 shall apply to any such indemnification. Investor shall not alter or amend
any of its or the Company's Charter Documents in any respect that would
adversely affect the rights of NPC's Chief Financial Officer or any NPC Group
Indemnitee to be indemnified and held harmless by Investor. Investor shall also
provide contribution, based upon relative fault and relative benefit, to the
Persons entitled
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to be indemnified pursuant to the second sentence of this Section 6.6, for such
Damages if such indemnification is not enforceable. Investor shall cause to be
procured at Investor's cost, as soon as practicable following the date of this
Agreement, and shall cause to be maintained at Investor's cost (provided that
such costs shall be paid or reimbursed by the Company on the Closing Date),
directors' and officers' liability insurance covering NPC's Chief Financial
Officer, only if and to the extent the Investor procures such insurance for any
officer of Investor.
6.7 Non-Solicitation. Except as approved by NPC Group and except for Alan
Salts, in consideration of the transactions contemplated hereby and the offer of
redemption of the Redemption Shares, during the Non-Solicitation Period, neither
Investor nor any Affiliate of Investor (which shall include the Company after
the Closing) will directly contact, approach or solicit for the purpose of
offering employment to or hiring (whether as an employee, consultant, agent,
independent contractor or otherwise) or, directly or indirectly, actually hire
any officer or employee at, or above, the area general manager level or its
equivalent, of NPC Group and its Affiliates (other than of the Company and
Company Affiliates). If the final judgment of a court of competent jurisdiction
declares that any term or provision of this Section 6.7 is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability will have the power to reduce the scope or
duration of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision, and this Agreement will be
enforceable as so modified after the expiration of the time within with the
judgment may be appealed.
ARTICLE 7.
MUTUAL COVENANTS
7.1 Tax Matters. The following provisions shall govern the allocation of
responsibility as between Investor and NPC Group for certain tax matters
following the Effective Date:
7.1.1 Returns for Periods Through the Effective Date. NPC Group will
include the income of the Company and each Company Affiliate (including any
deferred income triggered into income by Treas. Reg. Section 1.1502-13 and
Treas. Reg. Section 1.1502-14 and any excess loss accounts taken into income
under Treas. Reg. Section 1.1502-19) on the NPC Group consolidated federal
income Returns (and, if applicable, any consolidated, combined or unitary state
or local income Returns) for all periods concluding on or prior to the Effective
Date and pay any Taxes attributable to such income. All such Returns shall be
prepared in keeping with the Company's past custom and practice, or the past
custom and practice of the Company Affiliate, as the case may be. The Company
and each Company Affiliate will furnish Tax information to NPC Group for
inclusion in such returns for the period which includes the Effective Date in
accordance with the Company's past custom and practice unless a contrary
treatment is required by Law. The income of the Company and the Company
Affiliates will be apportioned to the period up to the Effective Date and the
period beginning on and after the Effective Date by closing the books of the
Company and each Company Affiliate as of 12:01 a.m. on the Effective Date.
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7.1.2 Tax Periods Ending on or Before the Effective Date. Except as
provided in Section 7.1.1 above, NPC Group shall prepare or cause to be prepared
and file or cause to be filed all Returns for the Company or any Company
Affiliate for all periods ending on or prior to the Effective Date which are
filed on or after the Closing Date. Company or such Company Affiliate shall
appoint Alan L. Salts as an officer for the sole purpose of executing and filing
any such Return.
7.1.3 Tax Periods Ending After the Effective Date. The Company shall
prepare or cause to be prepared and file or cause to be filed any Returns of the
Company or any Company Affiliate for Tax periods which end after the Effective
Date.
7.1.4 Cooperation on Tax Matters.
(i) Investor, the Company and each Company Affiliate and NPC
Group shall cooperate fully, as and to the extent reasonably requested by
the other party, in connection with the filing of Returns pursuant to this
Section 7.1.4 and any audit, litigation or other proceeding with respect
to Taxes. Such cooperation shall include the retention and (upon the other
party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
The Company and each Company Affiliate and NPC Group agree (A) to retain
all books and records with respect to Tax matters pertinent to the Company
and each Company Affiliate relating to any taxable period beginning before
the Effective Date until the expiration of the statute of limitations
(and, to the extent notified by Investor or NPC Group, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other
party so requests, the Company and each Company Affiliate or NPC Group, as
the case may be, shall allow the other party to take possession of such
books and records.
(ii) Investor and NPC Group further agree, upon request, to
use their best efforts to obtain any certificate or other document from
any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including,
but not limited to, with respect to the transactions contemplated hereby).
7.1.5 Tax Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving the Company or any Company Affiliate
shall be terminated as of the Effective Date and, after the Effective Date, the
Company and each Company Affiliate shall not be bound thereby or have any
liability thereunder.
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7.1.6 NPC Group Liability and Indemnity. NPC Group shall be
responsible for all Federal, state, and local income Taxes of the Company and
any Company Affiliate attributable to any taxable period for which NPC Group is
responsible to file the Returns pursuant to Sections 7.1.1 and 7.1.2 hereof
beginning prior to the Effective Date and ending on or prior to the Effective
Date. With respect to any period ending after the Effective Date for which the
Company is obligated to file pursuant to Section 7.1.3 hereof, NPC Group shall
be responsible for all state and local income Taxes of the Company and any
Company Affiliate attributable to the operations for the period ending on or
prior to the Effective Date (the "Pre-Sale period") to the extent that such
Taxes in the aggregate exceed the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing difference between book
and Tax income). The portion attributable to the Pre-Sale Period shall be
determined based upon an interim closing of the books as of the beginning of the
Effective Date. NPC Group shall indemnify Company and each Company Affiliate for
any and all income Taxes for which NPC Group is responsible pursuant to this
Section 7.1.6, as well as any liability for fees, costs and expenses (including
reasonable attorneys' fees) arising out of or incident to any proceeding before
any taxing authority or any judicial authority with respect to an amount
indemnified pursuant to this sentence. NPC Group shall pay to the applicable
governmental agency (on behalf of the Company or Company Affiliate), the Company
or Company Affiliates, as the case may be, any amount owed by NPC Group under
this Section 7.1.6 no later than the due date of the applicable Tax Return (or
if paid to the Company or Company Affiliate, no later than fifteen days prior to
such due date), or, if later, within fifteen days of receipt of notice of
liability from the Company.
7.1.7 Company Liability and Indemnity. The Company shall indemnify
the NPC Group and each member of the Company consolidated group against and hold
them harmless from any liability resulting from any Taxes of the Company or any
of its Affiliates with respect to any taxable period beginning after the
Effective Date and any liability for fees, costs and expenses (including
reasonable attorneys' fees) arising out of or incident to any proceeding before
any taxing authority or any judicial authority with respect to an amount
indemnified pursuant to this sentence.
7.1.8 Carryback of Net Operating Losses. If Company, or a Company
Affiliate, incurs a net operating loss in a taxable period beginning on or after
the Effective Date that may be carried back to a consolidated Federal income tax
Return of the NPC Group or its consolidated group, the Company or Company
Affiliate shall make an election pursuant to section 172(b)(3) of the Code (or
comparable state or local law) to relinquish the entire carryback period with
respect to any such net operating loss.
7.1.9 Carryback of Tax Attributes Which Must be Carried Back. If
Company, or a Company Affiliate, incurs a net capital loss, business credit or
other Tax attribute in a taxable period beginning after the Effective Date that
must be carried back to an NPC Group consolidated, combined or unitary Return,
Company may file a refund claim or application for adjustment only after
receiving the written consent of the NPC Group which may be unreasonably
withheld. In the event the NPC Group receives a refund (or credit against Taxes)
attributable to such claim or application, the NPC Group shall promptly pay the
Company the amount of such
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refund or credit (including any interest payable thereon by the governmental
authority or interest which would have been received from the governmental
authority if the Tax had not been credited).
7.1.10 Survival. Notwithstanding anything in this Agreement to the
contrary, the warranties and covenants of the Parties under this Section 7.1
relating to Income Taxes shall survive until the expiration of all applicable
statutes of limitation provided that the statute of limitations with respect to
the Company or Company Affiliates shall not be extended without NPC's prior
consent (which shall not be unreasonably withheld).
7.2 Books and Records.
7.2.1 Access. For a period of three (3) years after the Closing, NPC
Group and the Company shall each provide the other with commercially reasonable
access during normal business hours to its books and records relating to the
business of Company (other than books and records protected by the
attorney-client privilege, confidentiality agreements or the disclosure of which
would violate law) to the extent that they relate to the condition or operation
of the business of Company prior to the Closing and are requested by a Party to
prepare its Returns, to respond to Third Party Claims or for any other
legitimate purpose specified in writing. NPC Group and Investor shall each have
the right, at its own expense, to make copies of any such books and records.
7.2.2 Destruction. None of NPC Group, Company or Investor shall
dispose of or destroy any material books and records relating to the business of
Company to the extent that they relate to the condition or operation of the
business of Company prior to the Closing without NPC Group first offering to
turn over possession thereof to Investor, or Investor first offering to turn
over possession thereof to NPC Group, by written notice at least thirty (30)
days prior to the proposed date of disposition or destruction.
7.2.3 Confidentiality. Each of NPC Group, Company and Investor may
take such action which it deems to be commercially reasonable to separate or
redact information unrelated to the business of Company from documents and other
materials requested and made available pursuant to this Section 7.2.3 and may
condition the other Party's access to documents and other materials that it
deems confidential upon the execution and delivery of an agreement by the other
Party not to disclose or misuse such information.
7.2.4 Assistance. Each of NPC Group, Company and Investor shall,
upon receipt of a commercially reasonable request in writing and at the
requesting Party's expense, make personnel reasonably available to assist in
locating and obtaining any books and records relating to the business of Company
to the extent that they relate to the condition or operation of the business of
Company prior to the Closing and make personnel reasonably available whose
assistance, participation or testimony is reasonably required in anticipation
of, preparation for or the prosecution or defense of any Third Party Claim in
which the Party of whom the request is made does not have any adverse interest.
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7.3 Certain Consents. Prior to the Closing, each of NPC Group, Company and
Investor will use all commercially reasonable efforts and take such reasonable
actions and cooperate with each other as may be necessary to obtain all Consents
necessary to effect the transactions contemplated hereby; provided, however,
that no Party shall be required to pay or commit to pay any amount to (or incur
any obligation in favor of) any person from whom any such Consent may be
required (other than customary transfer fees and governmental filing fees which
shall be paid by Investor).
7.4 Releases. Prior to the Closing, each of NPC Group, Company and
Investor will use commercially reasonable efforts and take such commercially
reasonable actions and cooperate with the others as may be necessary to obtain
all Releases required to be obtained pursuant to this Agreement.
ARTICLE 8.
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Investor's Obligations. The obligation of
Investor to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions, any of which may be
waived in writing by Investor.
8.1.1 Accuracy of Representations and Warranties. The
representations and warranties of NPC, Holdings and Company set forth in this
Agreement that are qualified by materiality shall be true and correct, and those
not so qualified shall be true and correct in all material respects, as of the
date hereof and as of the time of the Closing as though made as of such time,
except that to the extent such representations expressly relate to an earlier
date (in which case such representations and warranties qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date).
8.1.2 Performance of Covenants. NPC Group and Company shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed by NPC Group and Company
prior to or at the Closing.
8.1.3 Deliveries. NPC Group shall have delivered to Investor the
documents required by Section 9.2 and Company shall have delivered to Investor
the documents required by Section 9.3.
8.1.4 Compliance with HSR Act. All applicable waiting periods under
the HSR Act shall have expired or been terminated.
8.1.5 Consents and Authorizations. All applicable Consents, Permits
and Orders required to consummate the transactions contemplated hereby shall
have been obtained.
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8.1.6 Financing. Investor shall have successfully consummated the
Rule 144A Offering and obtained all other financing for the transaction
contemplated by this Agreement (which shall not include the equity purchase by
Investor described in Section 1.2).
8.1.7 Releases. Company and Company Affiliates shall be released,
effective as of the Closing Date, from any and all guarantees it has made or
provided in connection with the indebtedness of NPC or its Affiliates other than
Company and Company Affiliates.
8.1.8 No Action. No written notice shall have been received by any
Party that any Action is pending or overtly threatened before any Governmental
Authority to restrain, prohibit, or collect damages as a result of or otherwise
challenge this Agreement or any Related Document or any transaction contemplated
hereby or thereby.
8.1.9 Articles of Incorporation. The Company's Certificate of
Incorporation shall have been amended and restated to be in the form of the
Amended Certificate. The Amended Certificate shall have been filed with the
Secretary of State of Delaware, shall be in full force and effect under the laws
of the State of Delaware as of the Closing, and no further amendments or
modifications shall have been made to the Company's Certificate of
Incorporation.
8.1.10 Bylaws. The Company's Bylaws shall have been amended and
restated in the form of the Amended Bylaws. The Company's Bylaws shall be in
full force and effect as of the Closing as so amended and restated and shall not
have been further amended or modified.
8.1.11 Termination of Existing Options, Warrants and Other Rights.
Any option, warrant, or other right to purchase the capital stock of the Company
or any Company Affiliates pursuant to any employee or director compensation plan
or otherwise shall have been exercised, canceled, redeemed, or otherwise
terminated on or prior to the Closing Date.
8.2 Conditions Precedent to NPC Group's and Company's Obligations. The
obligation of NPC Group and Company to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the following
conditions, any of which may be waived in writing by NPC Group.
8.2.1 Accuracy of Representations and Warranties. The
representations and warranties of Investor set forth in this Agreement that are
qualified by materiality shall be true and correct, and those not so qualified
shall be true and correct in all material respects, as of the date hereof and as
of the time of the Closing as though made as of such time, except that to the
extent such representations expressly relate to an earlier date (in which case
such representations and warranties qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
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8.2.2 Performance of Covenants. Investor shall have performed and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed by Investor prior to or at the Closing.
8.2.3 Deliveries. Investor shall have delivered to NPC Group the
payments and documents required by Section 9.4.
8.2.4 Compliance with HSR Act. All applicable waiting periods under
the HSR Act shall have expired or been terminated.
8.2.5 Releases from Obligations. NPC Group and the Other Affiliates
shall be released, effective as of the Closing Date, from any and all further
obligation or liability with respect to the obligations listed on Schedule 8.2.5
(the "Releases").
8.2.6 Consents and Authorizations. All applicable Consents, Permits
and Orders required to consummate the transactions contemplated hereby shall
have been obtained or applied for.
8.2.7 No Action. No written notice shall have been received by any
Party that any Action is pending or overtly threatened before any Governmental
Authority to restrain, prohibit, or collect damages as a result of or otherwise
challenge this Agreement or any Related Document or any transaction contemplated
hereby or thereby.
8.2.8 Solvency Opinion. NPC Group shall have received a Solvency
Opinion addressed to the Board of Directors of NPC (among others) which shall be
substantially similar to any Solvency Opinion delivered to any banks or other
lenders party to the Credit Transaction and which provides assurance or
conclusions, from which a reasonable person could obtain assurance that the
Recapitalization does not result in a violation of either the Delaware
fraudulent conveyance statutes or Section 548 of the U.S. Bankruptcy Code.
ARTICLE 9.
CLOSING
9.1 Time and Place. On the terms and subject to the conditions of this
Agreement, the Closing shall take place at the offices of Kirkland & Ellis,
located at Citicorp Center, 153 East 53rd Street, New York, New York 10022-4675
at 10:00 a.m. local time on the first Monday (the "Closing Date") which is at
least three (3) Business Days after all of the conditions precedent set forth in
Article 8 have been satisfied or waived by the appropriate Party (or, with
respect to conditions to be satisfied on the Closing Date, the appropriate Party
has given reasonable assurances to the other Parties that such conditions will
be satisfied or waived on the designated date) or at such other time and place
as the Parties shall agree upon in writing. The Closing shall be effective as of
11:59 p.m. on the Sunday (the "Effective Date") immediately preceding the
Closing Date.
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9.2 Deliveries by NPC Group. At the Closing, NPC Group shall deliver to
Investor the following:
(a) A certificate or certificates representing the Redemption
Shares, registered in the name of Holdings, duly endorsed by Holdings for
transfer or accompanied by an assignment or assignments of the Shares duly
executed by Holdings, free and clear of all Liens;
(b) Copies of the recorded Charter Documents of NPC, recently
certified by the Secretary of State of the State of Kansas and a
Certificate of Good Standing of NPC dated within ten (10) business days of
the Closing Date issued by the Secretary of State of the State of Kansas;
(c) A certificate of the Secretary or Assistant Secretary of NPC
dated the Closing Date certifying (i) copies of NPC's Charter Documents,
(ii) resolutions adopted by NPC's board of directors authorizing the
transactions contemplated by this Agreement, and (iii) the incumbency and
signatures of NPC's officers, all in form and substance reasonably
satisfactory to Investor;
(d) Copies of the recorded Charter Documents of Holdings, recently
certified by the Secretary of State of the State of Delaware and a
Certificate of Good Standing of Holdings dated within ten (10) business
days of the Closing Date issued by the Secretary of State of the State of
Delaware;
(e) A certificate of the Secretary or Assistant Secretary of
Holdings dated the Closing Date certifying (i) copies of Holdings's
Charter Documents, (ii) resolutions adopted by Holdings's board of
directors authorizing the transactions contemplated by this Agreement, and
(iii) the incumbency and signatures of Holdings's officers, all in form
and substance reasonably satisfactory to Investor;
(f) A certificate of an executive officer of NPC Group dated the
Closing Date certifying to the fulfillment of the conditions specified in
Section 8.1.1 and Section 8.1.2;
(g) A written opinion addressed to Investor from counsel for NPC
Group and Company in form and substance reasonably acceptable to Investor;
(h) A Registration Rights Agreement in substantially the form
annexed hereto as Exhibit A, executed by NPC Group;
(i) A Stockholders' Agreement in substantially the form annexed
hereto as Exhibit B, executed by NPC Group;
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(j) A Transitional Financial and Accounting Services Agreement in
substantially the form annexed hereto as Exhibit C, executed by NPC
Management, Inc.; and
(k) Such other documents, instruments and certificates as Investor
may reasonably request for the transactions contemplated by this
Agreement.
9.3 Deliveries by Company. At the Closing, Company shall deliver to
Investor the following:
(a) a certificate or certificates representing the Purchase Shares,
registered in the name of Investor.
(b) Copies of the recorded Charter Documents of Company, recently
certified by the Secretary of State of the State of Delaware and a
Certificate of Good Standing of Company dated within ten (10) business
days of the Closing Date issued by the Secretary of State of the State of
Delaware;
(c) A certificate of the Secretary or Assistant Secretary of Company
dated the Closing Date certifying (i) Company's Charter Documents and good
standing, (ii) the adoption of resolutions by Company's board of directors
authorizing the transactions contemplated by this Agreement, and (iii) the
incumbency and signatures of Company's officers, all in form and substance
reasonably satisfactory to Investor;
(d) A certificate of an executive officer of Company dated the
Closing Date certifying to the fulfillment of the conditions specified in
Section 8.1.1 and Section 8.1.2;
(e) A Registration Rights Agreement in substantially the form
annexed hereto as Exhibit A, executed by the Company;
(f) A Stockholders' Agreement in substantially the form annexed
hereto as Exhibit B, executed by the Company; and
(g) An Employment Agreement between Company and Robert B. Page as
Chief Executive Officer of Company, in a form reasonably acceptable to
Company and Investor.
9.4 Deliveries by Investor. At the Closing, Investor shall deliver to NPC
Group the following:
(a) The Equity Purchase Price, in the manner required by Section
1.2;
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(b) Copies of the recorded partnership certificate of Investor,
recently certified by the Secretary of State of the State of Delaware and
a Certificate of Good Standing of Investor dated within ten (10) business
days of the Closing Date issued by the Secretary of State of Delaware;
(c) A certificate of the general partner of Investor and dated the
Closing Date certifying to the fulfillment of the conditions specified in
8.2.1 and Section 8.2.2;
(d) A written opinion addressed to NPC Group from counsel for
Investor, substantially in form and substance reasonably acceptable to NPC
Group;
(e) A Registration Rights Agreement in substantially the form
annexed hereto as Exhibit A, executed by Investor;
(f) A Stockholders' Agreement in substantially the form annexed
hereto as Exhibit B, executed by Investor; and
(g) Such other documents, instruments and certificates as NPC Group
may reasonably request for the transactions contemplated by this
Agreement.
ARTICLE 10.
TERMINATION PRIOR TO CLOSING DATE
10.1 Termination. This Agreement may be terminated prior to the Closing
Date only as follows:
(a) By the mutual written consent of NPC Group, Company and
Investor;
(b) By Investor immediately upon written notice to NPC Group, or by
NPC Group immediately upon written notice to Investor, if an Order is
issued forbidding or enjoining the consummation of the transaction
contemplated hereby which has become final and non-appealable; or
(c) (i) By Investor upon written notice to NPC Group if any of the
conditions in Section 8.1 have not been satisfied as of Termination Date
or if satisfaction of such a condition is or becomes impossible (other
than through the failure of Investor to comply with its obligations under
this Agreement) and Investor has not waived such condition on or before
Termination Date; or (ii) by NPC Group upon written notice to Investor, if
any of the conditions in Section 8.2 have not been satisfied as of
Termination Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of NPC Group or Company to
comply with their respective obligations under this
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Agreement) and NPC Group has not waived such condition on or before
Termination Date.
10.2 Effect of Termination. If this Agreement terminates pursuant to
Section 10.1, none of NPC Group, Company or Investor shall have any liability or
obligation to any of the other parties hereunder, other than the confidentiality
obligations set forth in the Confidentiality Agreement, and no party shall be
liable for Consequential Damages. However, such termination shall not relieve
any party of liability for any breach of this Agreement other than Consequential
Damages.
ARTICLE 11.
INDEMNIFICATION AND PROCEDURES
11.1 Indemnification by NPC Group. Subject to the other provisions of this
Article 11, from and after the Closing Date, NPC Group shall indemnify and hold
Investor, its Affiliates, the Company, and the Company Affiliates and their
respective employees, officers, directors and agents (the "Investor
Indemnitees") harmless from and against any and all Damages suffered by any
Investor Indemnitee arising out of:
(a) the breach of any representation or warranty made by NPC Group
or the Company in this Agreement or in any certificate required to be
executed and delivered by NPC Group or the Company at the Closing pursuant
to this Agreement;
(b) the failure of NPC Group to perform any covenant or obligation
of NPC Group contained in (x) this Agreement or (y) any other agreement
required to be executed and delivered by NPC Group at the Closing pursuant
to this Agreement; and
(c) any matters disclosed on Schedule 3.14 (Litigation) and any
other matters which would be required to be disclosed on such Schedule
3.14 if the representations and warranties contained in Section 3.14 were
made as of the Closing Date (which Damages shall not include any
deductibles required to be paid with respect to insurance for the
foregoing described matters).
Provided that all claims for indemnification under Article 7 relating to Income
Taxes will not be subject to this Article 11 but, rather, will be governed
exclusively by Section 7.1.
11.2 Indemnification by Investor. Subject to the other provisions of this
Article 11, from and after the Closing Date, Investor shall indemnify and hold
NPC Group, its Affiliates and their respective employees, officers, directors
and agents (the "NPC Group Indemnitees") harmless from and against any Damages
suffered by any NPC Group Indemnitee arising out of:
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(a) the breach of any representation or warranty made by Investor in
this Agreement or in any certificate required to be executed and delivered
by Investor at the Closing pursuant to this Agreement; and
(b) the failure of Investor to perform any covenant or obligation by
Investor contained in this Agreement or any other agreement required to be
executed and delivered by Investor at the Closing pursuant to this
Agreement.
11.3 Notice and Resolution of Claims.
11.3.1 Notice. Each person entitled to indemnification pursuant to
Section 11.1 or Section 11.2 (an "Indemnitee") shall promptly give written
notice to the party liable for indemnification (the "Indemnifying Party") after
obtaining knowledge of any claim that it may have pursuant to this Article 11;
provided that the failure to provide reasonably prompt notice shall not
extinguish the rights of a Party entitled to indemnification hereunder except to
the extent that such failure materially prejudices the dollar amount of any such
claim for indemnification or the ability to defend such claim. Such notice shall
set forth in reasonable detail the claim and the basis for indemnification.
11.3.2 Right to Assume Defense. (a) Except as set forth in 11.3.2(b)
below, if any claim for indemnity pursuant to this Article 11 shall arise from a
claim or Action involving a third party (a "Third Party Claim"), the Indemnitee
shall permit the Indemnifying Party to assume its defense. If the Indemnifying
Party assumes the defense of such Third Party Claim, it shall take all steps
necessary to investigate, defend or settle such Action and shall, subject to
Section 11.4, hold the Indemnitee harmless from and against any and all Damages
caused by or arising out of any settlement approved by the Indemnifying Party or
any judgment in connection with such Third Party Claim. Without the written
consent of the Indemnitee, the Indemnifying Party shall not consent to entry of
any judgment or enter into any settlement that does not include an unconditional
and complete release of the Indemnitee by the claimant or plaintiff making the
Third Party Claim. The Indemnitee may participate in such defense or settlement
through its own counsel, but at its own expense.
(b) Notwithstanding anything in this Agreement to the contrary, the
Indemnifying Party will not be entitled to assume control of such defense if the
Indemnitee reasonably concludes that, in light of any actual or potential
conflict of interest, it would be inappropriate for legal counsel selected by
the Indemnifying Party to represent the Indemnitee, but the Indemnifying Party
shall have the right to participate in such defense or settlement through its
own counsel, at its own expense.
11.3.3 Failure to Assume Defense. Failure by the Indemnifying Party
to notify the Indemnitee of its election to assume the defense of any Third
Party Claim within thirty (30) days after its receipt of notice thereof pursuant
to Section 11.3.1 shall be deemed a waiver by the Indemnifying Party of its
right to assume the defense of such Third Party Claim. In such event, the
Indemnitee may defend against such Third Party Claim in any manner it deems
appropriate.
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The Indemnitee may settle such Third Party Claim or consent to the entry of any
judgment with respect thereto, provided that it acts in good faith and in a
commercially reasonable manner.
11.4 Limits on Indemnification.
11.4.1 Basket. NPC Group shall be liable, in the aggregate, to the
Investor Indemnitees for all Damages that are indemnifiable pursuant to Section
11.1(a) only to the extent and in an amount that the aggregate amount of the
Damages to all Investor Indemnitees exceeds two percent (2%) of the sum of (x)
the Redemption Price and (y) the lesser of (i) 1/9 of the Equity Purchase Price,
and (ii) $3,750,000 (the "Basket"); provided that amounts recovered by any
Investor Indemnitee as described in clauses 11.4.6(b)(i) and 11.4.6(b)(ii) shall
not count against the Basket; provided, further, that this Section 11.4.1 shall
not apply to any willful or fraudulent breach of any representation, warranty or
other provision of this Agreement or to any breach of an Excluded Representation
or any matter described in Section 11.1(c).
11.4.2 Limit of Liability. The total aggregate liability of NPC
Group for any claims for Damages arising under Section 11.1(a) of this Agreement
shall not, in the aggregate, exceed ten percent (10%) of the sum of (x) the
Redemption Price and (y) the lesser of (i) 1/9 of the Equity Purchase Price, and
(ii) $3,750,000 (the "Cap"); provided that amounts recovered by any Investor
Indemnitee as described in clauses 11.4.6(b)(i) and 11.4.6(b)(ii) shall not
count against the Cap; provided, further, that this Section 11.4.2 shall not
apply to any willful or fraudulent breach of any representation, warranty or
other provision of this Agreement, or to any breach of an Excluded
Representation or any matter described in Section 11.1(c).
11.4.3 Survival. Neither NPC Group nor Investor shall have any
obligation to indemnify any Indemnitee pursuant to Sections 11.1(a) or 11.2(a)
for the breach of any representation or warranty unless such Indemnitee has in
good faith commenced an action or suit for such breach prior to the earlier of
June 30, 1999 or the date of receipt of the audited financial statements of
Company for the fiscal year ending March 28, 1999, in the case of all
representations and warranties except the Excluded Representations, in respect
of which such action or suit must be commenced (a) within the sixth anniversary
of the Closing Date in the case of the representations and warranties set forth
in Section 3.19, and (b) at any time with respect to the representations and
warranties set forth in Section 2.3.
11.4.4 Actual Knowledge. Neither Investor, on the one hand, nor NPC
Group and the Company on the other hand shall have any liability hereunder for
Damages arising from or relating to a breach or inaccuracy of any representation
or warranty set forth in this Agreement if the other Party had knowledge on or
before the time of Closing of the fact, condition or event constituting such
breach or inaccuracy; provided that the Investor shall only be deemed to have
had knowledge of facts, conditions or events if such facts, conditions or events
are specifically and expressly disclosed in the private offering memorandum
prepared pursuant to the Rule 144A Offering. Investor agrees that for purposes
of determining materiality in connection with the determination of required
disclosures in the private offering memorandum referred to above, Investor shall
not take into account receipt of indemnification from NPC Group.
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11.4.5 Prohibited Claims. Notwithstanding any provision to the
contrary contained herein, other than as expressly set forth in Section 6.6
hereof, each of the NPC Group Indemnitees hereby agrees that it will not make
any claim for indemnification or contribution against the Company pursuant to
this Agreement, and it will cause its Affiliates, officers and employees not to
make any claim for indemnification or contribution against the Company pursuant
to this Agreement, by reason of the fact that such NPC Group Indemnitee was a
stockholder, director, officer, employee (other than employees who are employed
by the Company after the Closing), or agent of the Company with respect to or in
connection with (a) any action, suit, proceeding, complaint, claim, or demand
brought by the Company, the Investor, or the Investor Indemnitees against such
NPC Group Indemnitee (whether such action, suit, proceeding, complaint, claim,
or demand is pursuant to this Agreement, applicable law, or otherwise) or (b)
any action, suit, proceeding, complaint, claim or demand arising out of or in
connection with the redemption of the Redemption Shares, the Recapitalization or
the other transactions contemplated by this Agreement.
11.4.6 Consequential Damages; Mitigation. Neither NPC Group nor
Investor shall have any obligation to indemnify any NPC Group Indemnitee or
Investor Indemnitee for (a) any Consequential Damages, or (b) any other Damages
(i) that are recovered by the Indemnitee from any third party (including
insurers), or (ii) to the extent (and as of and not until the time) such Damages
are offset by actual tax savings realized on account of such Damages by the
Indemnitee or any of its Affiliates.
11.4.7 Exclusive Remedy. Except as provided in Section 7.1 with
respect to Income Taxes, this Article 11 sets forth the exclusive remedy for
monetary damages owing from NPC Group to the Investor Indemnitees and from
Investor to NPC Group Indemnitees that arise from the matters described in
Sections 11.1 and 11.2, except to the extent limited by applicable securities
laws, which, if applied, shall be subject to the Basket and the Cap to the
extent permitted by law. Each of the Parties hereby waives any claim or cause of
action for monetary damages that it might assert against the other, with respect
to the matters described in Sections 11.1 and 11.2, whether under common law or
under any Environmental Law or trade regulation or other Law.
11.5 Determination of Loss and Amount. The determination of whether any
Damages have occurred, or the amount of any such Damages (including, without
limitation, for purposes of Section 11.4), the representations, warranties,
covenants and agreements of the Parties (other than the Excluded Representations
and the representations and warranties set forth in Section 3.6.1, Section 3.6.2
and the first sentence of Section 3.7) set forth in this Agreement and the
Schedules and Exhibits attached hereto or in any writing delivered by any Party
to another Party in connection with this Agreement, will be made without regard
to any materiality qualifications set forth therein.
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11.6 Payment. Upon final determination by NPC Group and Investor or by a
court of competent jurisdiction that an Indemnitee is entitled to
indemnification under this Article 11, the Indemnifying Party shall promptly pay
or reimburse, as appropriate, the Indemnitee for any Damages for which it is
entitled to be indemnified hereunder. Neither NPC Group nor Investor shall
permit any exercise of any right of set-off against the other party until such
final determination is made.
11.7 Other Indemnitees. Investor shall cause the Investor Indemnitees, and
NPC Group shall cause NPC Group Indemnitees, to comply with the provisions and
to abide by the limitations set forth in this Article 11.
ARTICLE 12.
EMPLOYEE MATTERS
12.1 Employees. Schedule 12.1 lists certain employees of Company who are
engaged in management (the "Management Employees") as of the date indicated
thereon (which date is not more than thirty (30) days prior to the date hereof),
including each such person's name and current position or job classification.
Company has provided Investor with a separate, confidential list of wage or
salary and bonus information for each Management Employee. On and after the
Closing, (a) except as provided in Section 12.2 below, NPC Group shall have no
further obligation to provide benefits, or make its benefit plans available, to
the Management Employees or other employees of Company, other than the right of
certain Management Employees to exercise stock options of NPC after the Closing;
and (b) Company shall assume, and hold NPC Group harmless from, all obligations
and liabilities to the Company's employees and their dependents under COBRA or
similar Laws with respect to occurrences after the Closing Date.
12.2 Welfare Benefits. (a) NPC Group shall be responsible for providing
Company employees and former Company and Company Affiliate employees and their
respective beneficiaries and dependents with welfare benefits, including
without limitation life insurance, accidental death and dismemberment insurance,
business travel accident insurance, hospital, medical, major medical, dental,
vision, short-term and long-term disability benefits (such benefits,
collectively, "Welfare Benefits"), for claims incurred before the Closing Date.
The Company shall be solely responsible for providing Company employees that
remain employees of the Company or the Company Affiliates after the Closing Date
and their respective beneficiaries and dependents with the Welfare Benefits that
are provided under plans to be established by the Company for claims incurred
after the Closing Date. Without limiting the generality of the foregoing, NPC
Group shall be solely responsible for providing Company and Company Affiliate
employees, former Company or Company Affiliate employees and their respective
current and former dependents and beneficiaries with all required continuation
coverage under Section 601 et seq. of ERISA and Section 4980B of the Code for
Qualifying Events (as defined in Section 603 of ERISA and the regulations
pertaining thereto) occurring on or prior to the Closing Date. For purposes of
this Section 12.2, a claim for a medical, dental or other similar benefit shall
be considered to be incurred
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when the services that are the subject of the claim are performed; a claim for
life insurance or other death-related benefits shall be considered to be
incurred when the death of the covered individual occurs; and a claim for
disability benefits or other income-replacement benefits shall be considered
incurred as and when such benefits are payable.
ARTICLE 13.
MISCELLANEOUS
13.1 Non-Compete Covenant.
(a) Non-Competition with Business of the Company. Effective upon the
Closing, for a period of three (3) years after the date hereof (the
"Non-Competition Period"), NPC shall not, directly or indirectly, own, operate,
lease, manage, control, engage in, invest in, permit its name to be used by, act
as consultant or advisor to, render services for (alone or in association with
any person, firm, corporate or other business organization) or otherwise assist
in any manner any person or entity (other than Company and the Company
Affiliates) that is in the casual dining rib restaurant business anywhere in the
world ("Covered Activities"). Nothing herein shall prohibit NPC from being a
passive owner of not more than five percent (5%) of the outstanding stock of any
class of securities of a publicly traded corporation engaged in Covered
Activities, so long as NPC does not actively participate in the management of
such corporation.
(b) Acknowledgment. NPC acknowledges and agrees that (i) the
covenants set forth in this Agreement are reasonable in scope, duration,
geographic area and in all other respects, (ii) the Investor would not have
entered into this Agreement but for the covenants of NPC contained in this
Section 13.1, and (iii) the covenants contained in this Section 13.1 have been
made in order to induce the Investor to enter into this Agreement.
(c) Severability. If a court shall hold that the duration, scope, or
area restrictions stated in this Section 13.1 are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope,
or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area. If any provision of this Section 13.1 shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable in whole or in part, and such determination shall become final,
and such determination shall not be curable by the application of the previous
sentence, such provision shall be deemed to be severed or limited, but only to
the extent required to render the remaining provisions of this Section 13.1
enforceable. This Section 13.1, as thus amended, shall be enforced to give
effect to the intention of the parties insofar as that is possible.
(d) Remedies. NPC and the Investor acknowledge and agree that money
damages would not adequately compensate the Investor if NPC were to breach any
of its covenants contained in this Section 13.1 and that the Investor would have
no adequate remedy at law. Accordingly, NPC agrees that in the event of any such
breach, the Investor shall be entitled, in addition to any other rights and
remedies existing in its favor, to enforce its rights
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under this Section 13.1, not only by an action or actions for damages, but also
by an action or actions for specific performance, injunction and/or other
equitable relief in order to enforce or prevent any violations of the provisions
of this Section 13.1 (including the extension of the Non-Competition Period by a
period equal to (i) the length of the violation of any of the provisions of this
Section 13.1 plus (ii) the length of any court proceedings necessary to stop
such violation). In the event of a breach or violation of any of the provisions
of this Section 13.1, the Non-Competition Period (but not NPC's obligations
hereunder) shall be tolled during the continuance of any actual breach or
violation.
13.2 Severability. If any provision of this Agreement as applied to any
party or to any circumstance shall be held invalid, illegal or unenforceable by
any court of competent jurisdiction, (i) the validity, legality and
enforceability of the remaining provisions of this Agreement will remain in full
force and effect and (ii) the application of such provision to any other party
or to any other circumstance shall not be affected or impaired thereby.
13.3 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto; provided, however, that neither this Agreement
nor any of the rights or obligations hereunder may be assigned by any party
without the prior written consent of the other parties hereto, except that
Investor shall have the right to assign all or a portion of its rights hereunder
to one or more Persons without the consent of the other parties hereto, which
assignment shall not result in a release of any of Investor's obligations or
liabilities under this Agreement provided that Investor and each such Person
execute and deliver to the other parties an assignment and assumption agreement,
in a form reasonably acceptable to NPC. In connection with the arrangement and
consummation of the financing contemplated by this Agreement, the NPC Group and
the Company hereby consent to Investor's assignment, effective immediately after
the Closing, to Investor's financing sources thereunder its rights pursuant to
and any claims under this Agreement.
13.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which, when taken together, shall constitute one and the same
agreement.
13.5 Headings. The table of contents, captions and headings used in this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction or
interpretation hereof.
13.6 Waiver. Any of the terms or conditions of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of such provision at any time in the future or a
wavier of any other provision hereof. The rights and remedies of the parties are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial
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exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege.
13.7 No Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, shall create or confer upon any person (including but not limited to
any Employees), other than the parties hereto or their respective successors and
permitted assigns, any legal or equitable rights, remedies, obligations,
liabilities or claims under or with respect to this Agreement, except as
expressly provided herein. The Investor Indemnitees and NPC Group Indemnitees
are intended third-party beneficiaries of the applicable indemnification and
contribution provisions herein.
13.8 Expenses.
13.8.1 Except as otherwise expressly provided herein, NPC Group
shall pay all costs and expenses incurred by it or on its behalf in connection
with this Agreement and the transactions contemplated hereby, including fees and
expenses of its own agents, representatives, financial consultants, accountants
and legal counsel.
13.8.2 Except as otherwise expressly provided herein, at the
Closing, the Company shall pay all costs and expenses incurred by the Investor
or on the Investor's behalf in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of the Investor's
agents, representatives, financial consultants, accountants and legal counsel,
and fees and expenses incurred in connection with the acquisition of title
insurance, surveys and the certificates, consents and nondisturbance agreements
set forth in Section 5.10 and any environmental audits or investigations
undertaken by the Investor in connection with the Real Property; provided that
the costs, fees and expenses paid by the Company pursuant to this Section 13.8.2
shall not be included in the Closing Balance Sheet or the Adjustment Statement.
13.8.3 Company shall pay at the Closing the audit fees associated
with the audited historical financial statements of Company. If the transaction
contemplated by this Agreement is not consummated, then NPC Group shall pay that
portion of the audit fees, relating to the preparation of the audited financial
statements of the Company prepared pursuant to Section 3.6.1 and Section 5.2,
which would otherwise be attributable to the normal recurring audit of NPC
Group, and Investor shall pay the remaining part of the audit fee; provided,
however, that if NPC Group disposes of all or substantially all of the assets or
stock of Company, whether through sale or merger, within one year of the date of
this Agreement, the purchaser of Company shall reimburse Investor for that
portion of the audit fees paid by Investor.
13.9 Notices. Unless otherwise provided herein, any notice, request,
waiver, instruction, consent or other document or communication required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed to have been duly given and received (a) when delivered by hand (with
written confirmation of receipt), (b) when received by the addressee, if sent by
a nationally-recognized overnight delivery service or (c) when received by the
addressee, if mailed by registered or certified mail, postage prepaid, return
receipt requested, as follows:
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If to NPC Group or Company:
NPC International, Inc.
14400 College Blvd., Suite 201
Lenexa, Kansas 66215
Attention:Troy D. Cook
Telephone:(913) 327-5555
Facsimile:(913) 327-5849
Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, Texas 75243
Attention:Robert B. Page
Telephone:(214) 343-7800
Facsimile:(214) 343-7725
with a copy to:
John A. Granda, Esq.
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, Missouri 64106
Telephone:(816) 842-8600
Facsimile:(816) 691-3495
If to Investor:
Sentinel Capital Partners, L.P.
777 Third Ave., 32nd Floor
New York, New York 10017
Attention: John F. McCormack
David S. Lobel
Telephone: (212) 688-3100
Facsimile: (212) 688-6513
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with a copy to:
Frederick Tanne, Esq.
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
Telephone:(212) 446-4800
Facsimile:(212) 446-4900
or at such other address or facsimile number for such party as shall be
specified in writing by that party.
13.10 Governing Law. This Agreement shall be construed in accordance with
and governed by the Laws of the State of Delaware applicable to agreements made
and to be performed wholly within such jurisdiction, without regard to conflicts
of law principles.
13.11 Interpretation.
13.11.1 Unless specifically stated otherwise, references to
Articles, Sections, Exhibits and Schedules refer to Articles, Sections, Exhibits
and Schedules in this Agreement. References to "includes" and "including" mean
"includes without limitation" and "including without limitation."
13.11.2 Each party hereto is a sophisticated legal entity that was
advised by experienced counsel and, to the extent it deemed necessary, other
advisors in connection with this Agreement. Accordingly, each party hereby
acknowledges that no party has relied or will rely, in respect of this
Agreement, the transactions contemplated hereby, upon any document, projections,
financial data or other written or oral information previously furnished to or
discovered by it or its representatives, other than that information set forth
in this Agreement, the Exhibits and Schedules hereto, the documents and
instruments required by this Agreement to be delivered at the Closing.
13.11.3 Any item disclosed in one Section or Schedule shall be
deemed to be disclosed in any other Section or Schedule where such disclosure is
relevant, even if there is no express cross-reference, provided that the
relevance of the disclosure is reasonably apparent. Disclosure of items that may
or may not be required to be disclosed by this Agreement does not mean that such
items are material or create a standard of materiality and shall not be deemed
an admission that any such disclosed matter is or may give rise to a breach of
any Contract or violation of any Law.
13.11.4 No provision of this Agreement shall be interpreted in favor
of, or against, any of the parties hereto by reason of the extent to which any
such party or its counsel
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participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.
13.12 Public Announcements. NPC Group and Investor shall agree on the
terms of any press releases or other public announcements and certain other
communications related to this Agreement and shall consult with each other
before issuing any press releases or other public announcements related to this
Agreement; provided, however, that any Party may make a public disclosure if in
the opinion of such Party's counsel it is required by Law, legal process or the
rules of the Nasdaq National Market System to make such disclosure. The Parties
agree, to the extent practicable, to consult with each other regarding any such
public announcement in advance thereof. In addition, the Parties agree to
consult with, and provide commercially reasonable cooperation to, each other
with respect to the form and content of any communication to employees,
customers, suppliers and others having dealings with NPC Group, Company and
Other Affiliates concerning this Agreement and the transactions contemplated
thereby through the Closing Date.
13.13 Specific Performance. The Company and NPC Group acknowledge that
money damages would not be a sufficient remedy for any breach by the Company or
NPC Group of this Agreement and agrees that the Investor shall be entitled to
specific performance and injunctive relief as remedies for any such breach.
13.14 Entire Agreement. This Agreement, together with the Schedules and
Exhibits hereto and the Confidentiality Agreement, constitutes the sole
understanding of the parties hereto with respect to the matters contemplated
hereby and thereby and supersedes and renders null and void all prior agreements
and understandings, written and oral, between or among the parties hereto with
respect to the subject matter hereof and thereof. No party hereto shall be
liable or bound to any other party in any manner by any promises, conditions,
representations, warranties, covenants, agreements and understandings, except as
specifically set forth herein or therein.
13.15 Amendment. No amendment, modification or alteration of the terms or
provisions of this Agreement, including any Schedules and Exhibits, shall be
binding unless the same shall be in writing and duly executed by the Party
against whom such amendment, modification or alteration is sought to be
enforced.
ARTICLE 14.
DEFINITIONS
14.1 Definitions. For purposes of this Agreement, the terms set forth
below shall have the following meanings:
14.1.1 "Accrued Expenses" means unpaid accrued expenses, other than
the closure reserve and health and worker's compensation reserves, and
intercompany receivables and payables to and from NPC Group and Company.
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14.1.2 "Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or
arbitrator.
14.1.3 "Adjusted Redemption Price" shall have the meaning set forth
in Section 1.4.2.
14.1.4 "Adjustment Liabilities" means (i) all indebtedness for
borrowed money, including bank lines of credit and the current portion of long
term debt of the Company immediately prior to the Closing, and (ii) capital
lease financing (as defined by GAAP) and other long term debt of the Company
immediately prior to the Closing.
14.1.5 "Adjustment Statement" shall have the meaning set forth in
Section 1.4.1.
14.1.6 "Affiliate" means, with respect to any Person, any other
Person controlling, controlled by, or under common control with such Person. For
purposes of this Agreement, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with" as used with
respect to any Person) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person whether through ownership of voting securities, by contract or otherwise.
14.1.7 "Affiliated Group" shall have the meaning set forth in
Section 3.19.1.
14.1.8 "Agreement" means this Agreement, together with the Schedules
and Exhibits hereto.
14.1.9 "Amended Bylaws" shall have the meaning set forth in Section
1.1.
14.1.10 "Amended Certificate" shall have the meaning set forth in
Section 1.1.
14.1.11 "Basket" shall have the meaning set forth in Section 11.4.1.
14.1.12 "Business Commencement Date" shall have the meaning set
forth in Section 1.4.3.
14.1.13 "Cap" shall have the meaning set forth in Section 11.4.2.
14.1.14 "Cash" means cash, cash equivalents and credit card
receipts.
14.1.15 "Charter Documents" means (a) in the case of any
corporation, its articles or certificate of incorporation and its by-laws, (b)
in the case of any partnership, its partnership agreement and partnership
certificate, if any, and (c) in the case of any other Person, its organic and
governing documents, as each has been amended or supplemented from time to time.
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14.1.16 "Checks in Excess of Cash Balances" means checks that have
been issued for more than the book balance in the account on which it was drawn.
All cash accounts of Company shall be combined for purposes of this definition.
14.1.17 "Circular" shall have the meaning set forth in Section
3.25.1.
14.1.18 "Closing" means the consummation of the transactions
contemplated hereby.
14.1.19 "Closing Balance Sheet" shall have the meaning set forth in
Section 3.6.2.
14.1.20 "Closing Date" shall have the meaning set forth in Section
9.1
14.1.21 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
14.1.22 "Company" shall have the meaning set forth in the first
paragraph of this Agreement.
14.1.23 "Company Affiliates" means any corporation, partnership,
association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
the Company or (ii) if a partnership, association or other business entity, a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by the Company. For
purposes hereof, the Company shall be deemed to have a majority ownership
interest in a partnership, association or other business entity if the Company,
directly or indirectly, is allocated a majority of partnership, association, or
other business entity gains or losses, or is or controls the managing director
or general partner (or Person having like authority) of such partnership,
association or other business entity.
14.1.24 "Company Common Stock" shall have the meaning set forth in
the preamble hereto.
14.1.25 "Confidential Information" means any proprietary or
confidential information which relates solely or primarily to the business of
the Company or the Company Affiliates.
14.1.26 "Confidentiality Agreement" means the confidentiality
agreement, dated December 11, 1997, between Investor and NPC Group.
14.1.27 "Consent" means a consent, approval, authorization, waiver
or notification from any Person, including any Governmental Authority or third
party.
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14.1.28 "Consequential Damages" means (a) Damages arising out of any
interruption of business, loss of profits, loss of use of facilities, claims of
customers, loss of goodwill or (b) any indirect, incidental or special Damages,
but expressly excluding, without limitation, any direct Damages.
14.1.29 "Contracts" means all contracts, agreements, instruments,
leases, licenses, commitments and arrangements, except Permits.
14.1.30 "Covered Activities" shall have the meaning set forth in
Section 13.1.
14.1.31 "Damaged Restaurant" shall have the meaning set forth in
Section 5.11.
14.1.32 "Damages" means all losses, claims, damages, costs, fines,
penalties, obligations, payments and liabilities (including those arising out of
any Action), together with all reasonable costs and expenses (including
reasonable outside attorneys' fees and reasonable out-of-pocket expenses)
incurred in connection with any of the foregoing.
14.1.33 "Designated Preferred Stock" shall have the meaning set
forth in Section 1.2.
14.1.34 "Dollars" or "$" means lawful currency of the United States.
14.1.35 "Domestic Franchise Restaurants" means the franchised Tony
Roma restaurants located at 150 N. Hurstbourne Parkway, Louisville, Kentucky,
5300 San Dario Avenue, Suite 278-C, Space #125, Laredo, Texas, 2581 S.
Packerland Dr., Green Bay, Wisconsin, 10261 South State Street, Sandy, Utah,
3550 Porsche Way, Ontario, California, 5605 Slide Road, Lubbock, Texas, and
14742 E. Indiana, Spokane Valley Mall, Spokane, Washington.
14.1.36 "Earnings Amount" shall have the meaning set forth in
Section 1.4.4.
14.1.37 "EBITDA" means earnings before interest expenses, income
taxes, depreciation and amortization at the restaurant level, not including
field and general and administrative expenses, determined consistent with prior
practices and consistent with the calculation method contained in the by-store
EBITDA presentation provided to Investor by Schroder & Co. Inc.) and will not be
impacted by any real estate financing transactions that are inconsistent with
past practice (including sales leaseback transactions).
14.1.38 "Effective Date" shall have the meaning set forth in Section
9.1.
14.1.39 "Employee" means each employee of Company.
14.1.40 "Employee Benefit Plan" shall have the meaning set forth in
Section 3.18.1.
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14.1.41 "Environment" means soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and any
other environmental medium or natural resource.
14.1.42 "Environmental Laws" means all Laws, all similar provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning work
place health and safety, public health and safety, or pollution or protection of
the environment, including without limitation all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, as such of the foregoing are
enacted or in effect, prior to, on, or after the Closing Date.
14.1.43 "Equity Purchase Price" shall have the meaning set forth in
Section 1.2.
14.1.44 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
14.1.45 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
14.1.46 "Excluded Representations" means the representations and
warranties set forth in Section 2.3, Section 3.19 (with respect to Income Taxes
only), the third sentence of Section 2.1, the first sentence of Section 2.2, the
second sentence of Section 3.1, and the first sentence of Section 3.2.
14.1.47 "Financeable Leasehold" shall have the meaning set forth in
Section 5.10.
14.1.48 "Fiscal Period" means one of 12 periods which together
constitute the Company's 52 week fiscal year.
14.1.49 "Foreign Franchise Restaurants" means the franchised Tony
Roma restaurants located at (a) Panin Bank Centre, Ground Floor, Jalan Jend,
Sudirman, Kavling No. 11, Jakarta 10270, Indonesia, (b) Jalan K.H. Wahid Hasyim,
No. 49/51, Jakarta 10350, Indonesia, (c) Dong Hyun B/D 6F, 587-14, Shin Sa-Dong,
KangNam-KU, Seoul, South Korea, (d) Dae Ho Bldg B-1, 1451-34 Secho Dong, Secho -
ku, Seoul, South Korea, and (e) Myung Dong, 21 Sogong-Dong, Chung-Gu, Seoul,
South Korea.
14.1.50 "Franchise Agreements" means the written agreements with
Roma Franchise Corporation (directly or by assignment from the Company) pursuant
to which Franchisees have the right to develop and operate Tony Roma's
restaurants.
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14.1.51 "Franchise Laws" shall have the meaning set forth in Section
3.25.1.
14.1.52 "Franchisees" means the Persons who are parties to the
Franchise Agreements, other than Roma Franchise Corporation.
14.1.53 "GAAP" means U.S. generally accepted accounting principles
at the time in effect.
14.1.54 "Governmental Authority" means any federal, state or local
government, any of its subdivisions, agencies, authorities, commissions, boards
or bureaus, any federal, state or local court or tribunal and any arbitrator.
14.1.55 "Guarantee" means any guarantee, any indemnification
obligation and any other contingent obligation to purchase, to provide funds for
payment or to supply funds to invest in any Person or otherwise to assure a
creditor against loss.
14.1.56 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
14.1.57 "Income Tax" means any federal, state or local income,
alternative minimum, franchise or other similar Tax, duty, governmental charge
or assessment imposed by or on behalf of any Governmental Authority that is
based on or measured by income (including, interest and penalties on any of the
foregoing).
14.1.58 "Indemnifying Party" shall have the meaning set forth in
Section 11.3.1.
14.1.59 "Indemnitee" shall have the meaning set forth in Section
11.3.1.
14.1.60 "Independent Firm" shall have the meaning set forth in
Section 1.4.1.
14.1.61 "Intellectual Property" means all patents, patent
applications and patent disclosures; all inventions (whether or not patentable
and whether or not reduced to practice); all trademarks, service marks, trade
dress, trade names and corporate names and all the goodwill associated
therewith; all mask works; all registered and unregistered statutory and common
law copyrights; all registrations, applications and renewals for any of the
foregoing; and all trade secrets, confidential information, ideas, formulae,
compositions, recipes, standards for raw materials, packaging, labeling,
know-how, manufacturing and production processes and techniques, quality control
standards, processes and technical descriptions for the transformation of raw
materials into finished products, research information, drawings,
specifications, designs, plans, improvements, proposals, technical and computer
data, documentation and software, financial business and marketing plans,
customer and supplier lists and related information, marketing materials and all
other proprietary rights.
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14.1.62 "Inventory" means all inventory and raw materials used by
Company.
14.1.63 "Investor" shall have the meaning set forth in the first
paragraph of this Agreement.
14.1.64 "Investor Indemnitees" shall have the meaning set forth in
Section 11.1.
14.1.65 "Key Employees" shall have the meaning set forth in Section
3.17.
14.1.66 "Law" means any federal, state, local or other statute,
rule, regulation or ordinance.
14.1.67 "Lease" shall have the meaning set forth in Section 3.10.2.
14.1.68 "Leased Personal Property" shall have the meaning set forth
in Section 3.11.2.
14.1.69 "Leased Real Property" shall have the meaning set forth in
Section 3.10.2.
14.1.70 "Liabilities" shall mean all liabilities and obligations of
any kind, nature or description, whether known or unknown, accrued or unaccrued,
liquidated or unliquidated, direct or indirect, due or to become due, actual or
contingent.
14.1.71 "Lien" means any lien, mortgage, deed of trust, security
interest, charge, pledge, retention of title agreement, easement, encroachment,
condition, reservation, covenant or other encumbrance affecting title.
14.1.72 "Management Employee" has the meaning set forth in Section
12.1.
14.1.73 "Material Adverse Effect" means a material adverse effect on
(a) the business, financial condition or results of operations of Company and
the Company Affiliates, taken as a whole, or (b) the ability of NPC Group to
consummate the transactions contemplated by this Agreement.
14.1.74 "Material Contracts" shall have the meaning set forth in
Section 3.13(a).
14.1.75 "Material Lease" means a Lease or a Personal Property Lease
involving a term of more than one (1) year or rental obligations exceeding
$25,000 per annum.
14.1.76 "Material Suppliers" shall have the meaning set forth in
Section 3.12.
14.1.77 "Net Accounts Receivable" means all accounts receivable,
trade receivables, notes receivables and other receivables, which in any case
are payable as a result of
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goods sold or services provided, or billed for, by Company, net of allowance for
doubtful accounts.
14.1.78 "New Restaurant" shall have the meaning set forth in Section
5.11.
14.1.79 "Non-Competition Period" shall have the meaning set forth in
Section 13.1.
14.1.80 "NPC" shall have the meaning set forth in the first
paragraph of this Agreement.
14.1.81 "NPC Group" shall have the meaning set forth in the first
paragraph of this Agreement.
14.1.82 "NPC Group Indemnitees" shall have the meaning set forth in
Section 11.2.
14.1.83 "NPC Group's Knowledge" means the actual knowledge as of the
date of this Agreement of O. Gene Bicknell, James Schwartz, Troy Cook, Robert
Page, David Short and Alan Salts.
14.1.84 "Objection Notice" shall have the meaning set forth in
Section 1.4.1.
14.1.85 "Order" means any order, judgment, injunction, decree,
determination or award of any Governmental Authority.
14.1.86 "Other Affiliates" means Affiliates of Company other than
NPC Group.
14.1.87 "Other Law" means any Law applicable to Company other than
an Environmental Law or a law relating to (a) Taxes or (b) ERISA.
14.1.88 "Owned Real Property" shall have the meaning set forth in
Section 3.10.1.
14.1.89 "Owned Restaurants" means the Tony Roma restaurants (A)
owned or leased, and (B) operated, by the Company or the Company Affiliates
located at (a) 11 Shackleford Drive, Little Rock, Arkansas, (b) 1580 E. Merritt
Island Causeway, Merritt Island, Florida, (c) 555 N. Stephanie St., Henderson,
Nevada, (d) 9920 Leitner Drive, Pineville, North Carolina, (e) 365 N. Congress,
Boynton Beach, Florida, (f) 103 Beacon Drive, Greenville, South Carolina, (g)
1635 Wells Road, Orange Park, Florida, (h) 1641 Westgate Circle, Brentwood,
Tennessee, (i) 2040 North Rainbow Blvd., Las Vegas, Nevada (j) 16575 Ventura
Blvd., Encino, California, and (k) 3300 N.W. 87th Avenue, Miami, Florida.
58
<PAGE> 65
14.1.90 "Party" means each of NPC Group, Company and Investor and
"Parties" means NPC Group, Company and Investor collectively.
14.1.91 "Permit" means any permit, license, franchise, certificate
(including a certificate of occupancy) registration, authorization or approval
issued by a Governmental Authority.
14.1.92 "Permitted Liens" means (a) Liens for Taxes that are not yet
due and payable or that are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established in
accordance with GAAP, consistently applied, (b) workers', repairmens' and
similar Liens imposed by Law that have been incurred in the ordinary course of
business, (c) Liens that do not, individually or in the aggregate, materially
impair the occupancy, value or continued use of the property (as currently used)
to which they relate, (d) the rights of others to customer deposits, and (e)
Liens incurred in the ordinary course of business after the date hereof.
14.1.93 "Person" means any natural person, corporation, partnership,
limited liability company, trust, unincorporated organization or other entity.
14.1.94 Personal Property Leases" means any lease or sublease of
personal property.
14.1.95 "Prepaid Expenses" means all prepaid expenses of Company
other than net pre-opening costs.
14.1.96 "Purchase Shares" shall have the meaning set forth in the
preamble to this Agreement.
14.1.97 "Real Property" shall have the meaning set forth in Section
3.10.2.
14.1.98 "Recapitalization" shall have the meaning set forth in the
preamble to this Agreement.
14.1.99 "Redemption Price" shall have the meaning set forth in
Section 1.4.5.
14.1.100 "Redemption Shares" shall have the meaning set forth in the
preamble to this Agreement.
14.1.101 "Related Documents" means the Registration Rights
Agreement, the Stockholder's Agreement, and the Transitional Financial and
Accounting Services Agreement, in substantially the forms annexed hereto as
Exhibits A, B, and C, respectively.
14.1.102 "Releases" shall have the meaning set forth in Section
8.2.5.
59
<PAGE> 66
14.1.103 "Returns" shall have the meaning set forth in Section
3.19.1.
14.1.104 "Rule 144A Offering" shall have the meaning set forth in
the preamble to this Agreement.
14.1.105 "Rules" shall have the meaning set forth in Section 3.25.1.
14.1.106 "Securities Act" means the Securities Act of 1933, as
amended.
14.1.107 "Shares" shall have the meaning set forth in the preamble
to this Agreement.
14.1.108 "Stock Purchase" shall have the meaning set forth in the
preamble to this Agreement.
14.1.109 "Stock Redemption" shall have the meaning set forth in the
preamble to this Agreement.
14.1.110 "Tax" or "Taxes" means all income, profits, franchise,
gross receipts, capital, sales, use, withholding, value added, ad valorem,
transfer, employment, social security, disability, occupation, property,
severance, production, excise and other taxes, duties and similar governmental
charges and assessments imposed by or on behalf of any Governmental Authority
(including interest and penalties thereon).
14.1.111 "Tax Laws" means the Code and all other Laws relating to
Taxes.
14.1.112 "Termination Date" means sixty (60) days after the date
hereof; provided that if Investor is using commercially reasonable efforts to
consummate the Rule 144A Offering, then the "Termination Date" shall be ninety
(90) days after the date hereof; provided, further, that if on or before the
ninetieth (90th) day after the date hereof a written offering memorandum,
circular or other document has been prepared which is intended to be used for
purposes of meeting the disclosure requirements of applicable securities law in
connection with the Rule 144A offering, and such memorandum, circular or other
document has been delivered to prospective investors in connection with such
Rule 144A Offering, then the "Termination Date" shall be August 31, 1998.
14.1.113 "Third Party Claim" shall have the meaning set forth in
Section 11.3.2.
14.1.114 "Trade Accounts Payable" means any payable for goods or
services rendered by a third party vendor or supplier in the ordinary course of
business.
14.1.115 "Unadjusted Redemption Price" shall have the meaning set
forth in Section 1.3.
60
<PAGE> 67
14.1.116 "Working Capital" means (i) the sum of Cash, Accounts
Receivable, Inventory, and Prepaid Expenses, minus (ii) the sum of Trade
Accounts Payable, Checks in Excess of Cash Balances, and Accrued Expenses,
excluding the closure reserve, and health and worker's compensation reserves,
intercompany receivables and payables to and from NPC Group and Company and
Company Affiliates and net pre-opening costs; provided that the calculation of
Working Capital shall not take into account any payments or obligations of
Company related to its obligation to purchase the real estate and related
buildings, equipment and fixtures pursuant to Section 1.5.
61
<PAGE> 68
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first written above.
ROMACORP, INC.
By: /s/ Troy D. Cook
-----------------------------
Name: Troy D. Cook
Title: Vice-President
NPC INTERNATIONAL, INC.
By: /s/ Troy D. Cook
-----------------------------
Name: Troy D. Cook
Title: Vice-President
NPC RESTAURANT HOLDINGS, INC.
By: /s/ Troy D. Cook
-----------------------------
Name: Troy D. Cook
Title: Vice-President
SENTINEL CAPITAL PARTNERS, L.P.
By Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ David S. Lobel
-----------------------------
Name: David S. Lobel
Title: President
<PAGE> 1
EXHIBIT 2.2
EXECUTION COPY
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT is made this 1st day of July, 1998 by and
among Sentinel Capital Partners, L.P. ("Sentinel"), Sentinel Capital Partners
II, L.P. ("Sentinel II"), Omega Partners, L.P. ("Omega"), Provident Financial
Group, Inc. ("Provident"), Travelers Casualty and Surety Company ("Travelers
I"), The Travelers Insurance Company ("Travelers II"), The Travelers Life and
Annuity Company ("Travelers III") and The Phoenix Insurance Company ("Phoenix",
and together with Sentinel II, Omega, Provident, Travelers I, Travelers II, and
Travelers III, the "Assignees").
WHEREAS, Sentinel, Romacorp, Inc. ("Romacorp"), NPC International,
Inc., and NPC Restaurant Holdings, Inc. entered into a Recapitalization
Agreement dated as of April 24, 1998 (the "Recapitalization Agreement"),
pursuant to which, among other things, Sentinel agreed to purchase certain
securities of Romacorp;
WHEREAS, Section 13.3 of the Recapitalization Agreement provides that
no party thereto may assign any of its rights or obligations thereunder without
the prior written consent of the other parties thereto, except Sentinel may
assign all or a portion of its rights under the Recapitalization Agreement to
one or more Persons without the consent of the other parties thereto, provided
that no such assignment will result in a release of any of Sentinel's
obligations or liabilities under the Recapitalization Agreement; and
WHEREAS, Sentinel desires to assign a portion of its rights under the
Recapitalization Agreement to purchase the Purchase Shares pursuant to the terms
and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Assignment Agreement agree as
follows:
1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meaning assigned to such terms in the Recapitalization Agreement.
2. Assignment. Pursuant to Section 13.3 of the Purchase Agreement,
Sentinel hereby assigns a portion of its rights (the "Assignment") under the
Recapitalization Agreement to purchase the Purchase Shares to the Assignees such
that upon consummation of the Recapitalization Agreement the parties hereto
shall purchase the Purchase Shares in the proportions set forth on Schedule A
attached hereto. In conjunction with the Assignment, each of the Assignees (A)
accepts (i) the obligation to pay the portion of the Equity Purchase Price
allocable to the Purchase Shares which each such Assignee shall purchase and
(ii) the obligation to pay a proportionate amount (based on the number of
Purchase Shares purchased) of any indemnification payments made by
<PAGE> 2
Sentinel pursuant to the Recapitalization Agreement, and (B) is assigned the
right to be paid a proportionate amount (based on the number of Purchase Shares
purchased) of any indemnification payments made by the NPC Group to the Investor
Indemnitees pursuant to the Recapitalization Agreement; provided that nothing
herein shall release Sentinel of any of its obligations or liabilities under the
Recapitalization Agreement. Except as expressly provided herein, this Assignment
Agreement shall not otherwise affect any of the rights or obligations of any of
the parties to the Recapitalization Agreement.
3. Miscellaneous.
(a) GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAWS OF
CONFLICTS, OF THE STATE OF DELAWARE.
(b) Counterparts. This Assignment Agreement may be executed in
one or more counterparts (including by means of telecopied signature pages), any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same agreement.
* * * * *
- 2 -
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement on the date first written above.
SENTINEL CAPITAL PARTNERS, L.P.
By Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ David S. Lobel
Name: David S. Lobel
Title: Secretary
SENTINEL CAPITAL PARTNERS II, L.P.
By Sentinel Partners II, L.P.
Its: General Partner
By: Sentinel Partners II, Inc.
Its: General Partner
By: /s/ David S. Lobel
Name: David S. Lobel
Title: President & Secretary
OMEGA PARTNERS, L.P.
By: /s/Michael J. Myers
Name: Michael J. Myers
Title: General Partner
- 3 -
<PAGE> 4
TRAVELERS CASUALTY AND SURETY
COMPANY
By: /s/ Craig H. Farnsworth
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE TRAVELERS INSURANCE COMPANY
By: /s/ Craig H. Farnsworth
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE TRAVELERS LIFE AND ANNUITY
COMPANY
By: /s/ Craig H. Farnsworth
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE PHOENIX INSURANCE COMPANY
By: /s/ Craig H. Farnsworth
Name: Craig H. Farnsworth
Title: 2nd Vice President
PROVIDENT FINANCIAL GROUP, INC.
By:
Name:
Title:
- 4 -
<PAGE> 5
Acknowledged by:
Romacorp, Inc.
By: /s/ Robert B. Page
Name: Robert B. Page
Title: President
NPC International, Inc.
By:______________________
Name:
Title:
NPC Restaurant Holdings, Inc.
By:______________________
Name:
Title:
- 5 -
<PAGE> 6
SCHEDULE A
NAME PERCENTAGE
- ---- ----------
Sentinel Capital Partners, L.P. 22.222%
Sentinel Capital Partners II, L.P. 43.956%
Omega Partners, L.P. 0.637%
The Provident Financial Group, Inc. 0.593%
Travelers Indemnity Company 5.541%
Travelers Insurance Company 5.667%
Travelers Life & Annuity Company 0.630%
Phoenix Insurance Company 0.756%
- 6 -
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
ROMACORP OPERATING COMPANY, INC.
UNDER SECTION 242 OF THE DELAWARE CORPORATION LAW
Pursuant to Section 242 of the Delaware Corporation Law of the State of
Delaware, the undersigned, being the Vice President of Romacorp Operating
Company, Inc., a Delaware corporation (the "Corporation"), does hereby certify
the following:
FIRST: The name of the Corporation is Romacorp Operating Company, Inc.
SECOND: The Certificate of Incorporation of the Corporation was filed
with the Secretary of State of Delaware on June 4, 1998.
THIRD: The Certificate of Incorporation of the Corporation is hereby
amended to effect a change in Article One thereof, relating to the name of the
Corporation. Accordingly, Article One of the Certificate of Incorporation shall
be amended to read in its entirety as follows:
ARTICLE ONE
The name of the corporation is Romacorp, Inc. (hereinafter called the
"Corporation").
FOURTH: The amendment to the Certificate of Incorporation of the
Corporation effected hereby was approved by the Board of Directors of the
Corporation, and by a majority of the stockholders of the Corporation.
IN WITNESS WHEREOF, the undersigned, being the Vice President of the
Corporation, under the penalties of perjury, does hereby declare and certify
that this is the act and deed of the Corporation and the facts stated herein are
true, and accordingly has hereunto signed this Amendment to the Certificate of
Incorporation as of this _____ day of July, 1998.
ROMACORP OPERATING COMPANY, INC.
By:
Name: David G. Short
Title: Vice President
<PAGE> 2
CERTIFICATE OF INCORPORATION
OF
ROMACORP OPERATING COMPANY, INC.
ARTICLE ONE
The name of the corporation is Romacorp Operating Company, Inc.
(hereinafter called the "Corporation").
ARTICLE TWO
The address of the Corporation's registered office in the state of
Delaware is 1013 Centre Road, Wilmington, Delaware 19805, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is Corporation Service Company.
ARTICLE THREE
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE FOUR
The total number of shares which the Corporation shall have the authority
to issue is One Thousand (1,000) shares, all of which shall be shares of Common
Stock, with a par value of $0.01 (One Cent) per share.
ARTICLE FIVE
The name and mailing address of the incorporator is as follows:
Name Address
Cindy Rashed Kirkland & Ellis
153 East 53rd Street, 39th Fl.
New York, NY 10022
<PAGE> 3
ARTICLE SIX
The Corporation is to have a perpetual existence.
ARTICLE SEVEN
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to make,
alter or repeal the by-laws of the Corporation.
ARTICLE EIGHT
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places
as may be designated from time to time by the board of directors or in the
by-laws of the Corporation. Election of directors need not be by written ballot
unless the by-laws of the Corporation so provide.
ARTICLE NINE
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE TEN
The Corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights upon stockholders herein are granted subject to this reservation.
<PAGE> 4
I, the undersigned, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation in pursuance of the General Corporation Law of
the State of Delaware, do make and file this Certificate, hereby declaring and
certifying that the facts herein stated are true, and accordingly have hereunto
set my hand this 4th day of June 1998.
----------------------------------
Cindy Rashed
Sole Incorporator
<PAGE> 1
Exhibit 3.2
CERTIFICATE OF INCORPORATION
OF
ROMA SYSTEMS, INC.
ARTICLE ONE
Name
The name of the corporation is Roma Systems, Inc.
ARTICLE TWO
Registered Agent
The address of the corporation's registered office in Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County. The
name of the corporation's registered agent at such address is The Corporation
Trust Company.
ARTICLE THREE
Purpose
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE FOUR
Capital Stock
The aggregate number of shares of stock that the corporation shall have
authority to issue is one thousand (1,000). All of such shares shall be of the
par value of $0.01 per share, shall be of the same class and shall be designated
as "Common Stock."
<PAGE> 2
ARTICLE FIVE
Incorporator
The name and mailing address of the sole incorporator is as follows:
Name Address
David G. Short 10000 N. Central Expressway, Ste. 900
Dallas, TX 75231
ARTICLE SIX
Initial Directors
The number of directors constituting the initial Board of Directors is
one (1). Thereafter, the number of directors constituting the Board of Directors
shall be fixed by or in accordance with the bylaws of the corporation. The
following persons shall serve as directors of the corporation until the first
annual meeting of stockholders of the corporation or until their successors are
duly elected and qualified:
Name Address
Robert F. Murchison 10000 N. Central Expressway, Ste. 900
Dallas, TX 75231
ARTICLE SEVEN
Cumulative Voting Prohibited
Cumulative voting in the election of directors or otherwise is hereby
expressly prohibited.
ARTICLE EIGHT
Preemptive Rights Denied
No stockholder shall have, as a stockholder of the corporation, any
preemptive right to acquire, purchase or subscribe for the purchase of any or
all additional issues of stock of the corporation or any or all classes or
series thereof, or for any securities convertible into such stock, whether now
or hereafter authorized.
<PAGE> 3
ARTICLE NINE
Bylaws
The initial bylaws of the corporation shall be adopted by the Board of
Directors. The power to alter, amend or repeal the bylaws or adopt new bylaws,
subject to the right of the stockholders to adopt, amend or repeal the bylaws,
is vested in the Board of Directors.
ARTICLE TEN
Indemnification
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such officer or director is not entitled to be
indemnified by the corporation as authorized in this Article.
ARTICLE ELEVEN
Director Liability
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, a director or former
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. No repeal, amendment or modification of this Article, whether direct
or indirect, shall eliminate or reduce its effect with respect to any act or
omission of a director or former director of the corporation prior to such
repeal, amendment or modification.
<PAGE> 4
ARTICLE TWELVE
Amendments
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, I have hereunder set my hand this 11th day of Dec.,
1991.
/s/ David G. Short
----------------------------------------
David G. Short, Incorporator
<PAGE> 5
STATE OF TEXAS
COUNTY OF DALLAS
Before me, a notary public in and for said county and state personally
appeared David G. Short, known to me to be the person whose name is subscribed
to the foregoing document, and being by me first duly sworn, declared that he
executed the same as his free act and deed and that the statements contained
therein are true and correct. Given under my hand and seal this 11th day of
December, 1991.
/s/ Colleen Hassell
----------------------------------------
Notary Public in and for the State
of Texas
----------------------------------------
(Printed Name of Notary)
My Commission Expires:
- ---------------------
<PAGE> 6
CERTIFICATE OF OWNERSHIP AND MERGER
FOR MERGER
OF
FLORIDA CORPORATION
INTO
DELAWARE CORPORATION
Pursuant to the provisions of Article 607.234 of the Florida General
Corporation Act and Section 253 of the General Corporation law of Delaware, the
undersigned Florida parent corporation hereby certifies as follows:
1. The names of the undersigned Florida parent corporation and its
wholly-owned subsidiary, Delaware corporation are as follows:
<TABLE>
<CAPTION>
State of
Name Incorporation Status
---- ------------- ------
<S> <C> <C>
Roma Systems, Inc. Florida Parent
Roma Systems, Inc. Delaware Subsidiary
</TABLE>
2. By resolution dated December 20, 1991, a copy of which is attached
hereto as Exhibit "A", the Board of Directors of Roma Systems, Inc., a Florida
corporation ("Florida-Corp"), as prescribed by the Florida Business Corporation
Act, authorized and approved the merger of Florida- Corp with and into Roma
Systems, Inc., a Delaware corporation ("Delaware-Corp"), in accordance with that
certain Plan and Agreement of Merger dated as of December 23, 1991 (the "Plan of
Merger"). A copy of the Plan of Merger is attached hereto as Exhibit "B".
3. By resolution dated December 20, 1991, a copy of which is attached
hereto as Exhibit "C", the Board of Directors of Delaware-Corp, as prescribed by
the General Corporation Law of Delaware, authorized and approved the merger of
Florida-Corp with and into Delaware-Corp, in accordance with the Plan of Merger.
4. The laws of the States of Florida and Delaware permit such merger
and the approval of the Plan of Merger was duly authorized by all action
required by the laws of Florida and Delaware and by their constituent documents.
<PAGE> 7
5. The name of the surviving corporation is Roma Systems, Inc., and
such corporation is to be governed by the laws of the State of Delaware. The
address of its registered office in Delaware is: Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
6. Each of the undersigned corporations has only one class of shares
outstanding. As to each of the undersigned corporations, the number of shares
outstanding and the total number of shares voted for and against such Plan of
Merger and the total number of shares not voted are as follows:
<TABLE>
<CAPTION>
Number of Total Number Total Number Total Number
Name of Designation Shares of Shares of Shares of Shares
Corporation of Class Outstanding Voted For Voted Against Abstained
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida-Corp Common 326 326 0 0
Delaware-Corp Common 100 N/A N/A N/A
</TABLE>
7. The Plan of Merger was approved by the holders of a majority of the
outstanding Common Stock of Florida-Corp entitled to vote thereon pursuant to a
written consent of the sole shareholder of Florida-Corp dated as of December 20,
1991, duly executed in accordance with the provisions of Section 607.394 of the
Florida General Corporation Act.
8. Delaware-Corp, as the surviving corporation, hereby (i) agrees that
it may be served with process in the State of Florida in any proceeding for the
enforcement of any obligation of Florida-Corp and in any proceeding for the
enforcement of the rights of a surviving corporation, (ii) irrevocably appoints
the Secretary of State of Florida as its agent to accept service of process in
any such proceeding; and (iii) agrees that it will promptly pay to the
dissenting shareholders of Florida-Corp the amount, if any, to which they shall
be entitled under the provisions of the Florida Business Corporation Act with
respect to the rights of dissenting shareholders.
9. The effective date and time of the merger shall be 3:40 a.m.,
Eastern Standard Time, on December 30, 1991.
<PAGE> 8
EXECUTED as of December 23, 1991.
ROMA SYSTEMS, INC.,
a Florida corporation
By: /s/ Kenneth F. Reimer
------------------------------------
Kenneth F. Reimer, President
ATTEST:
/s/ David G. Short
- ------------------------------
David G. Short, Secretary
ROMA SYSTEMS, INC.,
a Delaware corporation
By: /s/ Kenneth F. Reimer
------------------------------------
Kenneth F. Reimer, President
ATTEST:
/s/ David G. Short
- -----------------------------
David G. Short, Secretary
<PAGE> 9
EXHIBIT A
RESOLUTIONS OF ROMA SYSTEMS, INC.
(FLORIDA)
<PAGE> 10
UNANIMOUS WRITTEN CONSENT OF DIRECTORS
OF ROMA SYSTEMS, INC.
DECEMBER 20, 1991
The undersigned, being all of the duly appointed and elected directors
of Roma Systems, Inc., a Florida corporation, pursuant to the Bylaws of this
Corporation and the Laws of the State of Florida, do hereby consent that when
all of the directors have signed this Consent, or an exact counterpart thereof,
the resolutions set forth below shall be passed and adopted as Resolutions of
the Directors with the same force and effect as if adopted at a meeting of the
Board of Directors duly called and held:
RESOLVED, that the form of Plan and Agreement of Merger (the "Plan of
Merger") attached as Exhibit "A", which sets forth the terms and
conditions of the proposed merger of Roma Systems, Inc., a Florida
corporation ("Systems Florida") with and into Roma Systems, Inc., a
Delaware corporation ("Systems Delaware"), its wholly-owned Delaware
subsidiary corporation (the "Merger") be and it hereby is approved, and
the officers of Systems Florida be and they hereby are authorized to
execute and deliver the Plan of Merger with such changes therein and
modifications thereto as the officers executing the same shall approve,
such approval to be conclusively evidenced by the execution thereof;
and
RESOLVED FURTHER, that the officers of Systems Florida be and they
hereby are authorized and empowered to cause its wholly-owned Delaware
subsidiary corporation to execute and deliver the Plan of Merger and,
upon obtaining approval of the Plan of Merger by the holders of at
least a majority of the outstanding shares of Systems Florida stock, to
merge Systems Florida into Systems Delaware in accordance with the Plan
of Merger, and to take such other and further actions as may be
necessary or appropriate to carry into effect all terms and provisions
of said Plan of Merger; and
RESOLVED FURTHER, that the Board of Directors of Systems Florida may
amend the Plan of Merger at any time prior to the filing of the Plan of
Merger with the Secretary of State of
<PAGE> 11
Florida and the Secretary of State of Delaware, provided that an
amendment made subsequent to the adoption of the Plan of Merger by the
stockholders of systems Florida shall not (1) alter or change the
amount or kind of stock to be received in exchange for or on conversion
of all or any of the stock of Systems Florida, (2) alter or change any
term of the Certificate of Incorporation of Systems Delaware, or (3)
alter or change any of the terms and conditions of the Plan of Merger
if such alteration or change would adversely affect the holders of
stock of Systems Florida; and
RESOLVED FURTHER, that the Plan of Merger may be terminated and the
Merger abandoned at any time prior to the filing of the Plan of Merger
with the Secretary of State of Florida and the Secretary of State of
Delaware, by the consent of the Board of Directors of Systems Florida;
and
RESOLVED FURTHER, that in order to effect the Merger, the officers of
Systems Florida be and they hereby are authorized and empowered to make
and execute or cause to be made and executed Articles of Merger and a
Certificate of Ownership and Merger and to cause same to be filed with
the Secretary of State of Florida and the Secretary of State of
Delaware, respectively, in the manner provided by law, and to take any
and all other actions that they deem necessary or desirable to effect
the Merger; and
RESOLVED FURTHER, that, upon effecting the Merger, each holder of a
certificate or certificates representing Capital Stock of Systems
Florida shall, upon surrendering such certificate or certificates of
the Systems Florida principal office, be entitled to receive in
exchange for a certificate or certificates of Systems Delaware stock as
provided for the Plan of Merger.
This action shall be effective as of December 20, 1991 on execution
hereof by all the Directors of the Corporation.
/s/ Robert F. Murchison
----------------------------------------
Robert F. Murchison
/s/ Burk C. Murchison
----------------------------------------
Burk C. Murchison
/s/ Kenneth F. Reimer
----------------------------------------
Kenneth F. Reimer
<PAGE> 12
EXHIBIT B
PLAN AND AGREEMENT OF MERGER
<PAGE> 13
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER (hereinafter referred to as this
"Agreement") dated as of December 23, 1991, is made and entered into by and
between Roma Systems, Inc., a Florida corporation ("Florida-Corp") and Roma
Systems, Inc., a Delaware corporation ("Delaware-Corp").
W I T N E S S E T H :
WHEREAS, Florida-Corp is a corporation organized and existing under the
laws of the State of Florida, having been incorporated on May 5, 1979; and
WHEREAS, Delaware-Corp is a wholly-owned subsidiary of Florida-Corp,
having been incorporated on December 16, 1991; and
WHEREAS, the Boards of Directors of Florida-Corp and Delaware-Corp
have determined that it is desirable to merge Florida-Corp into Delaware-Corp
(such merger being hereinafter referred to as the "Merger");
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that
Florida-Corp shall be merged into Delaware-Corp upon the terms and conditions
hereinafter set forth.
ARTICLE I
MERGER
At the effective time of the Merger (hereinafter referred to as the
"Effective Time") as provided herein, Florida-Corp shall be merged into
Delaware-Corp, the separate existence of Florida-Corp shall cease and
Delaware-Corp (hereinafter sometimes referred to as the "surviving Corporation")
shall continue to exist under the name of Roma Systems, Inc. by virtue of, and
shall be governed by, the laws of the State of Delaware. The address of the
registered office of the Surviving Corporation in the State of Delaware will be
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.
<PAGE> 14
ARTICLE II
CERTIFICATE OF INCORPORATION
OF SURVIVING CORPORATION
The Certificate of Incorporation of the Surviving Corporation shall be
the Certificate of Incorporation of Delaware-Corp as in effect on the date
hereof without change unless and until amended in accordance with applicable
law.
ARTICLE III
BYLAWS OF THE SURVIVING CORPORATION
The Bylaws of the Surviving Corporation shall be the Bylaws of
Delaware-Corp as in effect on the date hereof without change unless and until
amended or repealed in accordance with applicable law.
ARTICLE IV
EFFECT OF MERGER ON STOCK
OF CONSTITUENT CORPORATIONS
4.01 At the Effective Time, (i) each 3.26 outstanding shares of
Florida-Corp common stock, par value $1.00 per share ("Florida-Corp Common
Stock"), shall be converted into one share of Delaware-Corp common stock, par
value $.01 per share ("Delaware-Corp Common Stock"), (ii) each issued share of
Florida-Corp Common Stock held in treasury by Florida-Corp shall be returned and
canceled and no shares of Delaware-Corp Common Stock shall be issued in respect
thereof, and (iii) each outstanding share of Delaware-Corp Common Stock held by
Florida-Corp shall be retired and canceled.
4.02 At and after the Effective Time, all of the outstanding
certificates which prior to that time represented shares of Florida-Corp Common
Stock shall be deemed for all purposes to evidence ownership of and to represent
shares of Delaware-Corp Common Stock into which the shares of Florida-Corp
Common Stock represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of Delaware-Corp.
The registered owners of any such outstanding stock certificate shall, until
such certificate shall have been surrendered for transfer or conversion or
otherwise accounted for to Florida-Corp, have and be entitled to exercise any
voting and other rights with respect to and to receive any dividend and other
distributions upon the shares of Delaware-Corp Common Stock evidenced by such
outstanding certificate as above provided.
-2-
<PAGE> 15
ARTICLE V
CORPORATION EXISTENCE, POWERS AND LIABILITIES
OF SURVIVING CORPORATION
5.01 At the Effective Time, the separate existence of Florida-Corp
shall cease. Florida-Corp shall be merged with an into Delaware-Corp, the
Surviving Corporation, in accordance with the provisions of this Agreement.
Thereafter, Delaware-Corp shall possess all the rights, privileges, powers and
franchises as well of a public as of a private nature, and shall be subject to
all the restrictions, disabilities and duties of each of the parties to this
Agreement; and all and singular, the rights, privileges, powers and franchises
of Florida-Corp and Delaware-Corp, and all property, real, personal and mixed,
and all debts due to each of them on whatever account, shall be vested in
Delaware-Corp; and all property, rights, privileges, powers and franchises, and
all and every other interest shall be thereafter as effectually the property of
Delaware-Corp, the Surviving Corporation, as they were of the respective
constituent entities, and the title to any real estate, whether by deed or
otherwise, vested in Florida-Corp and Delaware-Corp, or either of them, shall
not revert or be in any way impaired by reason of the Merger; but all rights of
creditors and all liens upon any property of the parties hereto, shall be
preserved, unimpaired, and all debts, liabilities and duties of the respective
constituent entities, shall thenceforth attach to Delaware-Corp, and may be
enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.
5.02 Florida-Corp agrees that it will execute and deliver, or cause to
be executed and delivered, all such deeds, assignments and other instruments,
and will take or cause to be taken such further or other action as the Surviving
Corporation may deem necessary or desirable in order to vest in and confirm to
the Surviving Corporation title to and possession of all the property, rights,
privileges, immunities, powers, purposes and franchises, and all and every other
interest, of Florida-Corp and otherwise to carry out the intent and purposes of
the Agreement.
ARTICLE VI
OFFICERS AND DIRECTORS OF
SURVIVING CORPORATION
6.01 At the Effective Time, the officers and directors of the Surviving
Corporation shall be the officers and directors of
-3-
<PAGE> 16
Florida-Corp in office at such date, and such persons shall hold office in
accordance with the Bylaws of the Surviving Corporation or until their
respective successors shall have been appointed or elected.
6.02 If, at the Effective Time, a vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy shall be filled in the
manner provided by its Bylaws.
ARTICLE VII
APPROVAL BY SHAREHOLDERS; EFFECTIVE TIME; AMENDMENT
7.01 This Agreement and the Merger contemplated hereby are subject to
approval by the requisite vote of shareholders in accordance with applicable
Florida law. As promptly as practicable after approval of this Agreement by
shareholders in accordance with applicable law, duly authorized officers of the
respective parties shall make and execute Articles of Merger and a Certificate
of Ownership and Merger and shall cause such documents to be filed with the
Secretary of State of Florida and the Secretary of State of Delaware,
respectively, in accordance with the laws of the States of Florida and Delaware.
7.02 The Effective Time of the Merger shall be 3:40 a.m., Eastern
Standard Time, on December 30, 1991.
7.03 The Board of Directors of Florida-Corp and Delaware-Corp may amend
this Agreement at any time prior to the Effective Time, provided that an
amendment made subsequent to the approval of the Merger by the shareholders of
Florida-Corp shall not (1) alter or change the amount or kind of shares to be
received by exchange for or on conversion of all or any of the shares of
Florida-Corp Common Stock or Delaware-Corp Common Stock, (2) alter or change any
term of the Certificate of Incorporation of the Surviving Corporation, or (3)
alter or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of Florida-Corp Common
Stock or Delaware-Corp Common Stock.
ARTICLE VIII
TERMINATION OF MERGER
This Agreement may be terminated and the Merger abandoned at any time
prior to the filing of this Agreement with the Secretary of State of Florida and
the Secretary of State of Delaware, whether before or after shareholder approval
of this Agreement, by the
-4-
<PAGE> 17
consent of the Boards of Directors of Florida-Corp and Delaware Corp.
ARTICLE IX
MISCELLANEOUS
In order to facilitate the filing and recording of this Agreement, this
Agreement may be executed in counterparts, each of which when so executed shall
be deemed to be an original and all such counterparts shall together constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, all as of the day and year first above
written.
ROMA SYSTEMS, INC.,
a Florida corporation
By: /s/ Kenneth F. Reimer
------------------------------------
Kenneth F. Reimer, President
ATTEST:
/s/ David G. Short
- ------------------------
David G. Short, Secretary
ROMA SYSTEMS, INC.,
a Delaware corporation
By: /s/ Kenneth F. Reimer
------------------------------------
Kenneth F. Reimer, President
ATTEST:
/s/ David G. Short
- ------------------------
David G. Short, Secretary
-5-
<PAGE> 18
EXHIBIT C
RESOLUTIONS OF ROMA SYSTEMS, INC.
(DELAWARE)
<PAGE> 19
UNANIMOUS WRITTEN CONSENT OF DIRECTORS
OF ROMA SYSTEMS, INC.
DECEMBER 20, 1991
The undersigned, being the initial Director of Roma Systems, Inc., a
Delaware corporation, hereby consents to, adopts, and approves the following
Resolutions pursuant to the general corporation law of the State of Delaware:
RESOLVED, that the form of Plan and Agreement of Merger (the "Plan of
Merger") attached as Exhibit "A", which sets forth the terms and
conditions of the proposed merger of Roma Systems, Inc., a Florida
corporation ("Systems Florida") with and into Roma Systems, Inc., a
Delaware corporation ("Systems Delaware"), its wholly-owned Delaware
subsidiary corporation (the "Merger") be and it hereby is approved, and
the officers of Systems Delaware be and they hereby are authorized to
execute and deliver the Plan of Merger with such changes therein and
modifications thereto as the officers executing the same shall approve,
such approval to be conclusively evidenced by the execution thereof;
and
RESOLVED FURTHER, that the officers of Systems Delaware be and they
hereby are authorized and empowered to execute and deliver the Plan of
Merger and to merge Systems Florida into Systems Delaware in accordance
with the Plan of Merger, and to take such other and further actions as
may be necessary or appropriate to carry into effect all terms and
provisions of said Plan of Merger; and
RESOLVED FURTHER, that the Board of Directors of Systems Delaware may
amend the Plan of Merger with the Secretary of State of Florida and the
Secretary of State of Delaware, provided that an amendment made
subsequent to the adoption of the Plan of Merger by the stockholders of
Systems Delaware shall not (1) alter or change the amount or kind of
stock to be received in exchange for or on conversion of all or any of
the stock of Systems Florida, (2) alter or change any term of the
Certificate of Incorporation of Systems Delaware, or (3) alter or
change any of the terms and conditions of the Plan of Merger if such
alteration or change would adversely affect the holders of stock of
Systems Delaware; and
RESOLVED FURTHER, that the Plan of Merger may be terminated and the
Merger abandoned at any time prior to the filing of the Plan of Merger
with the Secretary of State of Florida and
<PAGE> 20
the Secretary of State of Delaware, by the consent of the Board of
Directors of Systems Delaware; and
RESOLVED FURTHER, that in order to effect the Merger, the officers of
Systems Delaware be and they hereby are authorized and empowered to
make and execute or cause to be made and executed Articles of Merger
and a Certificate of ownership and Merger and to cause same to be filed
with the Secretary of State of Florida and the Secretary of State of
Delaware, respectively, in the manner provided by law, and to take any
and all other actions that they deem necessary or desirable to effect
the Merger; and
RESOLVED FURTHER, that, upon effecting the Merger, each holder of a
certificate or certificates representing stock of Systems Florida
shall, upon surrendering such certificate or certificates to Systems
Florida principal office, be entitled to receive in exchange a
certificate or certificates of Systems Delaware stock as provided for
in the Plan of Merger.
This action shall be effective as of December 20, 1991 on execution
hereof by the Director of the Corporation.
/s/ Robert F. Murchison
----------------------------------------
<PAGE> 1
Exhibit 3.3
CERTIFICATE OF INCORPORATION
OF
ROMA HOLDINGS, INC.
ARTICLE ONE
Name
The name of the corporation is Roma Holdings, Inc.
ARTICLE TWO
Registered Agent
The address of the corporation's registered office in Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County. The
name of the corporation's registered agent at such address is The Corporation
Trust Company.
ARTICLE THREE
Purpose
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE FOUR
Capital Stock
The aggregate number of shares of stock which that the corporation
shall have authority to issue is one hundred (100). All of such shares shall be
of the par value of $0.01 per share, shall be of the same class and shall be
designated as "Common Stock."
ARTICLE FIVE
Incorporator
The name and mailing address of the sole incorporator is as follows:
Name Address
David G. Short 9304 Forest Lane, Suite 200
Dallas, TX 75243
ARTICLE SIX
Initial Directors
The number of directors constituting the initial Board of Directors is
three (3). Thereafter, the number of directors constituting the Board of
Directors shall be fixed by or in
<PAGE> 2
accordance with the bylaws of the corporation. The following shall serve as
directors of the corporation until the first annual meeting of stockholders of
the corporation or until his successor is duly elected and qualified:
Name Address
O. Gene Bicknell 720 West 20th Street
Pittsburg, KS 66762
James K. Schwartz 720 West 20th Street
Pittsburg, KS 66762
Troy D. Cook 720 West 20th Street
Pittsburg, KS 66762
ARTICLE SEVEN
Cumulative Voting Prohibited
Cumulative voting in the election of directors or otherwise is hereby
expressly prohibited.
ARTICLE EIGHT
Preemptive Rights Denied
No stockholder shall have, as a stockholder of the corporation, any
preemptive right to acquire, purchase or subscribe for the purchase of any or
all additional issues of stock of the corporation or any or all classes or
series thereof, or for any securities convertible into such stock, whether now
or hereafter authorized.
ARTICLE NINE
Bylaws
The initial bylaws of the corporation shall be adopted by the Board of
Directors. The power to alter, amend or repeal the bylaws or adopt new bylaws,
subject to the right of the stockholders to adopt, amend or repeal the bylaws,
is vested in the Board of Directors.
ARTICLE TEN
Indemnification
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
<PAGE> 3
Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such officer or director is not entitled to be
indemnified by the corporation as authorized in this Article.
ARTICLE ELEVEN
Director Liability
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended form time to time, a director or former
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. No repeal, amendment or modification of this Article, whether direct
or indirect, shall eliminate or reduce its effect with respect to any act or
omission of a director or former director of the corporation prior to such
repeal, amendment or modification.
ARTICLE TWELVE
Amendments
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, I have hereunder set my hand this 31st day of
December, 1996.
/s/ David G. Short
----------------------------------------
David G. Short, Incorporator
<PAGE> 1
Exhibit 3.4
CERTIFICATE OF INCORPORATION
OF
ROMA HUNTINGTON BEACH, INC.
ARTICLE ONE
NAME
The name of the corporation is Roma Huntington Beach, Inc.
ARTICLE TWO
REGISTERED AGENT
The address of the corporation's registered office in Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County. The
name of the corporation's registered agent at such address is The Corporation
Trust Company.
ARTICLE THREE
PURPOSE
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE FOUR
CAPITAL STOCK
The aggregate number of shares of stock that the corporation shall have
authority to issue is one hundred (100). All of such shares shall be of the par
value of $0.01 per share, shall be of the same class and shall be designated as
"Common Stock."
<PAGE> 2
ARTICLE FIVE
INCORPORATOR
The name and mailing address of the sole incorporator is as follows:
Name Address
David G. Short 10000 N. Central Expressway, Ste. 900
Dallas, TX 75231
ARTICLE SIX
INITIAL DIRECTOR
The number of directors constituting the initial Board of Directors is
one (1). Thereafter, the number of directors constituting the Board of Directors
shall be fixed by or in accordance with the bylaws of the corporation. The
following person shall serve as director of the corporation until the first
annual meeting of stockholders of the corporation or until his successor is duly
elected and qualified:
Name Address
David G. Short 10000 N. Central Expressway, Ste. 900
Dallas, TX 75231
ARTICLE SEVEN
CUMULATIVE VOTING PROHIBITED
Cumulative voting in the election of directors or otherwise is hereby
expressly prohibited.
ARTICLE EIGHT
PREEMPTIVE RIGHTS DENIED
No stockholder shall have, as a stockholder of the corporation, any
preemptive right to acquire, purchase or subscribe for the purchase of any or
all additional issues of stock of the corporation or any or all classes or
series thereof, or for any securities convertible into such stock, whether now
or hereafter authorized.
<PAGE> 3
ARTICLE NINE
BYLAWS
The initial bylaws of the corporation shall be adopted by the Board of
Directors. The power to alter, amend or repeal the bylaws or adopt new bylaws,
subject to the right of the stockholders to adopt, amend or repeal the bylaws,
is vested in the Board of Directors.
ARTICLE TEN
INDEMNIFICATION
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such officer or director is not entitled to be
indemnified by the corporation as authorized in this Article.
ARTICLE ELEVEN
DIRECTOR LIABILITY
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, a director or former
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. No repeal, amendment or modification of this Article, whether direct
or indirect, shall eliminate or reduce its effect with respect to any act or
omission of a director or former director of the corporation prior to such
repeal, amendment or modification.
<PAGE> 4
ARTICLE TWELVE
AMENDMENTS
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, I have hereunder set my hand this 20th day of
January, 1993.
/s/ David G. Short
----------------------------------------
David G. Short, Incorporator
<PAGE> 5
STATE OF TEXAS
COUNTY OF DALLAS
Before me, a notary public in and for said county and state, personally
appeared David G. Short, known to me to be the person whose name is subscribed
to the foregoing document, and being by me first duly sworn, declared that he
executed the same as his free act and deed and that the statements contained
therein are true and correct. Given under my hand and seal this 20th day of
January, 1993.
/s/ Colleen Hassell
----------------------------------------
Notary Public in and for the State
of Texas
----------------------------------------
(Printed Name of Notary)
My Commission Expires:
- ---------------------
<PAGE> 1
Exhibit 3.5
ARTICLES OF INCORPORATION
OF
ROMA BAR MANAGEMENT CORPORATION
I, the undersigned natural person of the age of eighteen (18) years or
more, acting as incorporator of a corporation under the Texas Business
Corporation, Act, do hereby adopt the following Articles of Incorporation for
such corporation:
ARTICLE I
The name of the corporation is Roma Bar Management Corporation.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is organized for the purpose of engaging in any lawful
act, activity and/or business for which corporations may be organized under the
Texas Business Corporation Act.
-1-
<PAGE> 2
ARTICLE IV
The aggregate number of shares which the corporation shall have
authority to issue is One Thousand (1,000) shares of common capital stock of the
par value of One Dollar ($1.00) each.
ARTICLE V
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of $1,000.00, consisting
of money, labor done or property actually received, which sum is not less than
$1,000.00.
ARTICLE VI
The address of its initial registered office is 3200 RepublicBank
Tower, Dallas, Texas 75201, and the name of its initial registered agent at such
address is CT Corporation Systems.
ARTICLE VII
The number of directors of this corporation shall be not less than two
(2) nor more than five (5), the exact number to be fixed from time to time in
the manner provided in the Bylaws of the corporation. The number of directors
constituting the initial Board of Directors is three (3), and the names and
addresses of
-2-
<PAGE> 3
the persons who are to serve as directors until the first annual meeting of the
shareholders or until their successors are elected and qualified are:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
C. W. Murchison, Jr. 1400 Expressway Tower
Dallas, Texas 75206
Robert F. Murchison 1400 Expressway Tower
Dallas, Texas 75206
Kenneth F. Reimer 1400 Expressway Tower
Dallas, Texas 75206
Clint W. Murchison, III 1400 Expressway Tower
Dallas, Texas 75206
Burk C. Murchison 1400 Expressway Tower
Dallas, Texas 75206
</TABLE>
The Board of Directors shall have the power to alter, amend or
repeal the Bylaws of the corporation or to adopt new Bylaws.
The name and address of the incorporator is:
Name Address
William D. Moon 2200 InterFirst One
Dallas, Texas 75202
ARTICLE VIII
All of this corporation's directors and officers and former directors
and officers and all persons who may have served at this corporation's request
as a director or officer of another corporation in which this corporation owns
shares of capital stock or of which this corporation is a creditor, shall be
indemnified against expenses actually and necessarily incurred by
-3-
<PAGE> 4
them in connection with the defense of any threatened, pending or completed
action, suit or proceeding in which they, or any of them, are made parties or a
party, by reason of being or having been directors or officers or a director or
officer of this corporation, or of such other corporation, except in relation to
matters as to which any such director or officer or former director or officer
or person shall be adjudged in such action, suit or proceeding to be liable for
negligence or misconduct. The foregoing right to indemnity shall include
reimbursement of the amounts and expenses paid or incurred in settlement thereof
or a plea of nolo contendere (or other plea of substantially the same import and
effect) in the opinion of counsel for this corporation appears to be in the
interest of this corporation. Such indemnification shall not be deemed exclusive
of any other rights to which those indemnified may be entitled by law or under
any by-laws, agreement, vote of stockholders or otherwise.
ARTICLE IX
The right to accumulate votes in the election of directors, and/or
cumulative voting by any shareholder is hereby expressly denied.
ARTICLE X
-4-
<PAGE> 5
No stockholder of this corporation shall, by reason of his holding
shares of any class of stock of this corporation, have any preemptive or
preferential right to purchase or subscribe for any shares of any class of stock
of this corporation, now or hereafter to be authorized, or any notes,
debentures, bonds or other securities convertible into or carrying options,
warrants or rights to purchase shares of any class, now or hereafter to be
authorized, whether or not the issuance of any such shares or such notes,
debentures, bonds or other securities would adversely affect the dividend or
voting rights of any such shareholder, other than such rights, if any, as the
Board of Directors, at its discretion, from time to time may grant, and at such
price as the Board of Directors at its discretion may fix; and the Board of
Directors may issues shares of any class of stock of this corporation or any
notes, debentures, bonds or other securities convertible into or carrying
options, warrants or rights to purchase shares of any class without offering any
such shares of any class or such notes, debentures, bonds or other securities
either in whole or in part to the existing shareholders of any class.
ARTICLE XI
No contract or other transaction between this corporation and any
person, firm, association or corporation and
-5-
<PAGE> 6
no act of this corporation, shall, in the absence of fraud, be invalidated or in
any way affected by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested, directly or indirectly, in such contract,
transaction or act, or are related to or interested in such person, firm,
association or corporation as a director, stockholder, officer, employee, member
or otherwise. Any director so interested or related who is present at any
meeting of the Board of Directors or committee of directors at which action on
any such director may be counted in determining the approval of any such
contract, transaction or act. No director so interested or related shall,
because of such interest or relationship, be disqualified from holding his
office or be liable to the corporation or to any stockholder or creditor thereof
for any loss incurred by this corporation under or reason of such contract,
transaction or act, or be accountable for any gains or profits he may have
realized therein.
-6-
<PAGE> 7
IN WITNESS WHEREOF, I have hereunto set my hand, this 9th day
of January, 1984.
/s/ William D. Moon
----------------------------------------
William D. Moon
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, a Notary Public, do hereby certify that on this 9th day of
January, 1984, personally appeared before me William D. Moon, who being by me
first duly sworn, declared that he is the person who signed the foregoing
document as incorporator, and that the statements therein contained are true.
/s/ Carol Dorsey
----------------------------------------
Notary Public in and for
the State of Texas
( S E A L )
My Commission Expires:
4/6/85
- ------------------------
-7-
<PAGE> 1
Exhibit 3.6
ARTICLES OF INCORPORATION
OF
ROMA FORT WORTH, INC.
I, the undersigned natural person of the age of eighteen (18) years or
more, acting as incorporator of a corporation under the Texas Business
Corporation, Act, do hereby adopt the following Articles of Incorporation for
such corporation:
ARTICLE I
The name of the corporation is Roma Fort Worth, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is organized for the purpose of engaging in any lawful
act, activity and/or business for which corporations may be organized under the
Texas Business Corporation Act.
ARTICLE IV
The aggregate number of shares which the corporation shall have authority
to issue is Ten Thousand (10,000) shares of common capital stock of the par
value of One Dollar ($1.00) each.
-1-
<PAGE> 2
ARTICLE V
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of $1,000.00, consisting of
money, labor done or property actually received, which sum is not less than
$1,000.00.
ARTICLE VI
The address of its initial registered office is 3200 Republic Bank Tower,
Dallas, Texas, and the name of its initial registered agent at such address is
CT Corporation Systems.
ARTICLE VII
The number of directors of this corporation shall be not less than two (2)
nor more than nine (9), the exact number to be fixed from time to time in the
manner provided in the Bylaws of the corporation. The number of directors
constituting the initial Board of Directors is two (2), and the names and
addresses of the persons who are to serve as directors until the first annual
meeting of the shareholders or until their successors are elected and qualified
are:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Robert F. Murchison 9400 N. Central Expressway
Suite 1500
Dallas, Texas 75231
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Kenneth F. Reimer 9400 N. Central Expressway
Suite 1500
Dallas, Texas 75231
</TABLE>
The Board of Directors shall have the power to alter, amend or
repeal the Bylaws of the corporation or to adopt new Bylaws.
The name and address of the incorporator is:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
William D. Moon 2200 InterFirst One
Dallas, Texas 75202
</TABLE>
ARTICLE VIII
Indemnification
A. Definitions
1. "Director" means any person who is or was a director of the corporation
and any person who, while a director of the corporation, is or was serving at
the request of the corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of any other
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise.
2. "Expenses" include (but are not limited to) court costs and attorneys'
fees.
3. "Official Capacity" means:
-3-
<PAGE> 4
(a) when used with respect to a director, the office of director in
the corporation; and
(b) when used with respect to a person other than a director, the
elective or appointive office in the corporation held by the officer or
the employment or agency relationship undertaken by the employee or agent
in behalf of the corporation, but in each case does not include service
for any other foreign or domestic corporation or any partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or other
enterprise.
4. "Proceeding" means any threatened, pending, or completed action, suit
or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any inquiry
or investigation that could lead to such an action, suit or proceeding.
B. Standard. The corporation may indemnify a person who was, is, or
threatened to be made a named Defendant or respondent in a Proceeding because
the person is or was a director of the corporation only if it is determined in
accordance with section F of this Article that the person:
1. conducted himself in good faith;
2. reasonably believed:
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<PAGE> 5
(a) in the case of conduct in his official capacity as a director of
the corporation, that his conduct was in the corporation's best interest;
and
(b) in all other cases, that his conduct was at least not opposed to
the corporation's best interests; and
3. in the case of any criminal Proceeding, had no reasonable cause to
believe his conduct was unlawful.
C. Exclusions. A director may not be indemnified under Section B of this
Article for obligations resulting from a Proceeding:
1. in which the person is found liable on the basis that personal benefit
was improperly received by him, whether or not the benefit resulted from an
action taken in the person's official capacity; or
2. in which the person is found liable to the corporation.
D. Effect of Judgment, etc. The termination of a Proceeding by judgment,
order, settlement, or conviction, or on a plea of nolo contendere or its
equivalent is not of itself determinative that the person did not meet the
requirements set forth in Section B of this Article.
E. Extent. A person may be indemnified under Section B of this Article
against judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses actually incurred by the person in
connection with the
-5-
<PAGE> 6
Proceeding; but if the Proceeding was brought by or in behalf of the
corporation, the indemnification is limited to reasonable expenses actually
incurred by the person in connection with the Proceeding.
F. Determination that Standard has been Met. A determination of
indemnification under Section B of this Article must be made:
1. by a majority vote of a quorum consisting of directors who at the time
of the vote are not named defendants or respondents in the Proceeding;
2. if such a quorum cannot be obtained, by a majority vote of a committee
of the Board of Directors, designated to act in the matter by a majority vote of
all directors, consisting solely of two or more directors who at the time of the
vote are not named defendants or respondents in the Proceeding;
3. by special legal counsel selected by the Board of Directors or a
committee of the board by vote as set forth in subsection 1 or 2 of this
section, or, if such a quorum cannot be obtained and such a committee cannot be
established, by a majority vote of all directors; or
4. by the shareholders in a vote that excludes the shares held by
directors who are named defendants or respondents in the Proceeding.
-6-
<PAGE> 7
G. Authorization of Indemnification. Authorization of indemnification and
determination as to reasonableness of expenses must be made in the same manner
as the determination that indemnification is permissible, except that if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to reasonableness
of expenses must be made in the manner specified by subsection 3 of section F of
this Article for the selection of special legal counsel.
H. Mandatory Indemnification. The corporation shall indemnify a director
against reasonable expenses incurred by him in connection with a Proceeding in
which he is a party because he is a director if he has been wholly successful,
on the merits or otherwise, in the defense of the Proceeding.
I. Court Determination of Mandatory Indemnification. If, in a suit for the
indemnification required by section H of this Article, a court of competent
jurisdiction determines that the director is entitled to indemnification under
that section, the court shall order indemnification and shall award to the
director the expenses incurred in securing the indemnification.
J. Court Determination of Other Indemnification. If a court of competent
jurisdiction determines that a director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not he has
met the
-7-
<PAGE> 8
requirements set forth in section B of this Article or has been adjudged liable
in the circumstances described by section C of this Article, the court may order
the indemnification that the court determines is proper and equitable. The court
shall limit indemnification to reasonable expenses if the proceeding is brought
by or in behalf of the corporation or if the director is found liable on the
basis that personal benefit was improperly received by him, whether or not the
benefit resulted from an action taken in the person's official capacity.
K. Advance Payment. Reasonable expenses incurred by a director who was, or
is threatened to be made, a named defendant or respondent in a Proceeding may be
paid or reimbursed by the corporation in advance of the final disposition of the
Proceeding after:
1. the corporation receives a written affirmation by the director of his
good faith belief that he has met the standard of conduct necessary for
indemnification under this Article and a written undertaking by or on behalf of
the director to repay the amount paid or reimbursed if it is ultimately
determined that he has not met those requirements;
2. a determination that the facts then known to those making the
determination would not preclude indemnification under this Article.
-8-
<PAGE> 9
L. Written Undertaking. The written undertaking required by section K of
this Article must be an unlimited general obligation of the director but need
not be secured. It may be accepted without reference to financial ability to
make repayment. Determinations and authorizations of payments under section K of
this Article must be made in the manner specified by section F of this Article
for determining that indemnification is permissible.
M. Expenses as Witness. Notwithstanding any other provision of this
Article, the corporation may pay or reimburse expenses incurred by a director in
connection with his appearance as a witness or other participation in a
Proceeding at a time when he is not a named defendant or respondent in the
Proceeding.
N. Extent of Indemnification of Officers, Etc. The corporation shall
indemnify and advance expenses to an officer, employee, or agent of the
corporation to the same extent that it may indemnify and advance expenses to
directors under this Article, and notwithstanding subsection C(2) of this
Article, shall do so even if such person is found liable to the corporation, if
all other requirements set forth in this Article are met.
O. Extent of Indemnification of Others. The corporation may indemnify and
advance expenses to nominees and designees whether or not they are or were
officers, employees, or agents of
-9-
<PAGE> 10
the corporation who are or were serving at the request of the corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, other enterprise, or employee benefit
plan to the same extent that it may indemnify and advance expenses to officers
under this Article. Article shall be reported in writing to the shareholders of
the corporation with or before the notice or waiver of notice of the next
shareholders' meeting or with or before the next submission to shareholders of a
consent to action without a meeting pursuant to Section A, Article 9.10, of the
Texas Business Corporation Act and, in any case, within the 12-month period
immediately following the date of the indemnification or advance.
T. Service to Employee Benefit Plans. For purposes of this Article, the
corporation is deemed to have requested a director to serve an employee benefit
plan whenever the performance by him of his duties to the corporation also
imposes duties on or otherwise involves services by him to the plan or the
participants or beneficiaries of the plan. Excise taxes assessed against a
director with respect to an employee benefit plan pursuant to applicable law are
deemed fines. Actions taken or omitted by him with respect to an employee
benefit plan in the performance of his duties for a purpose reasonably believed
by
-10-
<PAGE> 11
him to be in the interest of the participants and beneficiaries of the plan is
deemed to be for a purpose which is not opposed to the best interest of the
corporation.
ARTICLE IX
The right to accumulate votes in the election of directors, and/or
cumulative voting by any shareholder is hereby expressly denied.
ARTICLE X
No stockholder of this corporation shall, by reason of his holding shares
of any class of stock of this corporation, have any preemptive or preferential
right to purchase or subscribe for any shares of any class of stock of this
corporation, now or hereafter to be authorized, or any notes, debentures, bonds
or other securities convertible into or carrying options, warrants or rights to
purchase shares of any class, now or hereafter to be authorized, whether or not
the issuance of any such shares or such notes, debentures, bonds or other
securities would adversely affect the dividend or voting rights of any such
shareholder, other than such rights, if any, as the Board of Directors, at its
discretion, from time to time may grant, and at such price as the Board of
Directors at its discretion may fix; and the Board of Directors may issue shares
of any class of stock of this corporation or any notes, debentures, bonds or
other securities convertible into or carrying options, warrants or rights to
-11-
<PAGE> 12
purchase shares of any class without offering any such shares of any class or
such notes, debentures, bonds or other securities either in whole or in part to
the existing shareholders of any class.
ARTICLE XI
No contract or other transaction between this corporation and any person,
firm, association or corporation and no act of this corporation, shall, in the
absence of fraud, be invalidated or in any way affected by the fact that any of
the directors of this corporation are pecuniarily or otherwise interested,
directly or indirectly, in such contract, transaction or act, or are related to
or interested in such person, firm, association or corporation as a director,
stockholder, officer, employee, member or otherwise. Any director so interested
or related who is present at any meeting of the Board of Directors or committee
of directors at which action on any such contract, transaction or act is taken
may be counted in determining the presence of a quorum at such meeting and the
vote at such meeting of any such director may be counted in determining the
approval of any such contract, transaction or act. No director so interested or
related shall, because of such interest or relationship, be disqualified from
holding his office or be liable to the corporation or to any stockholder or
creditor thereof for any loss incurred by this corporation under or by reason of
such
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<PAGE> 13
contract, transaction or act, or be accountable for any gains or profits he may
have realized therein.
IN WITNESS WHEREOF, I have hereunto set my hand, this 30th day of April,
1984.
/s/ William D. Moon
-------------------------------------
William D. Moon
STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, a Notary Public, do hereby certify that on this 30th day of April,
1984, personally appeared before me William D. Moon, who being by me first duly
sworn, declared that he is the person who signed the foregoing document as
incorporator, and that the statements therein contained are true.
/s/ Amy Waters
-------------------------------------
Notary Public in and for the
State of Texas
( S E A L)
My Commission Expires:
9/29/84
- ----------------------
-13-
<PAGE> 14
DISCLAIMER
I, the undersigned being the incorporator of Roma Fort Worth, Inc., a
corporation, filed with the Secretary of State under Article III of the Texas
Business Corporations Act, do hereby disclaim any and all interests in said
corporation.
/s/ William D. Moon
-------------------------------------
William D. Moon
-14-
<PAGE> 15
CONSENT
To the Secretary of the
State of Texas:
Pursuant to the provisions of Article 2.05(a)(3) of the Texas Business
Corporation Act, the undersigned hereby consents to the use of the following
name:
ROMA FORT WORTH, INC.
Dated April 30, 1984
ROMA CORPORATION
By: /s/ Kenneth F. Reimer
---------------------------------
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<PAGE> 1
Exhibit 3.7
CERTIFICATE OF LIMITED PARTNERSHIP
OF
ROMA DINING LP
The undersigned party, having formed a limited partnership pursuant to
the laws of the State of Delaware, including the Delaware Revised Uniform
Limited Partnership Act, does hereby certify;
1. The name of the limited partnership is Roma Dining LP (the "Limited
Partnership").
2. The registered office of the Limited Partnership in the State of
Delaware shall be The Corporation Trust Company, 1209 Orange Street, Wilmington,
DE 19801. The name of its registered agent for service of process on the Limited
Partnership shall be The Corporation Trust Company and the address of such agent
is 1209 Orange Street, Wilmington, DE 19801
3. The address of the principal office of the Limited Partnership in
the United States where records are kept is 9304 Forest Lane, Suite 200, Dallas,
Texas 75243.
4. The name of the general partner of the Limited Partnership is
Romacorp, Inc., a Delaware corporation, and the mailing address and street
address of the business of such general partner is 9304 Forest Lane, Suite 200,
Dallas, Texas 75243.
SIGNED on December 31, 1996.
ROMACORP, INC.
By: /s/ David G. Short
-----------------------------------
David G. Short, Vice President
<PAGE> 1
EXHIBIT 3.8
BYLAWS
OF
ROMACORP, INC.
(f/k/a ROMACORP OPERATING COMPANY, INC.)
A DELAWARE CORPORATION
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Delaware shall be located at 1013 Centre Road,
Wilmington Delaware 19805, in the County of New Castle. The name of the
corporation's registered agent at such address shall be Corporation Service
Company. The registered office and/or registered agent of the corporation may be
changed from time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at
such other places, both within and without the State of Delaware, as the board
of directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year for the purpose of electing directors and
conducting such other proper business as may come before the meeting. The date,
time and place of the annual meeting may be determined by resolution of the
board of directors or as set by the president of the corporation.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose (including, without limitation, the filling of board
vacancies and newly created directorships), and may be held at such time and
place, within or without the State of Delaware, as shall be stated in a notice
of meeting or in a duly executed waiver of notice thereof. Such meetings may be
called at any time by two or more members of the board of directors, the
president or the holders of shares entitled to cast not less than a majority of
the votes at the meeting or the holders of fifty percent (50%) of the
outstanding shares of any series or class of the corporation's capital stock.
Section 3. Place of Meetings. The board of directors may designate
any place, either
<PAGE> 2
within or without the State of Delaware, as the place of meeting for any annual
meeting or for any special meeting called by the board of directors. If no
designation is made, or if a special meeting is otherwise called, the place of
meeting shall be the principal executive office of the corporation.
Section 4. Notice. Whenever stockholders are required or permitted
to take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose(s), of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than 10 nor more than 60 days before the date of the meeting. All such notices
shall be delivered, either personally or by mail, by or at the direction of the
board of directors, the president or the secretary, and if mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. Except as otherwise provided by applicable law or
by the corporation's certificate of incorporation, a majority of the outstanding
shares of the corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders. If less than a majority
of the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time in accordance with
Section 7 of this Article, until a quorum shall be present or represented.
Section 7. Adjourned Meetings. When a meeting is adjourned to
another time and place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting, at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
<PAGE> 3
Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the corporation's certificate of incorporation a different
vote is required, in which case such express provision shall govern and control
the decision of such question. Where a separate vote by class is required, the
affirmative vote of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class, unless the
question is one upon which by express provisions of an applicable law or of the
corporation's certificate of incorporation a different vote is required, in
which case such express provision shall govern and control the decision of such
question..
Section 9. Voting Rights. Except as otherwise provided by the
General Corporation Law of the State of Delaware or by the certificate of
incorporation of the corporation or any amendments thereto, every stockholder
shall at every meeting of the stockholders be entitled to one vote in person or
by proxy for each share of common stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person(s) to act for him, her or it by
proxy. Every proxy must be signed by the stockholder granting the proxy or by
his, her or its attorney-in-fact. No proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally.
Section 11. Action by Written Consent. Unless otherwise provided in
the corporation's certificate of incorporation, any action required to be taken
at any annual or special meeting of stockholders of the corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent(s) in writing, setting forth the action so taken and bearing the dates
of signature of the stockholders who signed the consent(s), shall be signed by
the holders of outstanding shares of stock having not less than a majority of
the shares entitled to vote, or, if greater, not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office in the state
of Delaware, or the corporation's principal place of business, or an officer or
agent of the corporation having custody of the book(s) in which proceedings of
meetings of the stockholders are recorded. Delivery made to the corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested, provided, however, that no consent(s) delivered by certified
or registered mail shall be deemed delivered until such consent(s) are actually
received at the registered office. All consents properly delivered in accordance
with this section shall be deemed to be recorded when so delivered. No written
consent shall be effective to take the
<PAGE> 4
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered to the corporation as required by this section, written
consents signed by the holders of a sufficient number of shares to take such
corporate action are so recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing. Any action taken
pursuant to such written consent(s) of the stockholders shall have the same
force and effect as if taken by the stockholders at a meeting thereof.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business and affairs of the
corporation shall be managed by or under the direction of the board of
directors.
Section 2. Number, Election and Term of Office. The number of
directors which shall constitute the first board shall be three, which number
may be increase or decreased from time to time by resolution of the board. The
directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board
of directors may be removed at any time, with or without cause, by the holders
of a majority of the shares then entitled to vote at an election of directors;
provided however, whenever the holders of any class or series are entitled to
elect one or more directors by the provisions of the corporation's certificate
of incorporation, the provisions of this section shall apply, in respect to the
removal without cause or a director or directors so elected, to the vote of the
holders of the outstanding shares of that class or series and not to the vote of
the outstanding shares as a whole; provided further, in the event any of the
stockholders of the corporation have entered into an agreement which provides
for the manner in which the directors of the corporation are to be elected, and
such stockholders have so caused the election of such directors, a director(s)
may be removed from the board of directors only in accordance with such
agreement (as the same may be amended from time to time, the "Stockholders
Agreement"), for so long as (i) such agreement has been filed with the
corporation and (ii) has not been terminated. Any director may resign at any
time upon written notice to the corporation.
Section 4. Vacancies. Except as otherwise provided by the
certificate of incorporation of the corporation or any amendments thereto,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the
<PAGE> 5
directors then in office, though less than a quorum, or by a sole remaining
director or by a majority vote of the holders of the corporation's outstanding
stock entitled to vote thereon. Each director so chosen shall hold office until
a successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than
the annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president or vice president on at least 24 hours notice to each
director, either personally, by telephone, by mail, or by telegraph; in like
manner and on like notice the president must call a special meeting on the
written request of at least a majority of the directors.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee(s) shall have such name(s) as may be determined from time to time by
resolution adopted by the board of directors. Each committee shall keep regular
minutes of its meetings and report the same to the board of directors when
required.
Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member(s) thereof present at any meeting and not disqualified
from voting, whether or not such member(s) constitute a quorum, may unanimously
appoint another member of the board of directors to act at
<PAGE> 6
the meeting in place of any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of
directors or any committee thereof may participate in and act at any meeting of
such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
section shall constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member
of the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted
by the corporation's certificate of incorporation, any action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, may be taken without a meeting if all members of the board or
committee, as the case may be, consent thereto in writing, and the writing(s)
are filed with the minutes of proceedings of the board or committee.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be elected
by the board of directors and shall consist of a chairman, if any is elected, a
president, one or more vice presidents, a secretary, a treasurer, and such other
officers and assistant officers as may be deemed necessary or desirable by the
board of directors. Any number of offices may be held by the same person, except
that no person may simultaneously hold the office of president and secretary. In
its discretion, the board of directors may choose not to fill any office for any
period as it may deem advisable.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the board of directors at its first
meeting held after each annual meeting of stockholders or as soon thereafter as
conveniently may be. The president shall appoint other officers to serve for
such terms as he or she deems desirable. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office
<PAGE> 7
until a successor is duly elected and qualified or until his or her earlier
death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed
by the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall be the chief executive
officer of the corporation. In the absence of the Chairman of the Board or if a
Chairman of the Board shall have not been elected, the president (i) shall
preside at all meetings of the stockholders and board of directors at which he
or she is present; (ii) subject to the powers of the board of directors, shall
have general charge of the business, affairs and property of the corporation,
and control over its officers, agents and employees; and (iii) shall see that
all orders and resolutions of the board of directors are carried into effect.
The president shall have such other powers and perform such other duties as may
be prescribed by the board of directors or as may be provided in these bylaws.
Section 7. Vice-Presidents. The vice-president, if any, or if there
shall be more than one, the vice-presidents in the order determined by the board
of directors shall, in the absence or disability of the president, act with all
of the powers and be subject to all the restrictions of the president. The
vice-presidents shall also perform such other duties and have such other powers
as the board of directors, the president or these bylaws may, from time to time,
prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary
shall attend all meetings of the board of directors, all meetings of the
committees thereof and all meetings of the stockholders and record all the
proceedings of the meetings in a book(s) to be kept for that purpose. Under the
president's supervision, the secretary (i) shall give, or cause to be given, all
notices required to be given by these bylaws or by law; (ii) shall have such
powers and perform such duties as the board of directors, the president or these
bylaws may, from time to time, prescribe; and (iii) shall have custody of the
corporate seal of the corporation. The secretary, or an assistant secretary,
shall have authority to affix the corporate seal to any instrument requiring it
and when so affixed, it may be attested by his or her signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his or her signature. The assistant
<PAGE> 8
secretary, or if there be more than one, the assistant secretaries in the order
determined by the board of directors, shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors,
the president, or secretary may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurers. The treasurer
(i) shall have the custody of the corporate funds and securities; (ii) shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the corporation; (iii) shall deposit all monies and other valuable effects in
the name and to the credit of the corporation as may be ordered by the board of
directors; (iv) shall cause the funds of the corporation to be disbursed when
such disbursements have been duly authorized, taking proper vouchers for such
disbursements; (v) shall render to the president and the board of directors, at
its regular meeting or when the board of directors so requires, an account of
the corporation; and (vi) shall have such powers and perform such duties as the
board of directors, the president or these bylaws may, from time to time,
prescribe. If required by the board of directors, the treasurer shall give the
corporation a bond (which shall be rendered every six years) in such sums and
with such surety or sureties as shall be satisfactory to the board of directors
for the faithful performance of the duties of the office of treasurer and for
the restoration to the corporation, in case of death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in the possession or under the control of the
treasurer belonging to the corporation. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, shall in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer. The assistant treasurers
shall perform such other duties and have such other powers as the board of
directors, the president or treasurer may, from time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a
<PAGE> 9
certificate, signed by, or in the name of the corporation by (i) the chairman of
the board, the president or a vice-president and (ii) the secretary or an
assistant secretary of the corporation, certifying the number of shares owned by
such holder in the corporation. If such a certificate is countersigned (1) by a
transfer agent or an assistant transfer agent other than the corporation or its
employee or (2) by a registrar, other than the corporation or its employee, the
signature of any such chairman of the board, president, vice-president,
secretary, or assistant secretary may be facsimiles. In case any officer(s) who
have signed, or whose facsimile signature(s) have been used on, any such
certificate(s) shall cease to be such officer(s) of the corporation whether
because of death, resignation or otherwise before such certificate(s) have been
delivered by the corporation, such certificate(s) may nevertheless be issued and
delivered as though the person or persons who signed such certificate(s) or
whose facsimile signature(s) have been used thereon had not ceased to be such
officer(s) of the corporation. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to whom
the shares represented thereby are issued, with the number of shares and date of
issue, shall be entered on the books of the corporation. Shares of stock of the
corporation shall only be transferred on the books of the corporation by the
holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the corporation of the certificate(s) for such shares
endorsed by the appropriate person(s), with such evidence of the authenticity of
such endorsement, transfer, authorization, and other matters as the corporation
may reasonably require, and accompanied by all necessary stock transfer stamps.
In that event, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate(s), and
record the transaction on its books. The board of directors may appoint a bank
or trust company organized under the laws of the United States or any state
thereof to act as its transfer agent or registrar, or both in connection with
the transfer of any class or series of securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a
new certificate(s) to be issued in place of any certificate(s) previously issued
by the corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. When authorizing such issue of a new
certificate(s), the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen, or
destroyed certificate(s), or his or her legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against the corporation on account of the loss, theft or
destruction of any such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order
that the corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board of
directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be the
<PAGE> 10
close of business on the day immediately preceding the day on which notice is
given, or if notice is waived, at the close of business on the day immediately
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In
order that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that
the corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment or any rights of the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purposes of any other lawful action,
the board of directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate(s) for a share(s) of stock with a request to
record the transfer of such share(s), the corporation may treat the registered
owner as the person entitled to receive dividends, to vote, to receive
notifications, and otherwise to exercise all the rights and powers of an owner.
The corporation shall not be bound to recognize any equitable or other claim to
or interest in such share(s) on the part of any other person, whether or not it
shall have express or other notice thereof.
<PAGE> 11
Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum(s) as the directors
from time to time, in their absolute discretion, think proper as a reserve(s) to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or any other purpose and the directors may
modify or abolish any such reserve in the manner in which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer(s), agent(s) of the corporation, and in such manner, as shall be
determined by resolution of the board of directors or a duly authorized
committee thereof.
Section 3. Contracts. The board of directors may authorize any
officer(s), or any agent(s), of the corporation to enter into any contract or to
execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee
any obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
<PAGE> 12
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting
securities in any other corporation held by the corporation shall be voted by
the president, unless the board of directors specifically confers authority to
vote with respect thereto, which authority may be general or confined to
specific instances, upon some other person or officer. Any person authorized to
vote securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of
record, in person or by attorney or other agent, shall, upon written demand
under oath stating the purpose thereof, have the right during the usual hours
for business to inspect for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean any purpose reasonably related
to such person's interest as a stockholder. In every instance where an attorney
or other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are
for convenience of reference only and shall not be given any substantive effect
in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these bylaws is or becomes inconsistent with any provision of the
corporation's certificate of incorporation, the General Corporation Law of the
State of Delaware or any other applicable law, such provision of these bylaws
shall not be given any effect to the extent of such inconsistency but shall
otherwise be given full force and effect.
ARTICLE VII
AMENDMENTS
These bylaws may be amended, altered, or repealed and new bylaws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend,
<PAGE> 13
alter, or repeal the bylaws has been conferred upon the board of directors shall
not divest the stockholders of the same powers.
<PAGE> 1
Exhibit 3.9
BYLAWS
OF
ROMA SYSTEMS, INC.
<PAGE> 2
TABLE OF CONTENTS
BYLAWS
OF
ROMA SYSTEMS, INC.
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - OFFICES...............................................................................................1
Section 1. Registered Office......................................................................1
Section 2. Other Offices..........................................................................1
ARTICLE II - MEETINGS OF THE STOCKHOLDERS.........................................................................1
Section 1. Place of Meetings......................................................................1
Section 2. Annual Meeting.........................................................................1
Section 3. Special Meeting........................................................................1
Section 4. Notice of Annual or Special Meeting....................................................1
Section 5. Business at Special Meeting............................................................2
Section 6. Quorum of Stockholders.................................................................2
Section 7. Act of Stockholders' Meeting...........................................................2
Section 8. Voting of Shares.......................................................................3
Section 9. Proxies................................................................................3
Section 10. Voting List............................................................................3
Section 11. Action by Written Consent Without a
Meeting.......................................................................3
ARTICLE III - BOARD OF DIRECTORS .................................................................................4
Section 1. Powers.................................................................................4
Section 2. Number of Directors....................................................................4
Section 3. Election and Term......................................................................4
Section 4. Vacancies..............................................................................4
Section 5. Resignation and Removal................................................................5
Section 6. Compensation of Directors..............................................................5
Section 7. Chairman of the Board..................................................................5
ARTICLE IV - MEETING OF THE BOARD.................................................................................6
Section 1. First Meeting..........................................................................6
Section 2. Regular Meeting........................................................................6
Section 3. Special Meeting........................................................................6
Section 4. Business at Regular or Special
Meeting ......................................................................6
Section 5. Quorum of Directors....................................................................6
Section 6. Act of Directors' Meeting..............................................................6
Section 7. Action by Unanimous Written Consent
Without a Meeting.............................................................6
Section 8. Interested Directors...................................................................7
ARTICLE V - COMMITTEES............................................................................................7
ARTICLE VI - NOTICES..............................................................................................8
Section 1. Methods of Giving Notice...............................................................8
Section 2. Waiver of Notice.......................................................................8
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Section 3. Attendance as Waiver...................................................................8
ARTICLE VII - DIRECTORS' ACTION WITHOUT A MEETING BY
USE OF CONFERENCE TELEPHONE .......................................................................8
ARTICLE VIII - OFFICERS...........................................................................................9
Section 1. Executive Officers.....................................................................9
Section 2. Election and Qualification.............................................................9
Section 3. Salaries...............................................................................9
Section 4. Term, Removal and Vacancies............................................................9
Section 5. Chief Executive Officer................................................................9
Section 6. President..............................................................................9
Section 7. Vice Presidents.......................................................................10
Section 8. Secretary.............................................................................10
Section 9. Assistant Secretaries.................................................................10
Section 10. Treasurer.............................................................................10
Section 11. Assistant Treasurer...................................................................11
Section 12. Officers' Bond........................................................................11
ARTICLE IX - CERTIFICATES FOR SHARES.............................................................................11
Section 1. Certificates Representing Shares......................................................11
Section 2. Restriction on Transfer of Shares.....................................................12
Section 3. Voting Agreements.....................................................................12
Section 4. Transfer of Shares....................................................................12
Section 5. Lost, Stolen or Destroyed Certificate.................................................12
Section 6. Closing of Transfer Books and Fixing
Record Date..................................................................13
Section 7. Registered Stockholders...............................................................14
ARTICLE X - GENERAL PROVISIONS...................................................................................14
Section 1. Dividends.............................................................................14
Section 2. Reserves..............................................................................14
Section 3. Negotiable Instruments................................................................14
Section 4. Fiscal Year...........................................................................14
Section 5. Seal..................................................................................14
Section 6. Books and Records.....................................................................14
ARTICLE XI - INDEMNIFICATION.....................................................................................15
ARTICLE XII - AMENDMENTS.........................................................................................15
</TABLE>
ii
<PAGE> 4
BYLAWS
OF
ROMA SYSTEMS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be located in
the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation also may have offices at such
other places both within and without the State of Delaware as the Board of
Directors may, from time to time, determine or as the business of the
corporation may require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for the
election of directors or for any other proper purpose shall be held in the City
of Dallas, State of Texas, or at such other place within or outside the State of
Delaware as the Board of Directors may, from time to time, designate, as stated
in the notice of such meeting or a duly executed waiver of notice thereof.
Section 2. Annual Meeting. An annual meeting of the stockholders shall
be held at 9:00 a.m. on the first Saturday in April in each year, or at such
other time and date as the Board of Directors may determine. At such meeting,
the stockholders entitled to vote thereat shall elect a Board of Directors, and
may transact such other business as properly may be brought before the meeting.
Section 3. Special Meeting. Special meetings of the stockholders may be
called by the Chairman of the Board of Directors, the President, the Board of
Directors or the holders of not less than ten percent (10%) of all shares
entitled to vote at the meeting.
Section 4. Notice of Annual or Special Meeting. Written or printed
notice stating the location, day and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, the Secretary, or the officer or person
calling the meeting, to each stockholder of record
1
<PAGE> 5
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the stockholder
at his address as it appears on the stock transfer books of the corporation,
with postage thereon prepaid.
Section 5. Business at Special Meeting. The business transacted at any
special meeting of the stockholders shall be limited to the purposes stated in
the notice thereof.
Section 6. Quorum of Stockholders. Unless otherwise provided in the
Certificate of Incorporation of applicable law, the holders of a majority of the
shares entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of the stockholders. If, however, a quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
present in person or represented by proxy shall have power to adjourn the
meeting from time to time, without notice other than announcement of location,
day, and hour of the adjourned meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified, unless the adjournment is for more than
thirty (30) days or a new record date is fixed for the adjourned meeting, in
which case notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at such meeting. The stockholders present at a duly
organized meeting may continue to transact business until adjournment, and the
subsequent withdrawal of any stockholder or the refusal of any stockholder to
vote shall not affect the presence of quorum at the meeting.
Section 7. Act of Stockholders' Meeting. Except with respect to the
election of directors, the vote of the holders of a majority of the shares
entitled to vote and represented in person or by proxy at a meeting at which a
quorum is present shall be the act of the stockholders' meeting, unless the vote
of a greater number is required by law or the Certificate of Incorporation.
Unless otherwise provided in the Certificate of Incorporation, directors shall
be elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of directors at a meeting of stockholders at which a quorum
is present and all elections of directors shall be by written ballot. Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter and the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.
2
<PAGE> 6
Section 8. Voting of Shares. Each outstanding share shall be entitled
to one vote on each matter submitted to a vote at a meeting of the stockholders,
except to the extent that the voting rights of the shares of any class are
limited or denied by the Certificate of Incorporation or by a resolution of the
Board of Directors designating a series of preferred stock. At each election for
directors, every stockholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected multiplied by the number of
shares owned by such stockholder or by distributing such votes on the same
principle among any number of such candidates.
Section 9. Proxies. At any meeting of the stockholders, each
stockholder having the right to vote shall be entitled to vote either in person
or by proxy executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after three (3) years from its date of
execution unless otherwise provided in the proxy. Each proxy shall be revocable
unless expressly provided therein to be irrevocable and the proxy is coupled
with an interest or otherwise made irrevocable by law.
Section 10. Voting List. The officer or agent having charge of the
stock transfer books of the corporation shall make, at least ten (10) days
before each meeting of the stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and number of shares held by each, which
list shall be maintained, for a period of ten (10) days prior to such meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held, and shall be subject to inspection by any
stockholder at any time during the usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the whole time of the meeting. The
original stock ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or transfer books of the corporation or to vote at
any such meeting of the stockholders.
Section 11. Action by Written Consent Without a Meeting. Any action
required or permitted by law, the Certificate of Incorporation, or these Bylaws
to be taken at a meeting of the stockholders may be taken without a meeting,
without prior notice, and without a vote, if a consent in writing, setting forth
the action so taken, is signed by the holders of stock having not less than the
minimum number of votes that would be necessary to take such action at a meeting
at which the holders of all shares entitled to vote on the action were present
and voting. Such written content does not have to be unanimous. Every written
3
<PAGE> 7
consent must bear the date of signature of each stockholder who signs the
consent. No written consent shall be effective to take the action that is the
subject of the consent unless, within sixty (60) days after the date of the
earliest dated consent delivered to the corporation in the manner required by
this Section 11, a consent or consents signed by the holder or holders of shares
having not less than the minimum number of votes that would be necessary to take
the action that is the subject of the consent are delivered to the corporation
by delivery to its registered office, its principal place of business, or an
officer to agent of the corporation having custody of the books in which
proceedings of meetings of stockholders are recorded. Delivery shall be by hand
or certified or registered mail, return receipt requested. Delivery to the
corporation's principal place of business shall be addressed to the President or
Chief Executive Officer of the Corporation. Prompt notice of the taking of any
action by stockholders without a meeting by less than unanimous written consent
shall be given to those stockholders who did not consent in writing to the
action.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the corporation shall be
managed by or under the direction of its Board of Directors, which may exercise
all such powers of the corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised and done by the stockholders.
Section 2. Number of Directors. The number of directors shall consist
of not less than three or more members as determined from time to time in
accordance with these Bylaws by resolution of the Board of Directors, but no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director.
Section 3. Election and Term. The directors, other than the initial
directors, shall be elected at the annual meeting of the stockholders except as
provided in Section of this Article, and each director of the corporation shall
hold office until his death, resignation or removal. Unless required by the
Certificate of Incorporation, directors need not be residents of the State of
Delaware or stockholder of the corporation.
Section 4. Vacancies. Any vacancy occurring in the Board of Directors
shall be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, or if no directors remain,
by an election at an annual or special meeting of the stockholders called for
that purpose. A director elected to fill a vacancy shall be elected for the
4
<PAGE> 8
unexpired term of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors may be filled by the
affirmative vote of a majority of the directors. A director elected to fill a
newly created directorship shall hold office until his death, resignation or
removal.
Notwithstanding the preceding provisions of this Section 4, whenever
the holders of any class or series of shares are entitled to elect one or more
directors by the provisions of the Certificate of Incorporation, any vacancies
in such directorships and any newly created directorships of such class or
series to be filled by reason of an increase in the number of such directors may
be filled by the affirmative vote of a majority of the directors elected by such
class or series then in office or by a sole remaining director so elected.
Unless otherwise provided in the Certificate of Incorporation or these
Bylaws, when one (1) or more directors shall resign from the Board of Directors
effective at a future date, a majority of the directors then in office,
including those who so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in this Section 4 in the filling of other vacancies.
Section 5. Resignation and Removal. Any director may resign at any time
upon giving written notice to the corporation. At any meeting of the
stockholders called expressly for the purpose of removing a director or
directors, any director or the entire Board of Directors may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 6. Compensation to Directors. As specifically prescribed from
time to time by resolution of the Board of Directors, the directors of the
corporation may be paid their expenses of attendance at each meeting of the
Board and may be paid a fixed sum for attendance at each meeting of the Board or
a stated salary in their capacity as directors. This provision shall not
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 7. Chairman of the Board. The Board of Directors, at its first
meeting after each annual meeting of stockholders, shall elect one of its
members Chairman of the Board. The Chairman of the Board shall preside at all
meetings of the Board of Directors and shall have such other powers and duties
as usually pertain to such position or as may be delegated by the Board of
Directors.
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<PAGE> 9
ARTICLE IV
MEETINGS OF THE BOARD
Section 1. First Meeting. The first meeting of each newly elected Board
of Directors shall be held immediately following the annual meeting of the
stockholders and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
may be held with or without notice at such time and at such place either within
or without the State of Texas as from time to time shall be prescribed by the
Board of Directors.
Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or by a majority of
the Board of Directors. Written notice of special meetings of the Board of
Directors shall be given to each director at least twenty-four (24) hours before
the time of the meeting.
Section 4. Business at Regular or Special Meeting. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
Section 5. Quorum of Directors. A majority of the Board of Directors
shall constitute a quorum for the transaction of business, unless a greater
number is required by law or the Certificate of Incorporation. If a quorum shall
not be present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 6. Acts of Directors' Meeting. The act of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors, unless the act of a greater number is required by law or
the Certificate of Incorporation.
Section 7. Action by Unanimous Written Consent Without a Meeting. Any
action required or permitted to be taken at a meeting of the Board of Directors
or any executive committee under the provisions of any applicable law, the
Certificate of Incorporation or these Bylaws may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by all members of
the Board of Directors or of the executive committee, as the case may be. Such
consent shall have the same force and effect as a unanimous vote of the Board of
Directors or of the executive committee, as the case may be.
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<PAGE> 10
Section 8. Interested Directors. No contract or transaction between the
corporation and one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the directors or officer is present at or participates
in the meeting of the Board of Directors or committee thereof that authorizes
the contract or transaction, or solely because his or their votes are counted
for such purpose, if:
(a) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or
committee in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or
(b) The material facts as to his relationship or interest and
as to the contracts or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved, or ratified by the Board of
Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transactions.
ARTICLE V
COMMITTEES
The Board of Directors, by resolution adopted by a majority of the full
Board of Directors, may designate from among its members an executive committee
and one or more other committees, each of which, to the extent provided in such
resolution or in the Certificate of Incorporation or in these Bylaws, shall have
and may exercise all the authority of the Board of Directors, subject to the
limitations imposed by applicable law. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate one or more
of its members as alternate members of any committee, who may, subject to any
limitations imposed by the Board of Directors, replace absent or disqualified
members at any meeting of that committee. Vacancies in the membership of any
such committee shall be filled by resolution adopted by the majority of the full
Board of Directors at a regular or special meeting of the
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<PAGE> 11
Board. The designation of any such committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any member
thereof, of any responsibility imposed upon it or him by law. All committees
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when required. To the extent applicable, the provisions of Article
IV of these Bylaws governing the meetings of the Board of Directors shall
likewise govern the meetings of any committee thereof. Any member of the
executive committee may be removed by the Board of Directors by the affirmative
vote of a majority of the full Board, whenever in its judgment the best
interests of the corporation will be served thereby.
ARTICLE VI
NOTICES
Section 1. Methods of Giving Notice. Whenever any notice is required to
be given to any stockholder or director under the provisions of any law, the
Certificate of Incorporation of these Bylaws, it shall be given in writing and
delivered personally or mailed to such stockholder or director at such address
as appears on the books of the corporation, and such notice shall be deemed to
be given at the time the same shall be deposited in the United States mail with
sufficient postage thereon prepaid. Notice to directors may also be given by
telegram, telex, telecopy or similar means of visual data transmission, and
notice given by any of such means shall be deemed to be delivered when
transmitted for delivery to the recipient.
Section 2. Waiver of Notice. Whenever any notice is required to be
given to any stockholder or director under the provisions of any law, the
Certificate of Incorporation or these By-laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
Section 3. Attendance as Waiver. Attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE VII
DIRECTORS' ACTION WITHOUT A MEETING
BY USE OF CONFERENCE TELEPHONE
Subject to the provisions required or permitted for notice of meetings,
unless otherwise restricted by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors or members of any committee designated by such
Board may participate in and hold a meeting of such Board or committee by
conference
8
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telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Article VII shall constitute presence in person at such
meeting.
ARTICLE VIII
OFFICERS
Section 1. Executive Officers. The officers of the corporation shall
consist of a President and a Secretary, and may also include one or more Vice
Presidents, a Treasurer, and such other officers as are provided for in this
Article VIII, each of whom shall be elected by the Board of Directors as
provided in Section 2 of this Article. Any two or more offices may be held by
the same person.
Section 2. Election and Qualification. The Board of Directors, at its
first meeting shall choose a President and a Secretary. The Board of Directors
also may elect one or more Vice Presidents, a Treasurer, and such other
officers, including assistant officers and agents as may be deemed necessary.
All officers shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors.
Section 3. Salaries. The compensation of all offices and agents of the
corporation shall be determined by the Board of Directors.
Section 4. Term, Removal and Vacancies. Each officer of the corporation
shall hold office until his successor is chosen and qualified or until his
death, resignation or removal. Any officer may resign at any time upon giving
written notice to the corporation. Any officer or agent or member of the
executive committee elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise shall be filled by the Board of
Directors.
Section 5. Chief Executive Officer. Unless the board of Directors
designates otherwise, the President shall be the Chief Executive Officer of the
corporation. The Chief Executive Officer shall preside at all meetings of the
stockholders. The Chief Executive Officer shall have such other powers and
duties as usually pertain to such office or as may be delegated by the Board of
Directors.
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Section 6. President. The President shall be ex-officio a member of all
standing committees and shall have general powers of oversight, supervision and
management of the business and affairs of the corporation, and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall have such other powers and duties as usually pertain to such
office or as may be prescribed by the Board of Directors. He shall execute
bonds, mortgages, instruments, contracts, agreements, and other documentation,
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the corporation.
Section 7. Vice Presidents. Unless otherwise determined by the Board of
Directors, the Vice Presidents, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the President in the absence or
disability of the President. The Vice Presidents may execute contracts,
agreements, and other documentation, except where the signing and execution
thereof shall be otherwise expressly delegated by the Board of Directors. They
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
Section 8. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders, and shall record all
the proceedings of the meetings of the stockholders and of the Board of
Directors in books to be kept for that purpose, and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors. He shall keep in safe custody the seal of the corporation, and,
when authorized by the Board of Directors, affix the same to any instrument
requiring it. When so affixed, such seal shall be attested by his signature or
by the signature of the Treasurer or an Assistant Secretary.
Section 9. Assistant Secretaries. Unless otherwise determined by the
Board of Directors, the Assistant Secretaries, in the order of their seniority
as such seniority may from time to time be designated by the Board of Directors,
shall perform the duties and exercise the powers of the Secretary in the absence
or disability of the Secretary. They shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
Section 10. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging
10
<PAGE> 14
to the corporation, and shall deposit all monies and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse the funds of
the corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
Section 11. Assistant Treasurer. Unless otherwise determined by the
Board of Directors, the Assistant Treasurer shall perform the duties and
exercise the powers of the Treasurer in the absence or disability of the
Treasurer. He shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 12. Officers' Bond. If required by the Board of Directors, any
officer so required shall give the corporation a bond (which shall be renewed as
the Board may require) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of any and all books,
papers, vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
ARTICLE IX
CERTIFICATES FOR SHARES
Section 1. Certificates Representing Shares. The corporation shall
deliver certificates representing all shares to which stockholders are entitled.
Such certificates shall be numbered and shall be entered in the books of the
corporation as they are issued, and shall be signed by the Chairman of the Board
of Directors, the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof. Any or all signatures on the certificate may be a facsimile. In case
any officer who has signed or whose facsimile signature has been placed upon
such certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issuance. If the corporation is authorized to
issue shares of more than one class, there shall be set forth upon the face or
back of the certificate a statement that the corporation will furnish to any
stockholder upon request and without charge, a full statement of all of the
powers, designations, preferences, limitations and relative rights of the shares
of each class authorized to be issued and the qualifications, limitations or
restrictions of such
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preferences and/or rights and, if the corporation is authorized to issue any
preferred or special class in a series, the variations in the relative rights
and preferences between the shares of each such series so far as the same have
been fixed and determined and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. Each
certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Delaware, the name of
the person to whom issued, the number and the class and the designation of the
series, if any, which such certificate represents and the par value of each
share represented by such certificate or a statement that the shares are without
par value. No certificate shall be issued for any share until the consideration
therefor has been fully paid.
Section 2. Restriction on Transfer of Shares. If any restriction on the
transfer, or registration of the transfer, of shares shall be imposed or agreed
to by the corporation, as permitted by law, the Certificate of Incorporation, or
these Bylaws, such restriction shall be noted conspicuously on each certificate
representing shares in accordance with applicable law.
Section 3. Voting Agreement. A written counterpart of any voting
agreement entered into among any number of stockholders of the corporation, or
any number of stockholders of the corporation and the corporation itself, for
the purpose of providing that shares of the corporation shall be voted in the
manner prescribed in the agreement shall be deposited with the corporation at
its registered office in Delaware and shall be subject to the inspection by any
stockholder of the corporation or any beneficiary of the agreement daily during
business hours. In addition, certificates of stock or uncertified stock shall be
issued to the person or persons, or corporation or corporations authorized to
act as trustee for purposes of vesting in such person or persons, corporation or
corporations, the right to vote such shares, to represent any stock of an
original issue so deposited with him or them, and any certificates of stock or
uncertified stock so transferred to the voting trustee or trustees shall be
surrendered and canceled and new certificates or uncertified stock shall be
issued therefor to the voting trustee or trustees. In the certificate so issued,
if any, it shall be stated that it is issued pursuant to such agreement, and
that fact shall also be stated in the stock ledger of the corporation.
Section 4. Transfer of Shares. Subject to the provisions of Section 7
of this Article IX, upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
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thereto, cancel the old certificate, and record the transaction upon its books.
Section 5. Lost, Stolen or Destroyed Certificate. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution, or in order to make a
determination of stockholders for any other proper purpose (other than
determining stockholders entitled to consent to action taken by stockholder that
is proposed to be taken without a meeting of stockholders), the Board of
Directors may fix in advance a date as the record date for any such
determination of stockholders, such date to not precede the date of adoption of
the resolution fixing the record date, and such date to be not more than sixty
(60) days and, in case of a meeting of stockholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders, or stockholders entitled to receive payment of a dividend or other
distribution, or for any other proper purpose, the day next preceding the date
on which notice of the meeting is mailed or if notice is waived, the day next
preceding the day on which the meeting is held or the date on which the
resolution of the Board of Directors declaring such dividend or relating to such
other proper purpose is adopted, as the case may be, shall be the record date
for such determination of stockholders. When a determination of stockholders
entitled to vote at any meeting of stockholders has been made as provided in
this Section 6, such determination shall apply to any adjournment thereof;
provided that the Board may fix a new record data for the adjourned meeting.
Whenever action by stockholders is proposed to be taken by consent in writing
without a meeting of stockholders, the Board of Directors may fix a record date
for the purpose of determining stockholders entitled to consent to that action,
which
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record date shall not precede, and shall not be more than ten (10) days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by law, the
record date for determining stockholders entitled to consent to action in
writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office, its principal place of
business, or an officer or agent of the corporation having custody of the books
in which proceedings of meetings of stockholders are recorded. If no record date
shall have been fixed by the Board of Directors and prior action of the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to action in writing without a meeting shall be the date on
which the Board of Directors adopts a resolution taking such prior action.
Section 7. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Delaware.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors from time to time may
declare, and the corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Certificate of Incorporation and these Bylaws.
Section 2. Reserves. The Board of Directors may, by resolution, create
a reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Negotiable Instruments. All bills, notes, checks or
instruments for the payment of money shall be signed by such officer or officers
or such other person or persons as permitted by these Bylaws or in such manner
as the Board of Directors from time to time may designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
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Section 5. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and may be used by causing it or a facsimile thereof to
be impressed or affixed or in any other manner reproduced.
Section 6. Books and Records. The corporation shall keep books and
records of account and shall keep minutes of the proceedings of the
stockholders, the Board of Directors, and each committee of the Board of
Directors. The corporation shall keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a record
of each transfer of those shares that have been presented to the corporation for
registration of transfer. Such records shall contain the names and addresses of
all past and current stockholders of the corporation held by each of them. Any
books, records, minutes, and share transfer records may be in written form or in
any other form capable of being converted into written form within a reasonable
time.
ARTICLE XI
INDEMNIFICATION
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such officer or director is not entitled to be
indemnified by the corporation as authorized in this Article.
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended or repeated or new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board, subject to the stockholders' right to adopt, amend or repeal these Bylaws
or adopt new Bylaws.
15
<PAGE> 1
Exhibit 3.10
BYLAWS
OF
ROMA HOLDINGS, INC.
<PAGE> 2
TABLE OF CONTENTS
BYLAWS
OF
ROMA HOLDINGS, INC.
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - OFFICES.......................................................... 1
Section 1. Registered Office.......................................... 1
Section 2. Other Offices.............................................. 1
ARTICLE II - MEETINGS OF THE STOCKHOLDERS.................................... 1
Section 1. Place of Meetings.......................................... 1
Section 2. Annual Meeting............................................. 1
Section 3. Special Meeting............................................ 1
Section 4. Notice of Annual or Special Meeting........................ 1
Section 5. Business at Special Meeting................................ 2
Section 6. Quorum of Stockholders..................................... 2
Section 7. Act of Stockholders' Meeting............................... 2
Section 8. Voting of Shares........................................... 3
Section 9. Proxies.................................................... 3
Section 10. Voting List................................................ 3
Section 11. Action by Written Consent Without a
Meeting.............................................. 3
ARTICLE III - BOARD OF DIRECTORS ............................................ 4
Section 1. Powers..................................................... 4
Section 2. Number of Directors........................................ 4
Section 3. Election and Term.......................................... 4
Section 4. Vacancies.................................................. 4
Section 5. Resignation and Removal.................................... 5
Section 6. Compensation of Directors.................................. 5
Section 7. Chairman of the Board...................................... 5
ARTICLE IV - MEETING OF THE BOARD............................................ 6
Section 1. First Meeting.............................................. 6
Section 2. Regular Meeting............................................ 6
Section 3. Special Meeting............................................ 6
Section 4. Business at Regular or Special
Meeting ............................................. 6
Section 5. Quorum of Directors........................................ 6
Section 6. Act of Directors' Meeting.................................. 6
Section 7. Action by Unanimous Written Consent
Without a Meeting.................................... 6
Section 8. Interested Directors....................................... 7
ARTICLE V - COMMITTEES....................................................... 7
ARTICLE VI - NOTICES......................................................... 8
Section 1. Methods of Giving Notice................................... 8
Section 2. Waiver of Notice........................................... 8
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3. Attendance as Waiver ................................... 8
ARTICLE VII DIRECTORS' ACTION WITHOUT A MEETING BY
USE OF CONFERENCE TELEPHONE ............................ 8
ARTICLE VIII - OFFICERS .................................................. 9
Section 1. Executive Officers ..................................... 9
Section 2. Election and Qualification ............................. 9
Section 3. Salaries ............................................... 9
Section 4. Term, Removal and Vacancies ............................ 9
Section 5. Chief Executive Officer ................................ 9
Section 6. President .............................................. 9
Section 7. Vice Presidents ........................................ 10
Section 8. Secretary .............................................. 10
Section 9. Assistant Secretaries .................................. 10
Section 10. Treasurer .............................................. 10
Section 11. Assistant Treasurer .................................... 11
Section 12. Officers' Bond ......................................... 11
ARTICLE IX - CERTIFICATES FOR SHARES ..................................... 11
Section 1. Certificates Representing Shares ....................... 11
Section 2. Restriction on Transfer of Shares ...................... 12
Section 3. Voting Agreements ...................................... 12
Section 4. Transfer of Shares ..................................... 12
Section 5. Lost, Stolen or Destroyed Certificate .................. 12
Section 6. Closing of Transfer Books and Fixing
Record Date ...................................... 13
Section 7. Registered Stockholders ................................ 14
ARTICLE X - GENERAL PROVISIONS ........................................... 14
Section 1. Dividends .............................................. 14
Section 2. Reserves ............................................... 14
Section 3. Negotiable Instruments ................................. 14
Section 4. Fiscal Year ............................................ 14
Section 5. Seal ................................................... 14
Section 6. Books and Records ...................................... 14
ARTICLE XI - INDEMNIFICATION ............................................. 15
ARTICLE XII - AMENDMENTS ................................................. 15
</TABLE>
ii
<PAGE> 4
BYLAWS
OF
ROMA HOLDINGS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be located in
the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation also may have offices at such
other places both within and without the State of Delaware as the Board of
Directors may, from time to time, determine or as the business of the
corporation may require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for the
election of directors or for any other proper purpose shall be held in the City
of Dallas, State of Texas, or at such other place within or outside the State of
Delaware as the Board of Directors may, from time to time, designate, as stated
in the notice of such meeting or a duly executed waiver of notice thereof.
Section 2. Annual Meeting. An annual meeting of the stockholders shall be
held at 9:00 a.m. on the first Saturday in April in each year, or at such other
time and date as the Board of Directors may determine. At such meeting, the
stockholders entitled to vote thereat shall elect a Board of Directors, and may
transact such other business as properly may be brought before the meeting.
Section 3. Special Meeting. Special meetings of the stockholders may be
called by the Chairman of the Board of Directors, the President, the Board of
Directors or the holders of not less than ten percent (10%) of all shares
entitled to vote at the meeting.
Section 4. Notice of Annual or Special Meeting. Written or printed notice
stating the location, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, the Secretary, or the officer or person
calling the meeting, to each stockholder of record
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entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the stockholder
at his address as it appears on the stock transfer books of the corporation,
with postage thereon prepaid.
Section 5. Business at Special Meeting. The business transacted at any
special meeting of the stockholders shall be limited to the purposes stated in
the notice thereof.
Section 6. Quorum of Stockholders. Unless otherwise provided in the
Certificate of Incorporation of applicable law, the holders of a majority of the
shares entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of the stockholders. If, however, a quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
present in person or represented by proxy shall have power to adjourn the
meeting from time to time, without notice other than announcement of location,
day, and hour of the adjourned meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified, unless the adjournment is for more than
thirty (30) days or a new record date is fixed for the adjourned meeting, in
which case notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at such meeting. The stockholders present at a duly
organized meeting may continue to transact business until adjournment, and the
subsequent withdrawal of any stockholder or the refusal of any stockholder to
vote shall not affect the presence of quorum at the meeting.
Section 7. Act of Stockholders' Meeting. Except with respect to the
election of directors, the vote of the holders of a majority of the shares
entitled to vote and represented in person or by proxy at a meeting at which a
quorum is present shall be the act of the stockholders' meeting, unless the vote
of a greater number is required by law or the Certificate of Incorporation.
Unless otherwise provided in the Certificate of Incorporation, directors shall
be elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of directors at a meeting of stockholders at which a quorum
is present and all elections of directors shall be by written ballot. Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter and the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.
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Section 8. Voting of Shares. Each outstanding share shall be entitled to
one vote on each matter submitted to a vote at a meeting of the stockholders,
except to the extent that the voting rights of the shares of any class are
limited or denied by the Certificate of Incorporation or by a resolution of the
Board of Directors designating a series of preferred stock. At each election for
directors, every stockholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected multiplied by the number of
shares owned by such stockholder or by distributing such votes on the same
principle among any number of such candidates.
Section 9. Proxies. At any meeting of the stockholders, each stockholder
having the right to vote shall be entitled to vote either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after three (3) years from its date of
execution unless otherwise provided in the proxy. Each proxy shall be revocable
unless expressly provided therein to be irrevocable and the proxy is coupled
with an interest or otherwise made irrevocable by law.
Section 10. Voting List. The officer or agent having charge of the stock
transfer books of the corporation shall make, at least ten (10) days before each
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting or any adjournment thereof, arranged in alphabetical order,
with the address of and number of shares held by each, which list shall be
maintained, for a period of ten (10) days prior to such meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held, and shall be subject to inspection by any
stockholder at any time during the usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the whole time of the meeting. The
original stock ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or transfer books of the corporation or to vote at
any such meeting of the stockholders.
Section 11. Action by Written Consent Without a Meeting. Any action
required or permitted by law, the Certificate of Incorporation, or these Bylaws
to be taken at a meeting of the stockholders may be taken without a meeting,
without prior notice, and without a vote, if a consent in writing, setting forth
the action so taken, is signed by the holders of stock having not less than the
minimum number of votes that would be necessary to take such action at a meeting
at which the holders of all shares entitled to vote on the action were present
and voting. Such written content does not have to be unanimous. Every written
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consent must bear the date of signature of each stockholder who signs the
consent. No written consent shall be effective to take the action that is the
subject of the consent unless, within sixty (60) days after the date of the
earliest dated consent delivered to the corporation in the manner required by
this Section 11, a consent or consents signed by the holder or holders of shares
having not less than the minimum number of votes that would be necessary to take
the action that is the subject of the consent are delivered to the corporation
by delivery to its registered office, its principal place of business, or an
officer to agent of the corporation having custody of the books in which
proceedings of meetings of stockholders are recorded. Delivery shall be by hand
or certified or registered mail, return receipt requested. Delivery to the
corporation's principal place of business shall be addressed to the President or
Chief Executive Officer of the Corporation. Prompt notice of the taking of any
action by stockholders without a meeting by less than unanimous written consent
shall be given to those stockholders who did not consent in writing to the
action.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the corporation shall be
managed by or under the direction of its Board of Directors, which may exercise
all such powers of the corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised and done by the stockholders.
Section 2. Number of Directors. The number of directors shall consist of
not less than three or more members as determined from time to time in
accordance with these Bylaws by resolution of the Board of Directors, but no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director.
Section 3. Election and Term. The directors, other than the initial
directors, shall be elected at the annual meeting of the stockholders except as
provided in Section of this Article, and each director of the corporation shall
hold office until his death, resignation or removal. Unless required by the
Certificate of Incorporation, directors need not be residents of the State of
Delaware or stockholder of the corporation.
Section 4. Vacancies. Any vacancy occurring in the Board of Directors
shall be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, or if no directors remain,
by an election at an annual or special meeting of the stockholders called for
that purpose. A director elected to fill a vacancy shall be elected for the
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unexpired term of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors may be filled by the
affirmative vote of a majority of the directors. A director elected to fill a
newly created directorship shall hold office until his death, resignation or
removal.
Notwithstanding the preceding provisions of this Section 4, whenever the
holders of any class or series of shares are entitled to elect one or more
directors by the provisions of the Certificate of Incorporation, any vacancies
in such directorships and any newly created directorships of such class or
series to be filled by reason of an increase in the number of such directors may
be filled by the affirmative vote of a majority of the directors elected by such
class or series then in office or by a sole remaining director so elected.
Unless otherwise provided in the Certificate of Incorporation or these
Bylaws, when one (1) or more directors shall resign from the Board of Directors
effective at a future date, a majority of the directors then in office,
including those who so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in this Section 4 in the filling of other vacancies.
Section 5. Resignation and Removal. Any director may resign at any time
upon giving written notice to the corporation. At any meeting of the
stockholders called expressly for the purpose of removing a director or
directors, any director or the entire Board of Directors may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 6. Compensation to Directors. As specifically prescribed from time
to time by resolution of the Board of Directors, the directors of the
corporation may be paid their expenses of attendance at each meeting of the
Board and may be paid a fixed sum for attendance at each meeting of the Board or
a stated salary in their capacity as directors. This provision shall not
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 7. Chairman of the Board. The Board of Directors, at its first
meeting after each annual meeting of stockholders, shall elect one of its
members Chairman of the Board. The Chairman of the Board shall preside at all
meetings of the Board of Directors and shall have such other powers and duties
as usually pertain to such position or as may be delegated by the Board of
Directors.
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ARTICLE IV
MEETINGS OF THE BOARD
Section 1. First Meeting. The first meeting of each newly elected Board of
Directors shall be held immediately following the annual meeting of the
stockholders and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
may be held with or without notice at such time and at such place either within
or without the State of Texas as from time to time shall be prescribed by the
Board of Directors.
Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or by a majority of
the Board of Directors. Written notice of special meetings of the Board of
Directors shall be given to each director at least twenty-four (24) hours before
the time of the meeting.
Section 4. Business at Regular or Special Meeting. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
Section 5. Quorum of Directors. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, unless a greater number is
required by law or the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 6. Acts of Directors' Meeting. The act of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors, unless the act of a greater number is required by law or
the Certificate of Incorporation.
Section 7. Action by Unanimous Written Consent Without a Meeting. Any
action required or permitted to be taken at a meeting of the Board of Directors
or any executive committee under the provisions of any applicable law, the
Certificate of Incorporation or these Bylaws may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by all members of
the Board of Directors or of the executive committee, as the case may be. Such
consent shall have the same force and effect as a unanimous vote of the Board of
Directors or of the executive committee, as the case may be.
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Section 8. Interested Directors. No contract or transaction between the
corporation and one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the directors or officer is present at or participates
in the meeting of the Board of Directors or committee thereof that authorizes
the contract or transaction, or solely because his or their votes are counted
for such purpose, if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative vote
of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
(b) The material facts as to his relationship or interest and as to
the contracts or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved, or ratified by the Board of
Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transactions.
ARTICLE V
COMMITTEES
The Board of Directors, by resolution adopted by a majority of the full
Board of Directors, may designate from among its members an executive committee
and one or more other committees, each of which, to the extent provided in such
resolution or in the Certificate of Incorporation or in these Bylaws, shall have
and may exercise all the authority of the Board of Directors, subject to the
limitations imposed by applicable law. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate one or more
of its members as alternate members of any committee, who may, subject to any
limitations imposed by the Board of Directors, replace absent or disqualified
members at any meeting of that committee. Vacancies in the membership of any
such committee shall be filled by resolution adopted by the majority of the full
Board of Directors at a regular or special meeting of the
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Board. The designation of any such committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any member
thereof, of any responsibility imposed upon it or him by law. All committees
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when required. To the extent applicable, the provisions of Article
IV of these Bylaws governing the meetings of the Board of Directors shall
likewise govern the meetings of any committee thereof. Any member of the
executive committee may be removed by the Board of Directors by the affirmative
vote of a majority of the full Board, whenever in its judgment the best
interests of the corporation will be served thereby.
ARTICLE VI
NOTICES
Section 1. Methods of Giving Notice. Whenever any notice is required to be
given to any stockholder or director under the provisions of any law, the
Certificate of Incorporation of these Bylaws, it shall be given in writing and
delivered personally or mailed to such stockholder or director at such address
as appears on the books of the corporation, and such notice shall be deemed to
be given at the time the same shall be deposited in the United States mail with
sufficient postage thereon prepaid. Notice to directors may also be given by
telegram, telex, telecopy or similar means of visual data transmission, and
notice given by any of such means shall be deemed to be delivered when
transmitted for delivery to the recipient.
Section 2. Waiver of Notice. Whenever any notice is required to be given
to any stockholder or director under the provisions of any law, the Certificate
of Incorporation or these By-laws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
Section 3. Attendance as Waiver. Attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE VII
DIRECTORS' ACTION WITHOUT A MEETING
BY USE OF CONFERENCE TELEPHONE
Subject to the provisions required or permitted for notice of meetings,
unless otherwise restricted by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors or members of any committee designated by such
Board may participate in and hold a meeting of such Board or committee by
conference
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telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Article VII shall constitute presence in person at such
meeting.
ARTICLE VIII
OFFICERS
Section 1. Executive Officers. The officers of the corporation shall
consist of a President and a Secretary, and may also include one or more Vice
Presidents, a Treasurer, and such other officers as are provided for in this
Article VIII, each of whom shall be elected by the Board of Directors as
provided in Section 2 of this Article. Any two or more offices may be held by
the same person.
Section 2. Election and Qualification. The Board of Directors, at its
first meeting shall choose a President and a Secretary. The Board of Directors
also may elect one or more Vice Presidents, a Treasurer, and such other
officers, including assistant officers and agents as may be deemed necessary.
All officers shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors.
Section 3. Salaries. The compensation of all offices and agents of the
corporation shall be determined by the Board of Directors.
Section 4. Term, Removal and Vacancies. Each officer of the corporation
shall hold office until his successor is chosen and qualified or until his
death, resignation or removal. Any officer may resign at any time upon giving
written notice to the corporation. Any officer or agent or member of the
executive committee elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise shall be filled by the Board of
Directors.
Section 5. Chief Executive Officer. Unless the board of Directors
designates otherwise, the President shall be the Chief Executive Officer of the
corporation. The Chief Executive Officer shall preside at all meetings of the
stockholders. The Chief Executive Officer shall have such other powers and
duties as usually pertain to such office or as may be delegated by the Board of
Directors.
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Section 6. President. The President shall be ex-officio a member of all
standing committees and shall have general powers of oversight, supervision and
management of the business and affairs of the corporation, and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall have such other powers and duties as usually pertain to such
office or as may be prescribed by the Board of Directors. He shall execute
bonds, mortgages, instruments, contracts, agreements, and other documentation,
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the corporation.
Section 7. Vice Presidents. Unless otherwise determined by the Board of
Directors, the Vice Presidents, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the President in the absence or
disability of the President. The Vice Presidents may execute contracts,
agreements, and other documentation, except where the signing and execution
thereof shall be otherwise expressly delegated by the Board of Directors. They
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
Section 8. Secretary. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders, and shall record all the
proceedings of the meetings of the stockholders and of the Board of Directors in
books to be kept for that purpose, and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors. He shall keep in safe custody the seal of the corporation, and,
when authorized by the Board of Directors, affix the same to any instrument
requiring it. When so affixed, such seal shall be attested by his signature or
by the signature of the Treasurer or an Assistant Secretary.
Section 9. Assistant Secretaries. Unless otherwise determined by the Board
of Directors, the Assistant Secretaries, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the Secretary in the absence or
disability of the Secretary. They shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
Section 10. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging
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to the corporation, and shall deposit all monies and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse the funds of
the corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
Section 11. Assistant Treasurer. Unless otherwise determined by the Board
of Directors, the Assistant Treasurer shall perform the duties and exercise the
powers of the Treasurer in the absence or disability of the Treasurer. He shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 12. Officers' Bond. If required by the Board of Directors, any
officer so required shall give the corporation a bond (which shall be renewed as
the Board may require) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of any and all books,
papers, vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
ARTICLE IX
CERTIFICATES FOR SHARES
Section 1. Certificates Representing Shares. The corporation shall deliver
certificates representing all shares to which stockholders are entitled. Such
certificates shall be numbered and shall be entered in the books of the
corporation as they are issued, and shall be signed by the Chairman of the Board
of Directors, the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof. Any or all signatures on the certificate may be a facsimile. In case
any officer who has signed or whose facsimile signature has been placed upon
such certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issuance. If the corporation is authorized to
issue shares of more than one class, there shall be set forth upon the face or
back of the certificate a statement that the corporation will furnish to any
stockholder upon request and without charge, a full statement of all of the
powers, designations, preferences, limitations and relative rights of the shares
of each class authorized to be issued and the qualifications, limitations or
restrictions of such
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preferences and/or rights and, if the corporation is authorized to issue any
preferred or special class in a series, the variations in the relative rights
and preferences between the shares of each such series so far as the same have
been fixed and determined and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. Each
certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Delaware, the name of
the person to whom issued, the number and the class and the designation of the
series, if any, which such certificate represents and the par value of each
share represented by such certificate or a statement that the shares are without
par value. No certificate shall be issued for any share until the consideration
therefor has been fully paid.
Section 2. Restriction on Transfer of Shares. If any restriction on the
transfer, or registration of the transfer, of shares shall be imposed or agreed
to by the corporation, as permitted by law, the Certificate of Incorporation, or
these Bylaws, such restriction shall be noted conspicuously on each certificate
representing shares in accordance with applicable law.
Section 3. Voting Agreement. A written counterpart of any voting agreement
entered into among any number of stockholders of the corporation, or any number
of stockholders of the corporation and the corporation itself, for the purpose
of providing that shares of the corporation shall be voted in the manner
prescribed in the agreement shall be deposited with the corporation at its
registered office in Delaware and shall be subject to the inspection by any
stockholder of the corporation or any beneficiary of the agreement daily during
business hours. In addition, certificates of stock or uncertified stock shall be
issued to the person or persons, or corporation or corporations authorized to
act as trustee for purposes of vesting in such person or persons, corporation or
corporations, the right to vote such shares, to represent any stock of an
original issue so deposited with him or them, and any certificates of stock or
uncertified stock so transferred to the voting trustee or trustees shall be
surrendered and canceled and new certificates or uncertified stock shall be
issued therefor to the voting trustee or trustees. In the certificate so issued,
if any, it shall be stated that it is issued pursuant to such agreement, and
that fact shall also be stated in the stock ledger of the corporation.
Section 4. Transfer of Shares. Subject to the provisions of Section 7 of
this Article IX, upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
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thereto, cancel the old certificate, and record the transaction upon its books.
Section 5. Lost, Stolen or Destroyed Certificate. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution, or in order to make a
determination of stockholders for any other proper purpose (other than
determining stockholders entitled to consent to action taken by stockholder that
is proposed to be taken without a meeting of stockholders), the Board of
Directors may fix in advance a date as the record date for any such
determination of stockholders, such date to not precede the date of adoption of
the resolution fixing the record date, and such date to be not more than sixty
(60) days and, in case of a meeting of stockholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders, or stockholders entitled to receive payment of a dividend or other
distribution, or for any other proper purpose, the day next preceding the date
on which notice of the meeting is mailed or if notice is waived, the day next
preceding the day on which the meeting is held or the date on which the
resolution of the Board of Directors declaring such dividend or relating to such
other proper purpose is adopted, as the case may be, shall be the record date
for such determination of stockholders. When a determination of stockholders
entitled to vote at any meeting of stockholders has been made as provided in
this Section 6, such determination shall apply to any adjournment thereof;
provided that the Board may fix a new record data for the adjourned meeting.
Whenever action by stockholders is proposed to be taken by consent in writing
without a meeting of stockholders, the Board of Directors may fix a record date
for the purpose of determining stockholders entitled to consent to that action,
which
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record date shall not precede, and shall not be more than ten (10) days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by law, the
record date for determining stockholders entitled to consent to action in
writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office, its principal place of
business, or an officer or agent of the corporation having custody of the books
in which proceedings of meetings of stockholders are recorded. If no record date
shall have been fixed by the Board of Directors and prior action of the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to action in writing without a meeting shall be the date on
which the Board of Directors adopts a resolution taking such prior action.
Section 7. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors from time to time may
declare, and the corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Certificate of Incorporation and these Bylaws.
Section 2. Reserves. The Board of Directors may, by resolution, create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Negotiable Instruments. All bills, notes, checks or instruments
for the payment of money shall be signed by such officer or officers or such
other person or persons as permitted by these Bylaws or in such manner as the
Board of Directors from time to time may designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
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<PAGE> 18
Section 5. Seal. The corporate seal shall have inscribed thereon the name
of the corporation and may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
Section 6. Books and Records. The corporation shall keep books and records
of account and shall keep minutes of the proceedings of the stockholders, the
Board of Directors, and each committee of the Board of Directors. The
corporation shall keep at its registered office or principal place of business,
or at the office of its transfer agent or registrar, a record of each transfer
of those shares that have been presented to the corporation for registration of
transfer. Such records shall contain the names and addresses of all past and
current stockholders of the corporation held by each of them. Any books,
records, minutes, and share transfer records may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
ARTICLE XI
INDEMNIFICATION
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that such officer or director is not entitled to be indemnified by
the corporation as authorized in this Article.
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended or repeated or new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board, subject to the stockholders' right to adopt, amend or repeal these Bylaws
or adopt new Bylaws.
15
<PAGE> 1
Exhibit 3.11
BYLAWS
OF
ROMA HUNTINGTON BEACH, INC.
<PAGE> 2
TABLE OF CONTENTS
BYLAWS
OF
ROMA HUNTINGTON BEACH, INC.
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - OFFICES ...................................................... 1
Section 1. Registered Office ...................................... 1
Section 2. Other Offices .......................................... 1
ARTICLE II - MEETINGS OF THE STOCKHOLDERS ................................ 1
Section 1. Place of Meetings ...................................... 1
Section 2. Annual Meeting ......................................... 1
Section 3. Special Meeting ........................................ 1
Section 4. Notice of Annual or Special Meeting .................... 1
Section 5. Business at Special Meeting ............................ 2
Section 6. Quorum of Stockholders ................................. 2
Section 7. Act of Stockholders' Meeting ........................... 2
Section 8. Voting of Shares ....................................... 3
Section 9. Proxies ................................................ 3
Section 10. Voting List ............................................ 3
Section 11. Action by Written Consent Without a
Meeting .......................................... 3
ARTICLE III - BOARD OF DIRECTORS ......................................... 4
Section 1. Powers ................................................. 4
Section 2. Number of Directors .................................... 4
Section 3. Election and Term ...................................... 4
Section 4. Vacancies .............................................. 4
Section 5. Resignation and Removal ................................ 5
Section 6. Compensation of Directors .............................. 5
Section 7. Chairman of the Board .................................. 5
ARTICLE IV - MEETING OF THE BOARD ........................................ 6
Section 1. First Meeting .......................................... 6
Section 2. Regular Meeting ........................................ 6
Section 3. Special Meeting ........................................ 6
Section 4. Business at Regular or Special
Meeting .......................................... 6
Section 5. Quorum of Directors .................................... 6
Section 6. Act of Directors' Meeting .............................. 6
Section 7. Action by Unanimous Written Consent
Without a Meeting ................................ 6
Section 8. Interested Directors ................................... 7
ARTICLE V - COMMITTEES ................................................... 7
ARTICLE VI - NOTICES ..................................................... 8
Section 1. Methods of Giving Notice ............................... 8
Section 2. Waiver of Notice ....................................... 8
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
Section 3. Attendance as Waiver .................................. 8
ARTICLE VII - DIRECTORS' ACTION WITHOUT A MEETING BY
USE OF CONFERENCE TELEPHONE ........................... 8
ARTICLE VIII - OFFICERS ................................................. 9
Section 1. Executive Officers .................................... 9
Section 2. Election and Qualification ............................ 9
Section 3. Salaries .............................................. 9
Section 4. Term, Removal and Vacancies ........................... 9
Section 5. Chief Executive Officer ............................... 9
Section 6. President ............................................. 9
Section 7. Vice Presidents ....................................... 10
Section 8. Secretary ............................................. 10
Section 9. Assistant Secretaries ................................. 10
Section 10. Treasurer ............................................. 10
Section 11. Assistant Treasurer ................................... 11
Section 12. Officers' Bond ........................................ 11
ARTICLE IX - CERTIFICATES FOR SHARES .................................... 11
Section 1. Certificates Representing Shares ...................... 11
Section 2. Restriction on Transfer of Shares ..................... 12
Section 3. Voting Agreements ..................................... 12
Section 4. Transfer of Shares .................................... 12
Section 5. Lost, Stolen or Destroyed Certificate ................. 12
Section 6. Closing of Transfer Books and Fixing
Record Date ..................................... 13
Section 7. Registered Stockholders ............................... 14
ARTICLE X - GENERAL PROVISIONS .......................................... 14
Section 1. Dividends ............................................. 14
Section 2. Reserves .............................................. 14
Section 3. Negotiable Instruments ................................ 14
Section 4. Fiscal Year ........................................... 14
Section 5. Seal .................................................. 14
Section 6. Books and Records ..................................... 14
ARTICLE XI - INDEMNIFICATION ............................................ 15
ARTICLE XII - AMENDMENTS ................................................ 15
</TABLE>
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<PAGE> 4
BYLAWS
OF
ROMA HUNTINGTON BEACH, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be located in
the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation also may have offices at such
other places both within and without the State of Delaware as the Board of
Directors may, from time to time, determine or as the business of the
corporation may require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for the
election of directors or for any other proper purpose shall be held in the City
of Dallas, State of Texas, or at such other place within or outside the State of
Delaware as the Board of Directors may, from time to time, designate, as stated
in the notice of such meeting or a duly executed waiver of notice thereof.
Section 2. Annual Meeting. An annual meeting of the stockholders shall be
held at 9:00 a.m. on the first Saturday in April in each year, or at such other
time and date as the Board of Directors may determine. At such meeting, the
stockholders entitled to vote thereat shall elect a Board of Directors, and may
transact such other business as properly may be brought before the meeting.
Section 3. Special Meeting. Special meetings of the stockholders may be
called by the Chairman of the Board of Directors, the President, the Board of
Directors or the holders of not less than ten percent (10%) of all shares
entitled to vote at the meeting.
Section 4. Notice of Annual or Special Meeting. Written or printed notice
stating the location, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, the Secretary, or the officer or person
calling the meeting, to each stockholder of record
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entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the stockholder
at his address as it appears on the stock transfer books of the corporation,
with postage thereon prepaid.
Section 5. Business at Special Meeting. The business transacted at any
special meeting of the stockholders shall be limited to the purposes stated in
the notice thereof.
Section 6. Quorum of Stockholders. Unless otherwise provided in the
Certificate of Incorporation of applicable law, the holders of a majority of the
shares entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of the stockholders. If, however, a quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
present in person or represented by proxy shall have power to adjourn the
meeting from time to time, without notice other than announcement of location,
day, and hour of the adjourned meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified, unless the adjournment is for more than
thirty (30) days or a new record date is fixed for the adjourned meeting, in
which case notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at such meeting. The stockholders present at a duly
organized meeting may continue to transact business until adjournment, and the
subsequent withdrawal of any stockholder or the refusal of any stockholder to
vote shall not affect the presence of quorum at the meeting.
Section 7. Act of Stockholders' Meeting. Except with respect to the
election of directors, the vote of the holders of a majority of the shares
entitled to vote and represented in person or by proxy at a meeting at which a
quorum is present shall be the act of the stockholders' meeting, unless the vote
of a greater number is required by law or the Certificate of Incorporation.
Unless otherwise provided in the Certificate of Incorporation, directors shall
be elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of directors at a meeting of stockholders at which a quorum
is present and all elections of directors shall be by written ballot. Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter and the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.
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Section 8. Voting of Shares. Each outstanding share shall be entitled to
one vote on each matter submitted to a vote at a meeting of the stockholders,
except to the extent that the voting rights of the shares of any class are
limited or denied by the Certificate of Incorporation or by a resolution of the
Board of Directors designating a series of preferred stock. At each election for
directors, every stockholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected multiplied by the number of
shares owned by such stockholder or by distributing such votes on the same
principle among any number of such candidates.
Section 9. Proxies. At any meeting of the stockholders, each stockholder
having the right to vote shall be entitled to vote either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after three (3) years from its date of
execution unless otherwise provided in the proxy. Each proxy shall be revocable
unless expressly provided therein to be irrevocable and the proxy is coupled
with an interest or otherwise made irrevocable by law.
Section 10. Voting List. The officer or agent having charge of the stock
transfer books of the corporation shall make, at least ten (10) days before each
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting or any adjournment thereof, arranged in alphabetical order,
with the address of and number of shares held by each, which list shall be
maintained, for a period of ten (10) days prior to such meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held, and shall be subject to inspection by any
stockholder at any time during the usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the whole time of the meeting. The
original stock ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or transfer books of the corporation or to vote at
any such meeting of the stockholders.
Section 11. Action by Written Consent Without a Meeting. Any action
required or permitted by law, the Certificate of Incorporation, or these Bylaws
to be taken at a meeting of the stockholders may be taken without a meeting,
without prior notice, and without a vote, if a consent in writing, setting forth
the action so taken, is signed by the holders of stock having not less than the
minimum number of votes that would be necessary to take such action at a meeting
at which the holders of all shares entitled to vote on the action were present
and voting. Such written content does not have to be unanimous. Every written
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<PAGE> 7
consent must bear the date of signature of each stockholder who signs the
consent. No written consent shall be effective to take the action that is the
subject of the consent unless, within sixty (60) days after the date of the
earliest dated consent delivered to the corporation in the manner required by
this Section 11, a consent or consents signed by the holder or holders of shares
having not less than the minimum number of votes that would be necessary to take
the action that is the subject of the consent are delivered to the corporation
by delivery to its registered office, its principal place of business, or an
officer to agent of the corporation having custody of the books in which
proceedings of meetings of stockholders are recorded. Delivery shall be by hand
or certified or registered mail, return receipt requested. Delivery to the
corporation's principal place of business shall be addressed to the President or
Chief Executive Officer of the Corporation. Prompt notice of the taking of any
action by stockholders without a meeting by less than unanimous written consent
shall be given to those stockholders who did not consent in writing to the
action.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the corporation shall be
managed by or under the direction of its Board of Directors, which may exercise
all such powers of the corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised and done by the stockholders.
Section 2. Number of Directors. The number of directors shall consist of
not less than three or more members as determined from time to time in
accordance with these Bylaws by resolution of the Board of Directors, but no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director.
Section 3. Election and Term. The directors, other than the initial
directors, shall be elected at the annual meeting of the stockholders except as
provided in Section of this Article, and each director of the corporation shall
hold office until his death, resignation or removal. Unless required by the
Certificate of Incorporation, directors need not be residents of the State of
Delaware or stockholder of the corporation.
Section 4. Vacancies. Any vacancy occurring in the Board of Directors
shall be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, or if no directors remain,
by an election at an annual or special meeting of the stockholders called for
that purpose. A director elected to fill a vacancy shall be elected for the
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unexpired term of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors may be filled by the
affirmative vote of a majority of the directors. A director elected to fill a
newly created directorship shall hold office until his death, resignation or
removal.
Notwithstanding the preceding provisions of this Section 4, whenever the
holders of any class or series of shares are entitled to elect one or more
directors by the provisions of the Certificate of Incorporation, any vacancies
in such directorships and any newly created directorships of such class or
series to be filled by reason of an increase in the number of such directors may
be filled by the affirmative vote of a majority of the directors elected by such
class or series then in office or by a sole remaining director so elected.
Unless otherwise provided in the Certificate of Incorporation or these
Bylaws, when one (1) or more directors shall resign from the Board of Directors
effective at a future date, a majority of the directors then in office,
including those who so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in this Section 4 in the filling of other vacancies.
Section 5. Resignation and Removal. Any director may resign at any time
upon giving written notice to the corporation. At any meeting of the
stockholders called expressly for the purpose of removing a director or
directors, any director or the entire Board of Directors may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 6. Compensation to Directors. As specifically prescribed from time
to time by resolution of the Board of Directors, the directors of the
corporation may be paid their expenses of attendance at each meeting of the
Board and may be paid a fixed sum for attendance at each meeting of the Board or
a stated salary in their capacity as directors. This provision shall not
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 7. Chairman of the Board. The Board of Directors, at its first
meeting after each annual meeting of stockholders, shall elect one of its
members Chairman of the Board. The Chairman of the Board shall preside at all
meetings of the Board of Directors and shall have such other powers and duties
as usually pertain to such position or as may be delegated by the Board of
Directors.
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<PAGE> 9
ARTICLE IV
MEETINGS OF THE BOARD
Section 1. First Meeting. The first meeting of each newly elected Board of
Directors shall be held immediately following the annual meeting of the
stockholders and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
may be held with or without notice at such time and at such place either within
or without the State of Texas as from time to time shall be prescribed by the
Board of Directors.
Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or by a majority of
the Board of Directors. Written notice of special meetings of the Board of
Directors shall be given to each director at least twenty-four (24) hours before
the time of the meeting.
Section 4. Business at Regular or Special Meeting. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
Section 5. Quorum of Directors. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, unless a greater number is
required by law or the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 6. Acts of Directors' Meeting. The act of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors, unless the act of a greater number is required by law or
the Certificate of Incorporation.
Section 7. Action by Unanimous Written Consent Without a Meeting. Any
action required or permitted to be taken at a meeting of the Board of Directors
or any executive committee under the provisions of any applicable law, the
Certificate of Incorporation or these Bylaws may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by all members of
the Board of Directors or of the executive committee, as the case may be. Such
consent shall have the same force and effect as a unanimous vote of the Board of
Directors or of the executive committee, as the case may be.
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Section 8. Interested Directors. No contract or transaction between the
corporation and one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the directors or officer is present at or participates
in the meeting of the Board of Directors or committee thereof that authorizes
the contract or transaction, or solely because his or their votes are counted
for such purpose, if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative vote
of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
(b) The material facts as to his relationship or interest and as to
the contracts or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved, or ratified by the Board of
Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transactions.
ARTICLE V
COMMITTEES
The Board of Directors, by resolution adopted by a majority of the full
Board of Directors, may designate from among its members an executive committee
and one or more other committees, each of which, to the extent provided in such
resolution or in the Certificate of Incorporation or in these Bylaws, shall have
and may exercise all the authority of the Board of Directors, subject to the
limitations imposed by applicable law. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate one or more
of its members as alternate members of any committee, who may, subject to any
limitations imposed by the Board of Directors, replace absent or disqualified
members at any meeting of that committee. Vacancies in the membership of any
such committee shall be filled by resolution adopted by the majority of the full
Board of Directors at a regular or special meeting of the
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Board. The designation of any such committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any member
thereof, of any responsibility imposed upon it or him by law. All committees
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when required. To the extent applicable, the provisions of Article
IV of these Bylaws governing the meetings of the Board of Directors shall
likewise govern the meetings of any committee thereof. Any member of the
executive committee may be removed by the Board of Directors by the affirmative
vote of a majority of the full Board, whenever in its judgment the best
interests of the corporation will be served thereby.
ARTICLE VI
NOTICES
Section 1. Methods of Giving Notice. Whenever any notice is required to be
given to any stockholder or director under the provisions of any law, the
Certificate of Incorporation of these Bylaws, it shall be given in writing and
delivered personally or mailed to such stockholder or director at such address
as appears on the books of the corporation, and such notice shall be deemed to
be given at the time the same shall be deposited in the United States mail with
sufficient postage thereon prepaid. Notice to directors may also be given by
telegram, telex, telecopy or similar means of visual data transmission, and
notice given by any of such means shall be deemed to be delivered when
transmitted for delivery to the recipient.
Section 2. Waiver of Notice. Whenever any notice is required to be given
to any stockholder or director under the provisions of any law, the Certificate
of Incorporation or these By-laws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
Section 3. Attendance as Waiver. Attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE VII
DIRECTORS' ACTION WITHOUT A MEETING
BY USE OF CONFERENCE TELEPHONE
Subject to the provisions required or permitted for notice of meetings,
unless otherwise restricted by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors or members of any committee designated by such
Board may participate in and hold a meeting of such Board or committee by
conference
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telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Article VII shall constitute presence in person at such
meeting.
ARTICLE VIII
OFFICERS
Section 1. Executive Officers. The officers of the corporation shall
consist of a President and a Secretary, and may also include one or more Vice
Presidents, a Treasurer, and such other officers as are provided for in this
Article VIII, each of whom shall be elected by the Board of Directors as
provided in Section 2 of this Article. Any two or more offices may be held by
the same person.
Section 2. Election and Qualification. The Board of Directors, at its
first meeting shall choose a President and a Secretary. The Board of Directors
also may elect one or more Vice Presidents, a Treasurer, and such other
officers, including assistant officers and agents as may be deemed necessary.
All officers shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors.
Section 3. Salaries. The compensation of all offices and agents of the
corporation shall be determined by the Board of Directors.
Section 4. Term, Removal and Vacancies. Each officer of the corporation
shall hold office until his successor is chosen and qualified or until his
death, resignation or removal. Any officer may resign at any time upon giving
written notice to the corporation. Any officer or agent or member of the
executive committee elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise shall be filled by the Board of
Directors.
Section 5. Chief Executive Officer. Unless the board of Directors
designates otherwise, the President shall be the Chief Executive Officer of the
corporation. The Chief Executive Officer shall preside at all meetings of the
stockholders. The Chief Executive Officer shall have such other powers and
duties as usually pertain to such office or as may be delegated by the Board of
Directors.
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Section 6. President. The President shall be ex-officio a member of all
standing committees and shall have general powers of oversight, supervision and
management of the business and affairs of the corporation, and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall have such other powers and duties as usually pertain to such
office or as may be prescribed by the Board of Directors. He shall execute
bonds, mortgages, instruments, contracts, agreements, and other documentation,
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the corporation.
Section 7. Vice Presidents. Unless otherwise determined by the Board of
Directors, the Vice Presidents, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the President in the absence or
disability of the President. The Vice Presidents may execute contracts,
agreements, and other documentation, except where the signing and execution
thereof shall be otherwise expressly delegated by the Board of Directors. They
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
Section 8. Secretary. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders, and shall record all the
proceedings of the meetings of the stockholders and of the Board of Directors in
books to be kept for that purpose, and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors. He shall keep in safe custody the seal of the corporation, and,
when authorized by the Board of Directors, affix the same to any instrument
requiring it. When so affixed, such seal shall be attested by his signature or
by the signature of the Treasurer or an Assistant Secretary.
Section 9. Assistant Secretaries. Unless otherwise determined by the Board
of Directors, the Assistant Secretaries, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the Secretary in the absence or
disability of the Secretary. They shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
Section 10. Treasurer. The Treasurer shall have the custody
of the corporate funds and securities, and shall keep full and
accurate accounts of receipts and disbursements in books belonging
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to the corporation, and shall deposit all monies and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse the funds of
the corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
Section 11. Assistant Treasurer. Unless otherwise determined by the Board
of Directors, the Assistant Treasurer shall perform the duties and exercise the
powers of the Treasurer in the absence or disability of the Treasurer. He shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 12. Officers' Bond. If required by the Board of Directors, any
officer so required shall give the corporation a bond (which shall be renewed as
the Board may require) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of any and all books,
papers, vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
ARTICLE IX
CERTIFICATES FOR SHARES
Section 1. Certificates Representing Shares. The corporation shall deliver
certificates representing all shares to which stockholders are entitled. Such
certificates shall be numbered and shall be entered in the books of the
corporation as they are issued, and shall be signed by the Chairman of the Board
of Directors, the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof. Any or all signatures on the certificate may be a facsimile. In case
any officer who has signed or whose facsimile signature has been placed upon
such certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issuance. If the corporation is authorized to
issue shares of more than one class, there shall be set forth upon the face or
back of the certificate a statement that the corporation will furnish to any
stockholder upon request and without charge, a full statement of all of the
powers, designations, preferences, limitations and relative rights of the shares
of each class authorized to be issued and the qualifications, limitations or
restrictions of such
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preferences and/or rights and, if the corporation is authorized to issue any
preferred or special class in a series, the variations in the relative rights
and preferences between the shares of each such series so far as the same have
been fixed and determined and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. Each
certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Delaware, the name of
the person to whom issued, the number and the class and the designation of the
series, if any, which such certificate represents and the par value of each
share represented by such certificate or a statement that the shares are without
par value. No certificate shall be issued for any share until the consideration
therefor has been fully paid.
Section 2. Restriction on Transfer of Shares. If any restriction on the
transfer, or registration of the transfer, of shares shall be imposed or agreed
to by the corporation, as permitted by law, the Certificate of Incorporation, or
these Bylaws, such restriction shall be noted conspicuously on each certificate
representing shares in accordance with applicable law.
Section 3. Voting Agreement. A written counterpart of any voting agreement
entered into among any number of stockholders of the corporation, or any number
of stockholders of the corporation and the corporation itself, for the purpose
of providing that shares of the corporation shall be voted in the manner
prescribed in the agreement shall be deposited with the corporation at its
registered office in Delaware and shall be subject to the inspection by any
stockholder of the corporation or any beneficiary of the agreement daily during
business hours. In addition, certificates of stock or uncertified stock shall be
issued to the person or persons, or corporation or corporations authorized to
act as trustee for purposes of vesting in such person or persons, corporation or
corporations, the right to vote such shares, to represent any stock of an
original issue so deposited with him or them, and any certificates of stock or
uncertified stock so transferred to the voting trustee or trustees shall be
surrendered and cancelled and new certificates or uncertified stock shall be
issued therefor to the voting trustee or trustees. In the certificate so issued,
if any, it shall be stated that it is issued pursuant to such agreement, and
that fact shall also be stated in the stock ledger of the corporation.
Section 4. Transfer of Shares. Subject to the provisions of Section 7 of
this Article IX, upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
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thereto, cancel the old certificate, and record the transaction upon its books.
Section 5. Lost, Stolen or Destroyed Certificate. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution, or in order to make a
determination of stockholders for any other proper purpose (other than
determining stockholders entitled to consent to action taken by stockholder that
is proposed to be taken without a meeting of stockholders), the Board of
Directors may fix in advance a date as the record date for any such
determination of stockholders, such date to not precede the date of adoption of
the resolution fixing the record date, and such date to be not more than sixty
(60) days and, in case of a meeting of stockholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders, or stockholders entitled to receive payment of a dividend or other
distribution, or for any other proper purpose, the day next preceding the date
on which notice of the meeting is mailed or if notice is waived, the day next
preceding the day on which the meeting is held or the date on which the
resolution of the Board of Directors declaring such dividend or relating to such
other proper purpose is adopted, as the case may be, shall be the record date
for such determination of stockholders. When a determination of stockholders
entitled to vote at any meeting of stockholders has been made as provided in
this Section 6, such determination shall apply to any adjournment thereof;
provided that the Board may fix a new record data for the adjourned meeting.
Whenever action by stockholders is proposed to be taken by consent in writing
without a meeting of stockholders, the Board of Directors may fix a record date
for the purpose of determining stockholders entitled to consent to that action,
which
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record date shall not precede, and shall not be more than ten (10) days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by law, the
record date for determining stockholders entitled to consent to action in
writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office, its principal place of
business, or an officer or agent of the corporation having custody of the books
in which proceedings of meetings of stockholders are recorded. If no record date
shall have been fixed by the Board of Directors and prior action of the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to action in writing without a meeting shall be the date on
which the Board of Directors adopts a resolution taking such prior action.
Section 7. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors from time to time may
declare, and the corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Certificate of Incorporation and these Bylaws.
Section 2. Reserves. The Board of Directors may, by resolution, create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Negotiable Instruments. All bills, notes, checks or instruments
for the payment of money shall be signed by such officer or officers or such
other person or persons as permitted by these Bylaws or in such manner as the
Board of Directors from time to time may designate.
Section 4. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
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Section 5. Seal. The corporate seal shall have inscribed thereon the name
of the corporation and may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
Section 6. Books and Records. The corporation shall keep books and records
of account and shall keep minutes of the proceedings of the stockholders, the
Board of Directors, and each committee of the Board of Directors. The
corporation shall keep at its registered office or principal place of business,
or at the office of its transfer agent or registrar, a record of each transfer
of those shares that have been presented to the corporation for registration of
transfer. Such records shall contain the names and addresses of all past and
current stockholders of the corporation held by each of them. Any books,
records, minutes, and share transfer records may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
ARTICLE XI
INDEMNIFICATION
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, the corporation shall
indemnify any and all of its directors and officers, or former directors and
officers, or any person who may have served at the corporation's request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise.
Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that such officer or director is not entitled to be indemnified by
the corporation as authorized in this Article.
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended or repeated or new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board, subject to the stockholders' right to adopt, amend or repeal these Bylaws
or adopt new Bylaws.
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CERTIFICATE OF SECRETARY
The undersigned does hereby certify that (i) he is the duly elected and
qualified Secretary of Roma Huntington Beach, Inc., a Delaware corporation (the
"Corporation"), and (ii) the foregoing is a true and correct copy of the Bylaws
of the Corporation reviewed and adopted by the Board of Directors of the
Corporation by unanimous written consent dated March 1, 1993.
/s/ David G. Short
----------------------------------------
David G. Short, Secretary
March 1, 1993
----------------------------------------
Date
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Exhibit 3.12
ROMA BAR MANAGEMENT CORPORATION
A Texas Corporation
AMENDED AND RESTATED BYLAWS
ARTICLE I
OFFICES
Section 1. The principal offices of the corporation shall be located
in the City of Dallas, County of Dallas, State of Texas.
Section 2. The corporation may also have offices at such other
places, within and without the State of Texas, as the board of directors may
from time to time determine or as the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. All annual meetings of shareholders shall be held at the
offices of the corporation in the City of Dallas, State of Texas, or at such
other place, within or without the State of Texas, as may be designated by the
board of directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Texas, and at such time as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of shareholders, commencing with the year
1985 shall be held on the second Wednesday in April
<PAGE> 2
if not a legal holiday, and if a legal holiday, then on the next secular day
following at 10:00 A.M., at which they shall elect by a plurality vote a board
of directors, and transact such other business as may be properly brought before
the meeting.
Section 3. Special meetings of the shareholders may be called by the
president, the board of directors or the holders of not less than one-tenth
(1/10th) of all shares of any class of stock of the corporation entitled to vote
at the meeting.
Section 4. Written or printed notice signed by the president, a vice
president, the secretary, or an assistant secretary and stating the place, day
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be either delivered personally to, or shall be mailed postage
prepaid, not less than ten (10) nor more than fifty (50) days before the day of
the meeting, by or at the direction of the president, the secretary, or the
officer or person calling the meeting, to each shareholder of record entitled to
vote at such meeting.
Section 5. Business transacted at any special meeting shall be
confined to the purposes stated in the notice thereof.
Section 6. The holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at meetings of
shareholders except as otherwise provided in the articles of incorporation. If,
however, a quorum shall not be present or represented at any
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meeting of the shareholders, the shareholders present in person or represented
by proxy shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified and called. The shareholders present at a
duly organized meeting may continue to transact business until adjournment
notwithstanding the withdrawal of some shareholders prior to adjournment, but in
no event shall a quorum consist of less than one-third (1/3) of the holders of
the shares entitled to vote and thus represented at such meeting.
Section 7. The vote of the holders of a majority of the shares
entitled to vote and represented at a meeting at which a quorum is present shall
be the act of the shareholders' meeting, unless the vote of a greater number is
required by the articles of incorporation.
Section 8. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of any
class or series within a class are limited or denied by the articles of
incorporation or the Texas Business Corporation Act. At any election for
directors every shareholder entitled to vote at any such election
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shall have the right to vote, in person or by proxy, the number of shares owned
by him for as many persons as there are directors to be elected and for whose
election he has a right to vote, and stockholders of the corporation are
expressly prohibited from cumulating their votes in any election for directors
of the corporation.
Section 9. A shareholder may vote in person or may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all of the
powers conferred by such written instrument upon all of the persons so
designated unless the instrument shall otherwise provide. No such proxy shall be
valid after the expiration of eleven (11) months from the date of its execution,
unless the person executing it specifies therein the length of time for which it
is to continue in force, which in no case shall exceed seven (7) years from the
date of its execution. Subject to the above, any proxy duly executed is not
revoked and continues in full force and effect until an instrument revoking it
or a duly executed proxy bearing a later date is filed with the secretary of the
corporation. Each proxy shall be revocable unless expressly provided therein to
be irrevocable.
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Section 10. The officer or agent having charge of the stock transfer
books shall make, at least ten (10) days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the address of and
number of shares held by each, which list, for a period of ten (10) days prior
to such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at any time
during the usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer book or to vote at any such meeting of
shareholders.
Section 11. Any action required by the statutes to be taken at a
meeting of the shareholders, or any action which may be taken at a meeting of
the shareholders, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof, and such consent
shall have the same force and effect as a unanimous vote of shareholders.
Section 12. Shareholders may participate in and hold a meeting by
means of conference telephone or similar communication
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equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting shall constitute presence in person
at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
the meeting is not lawfully called or convened.
ARTICLE III
DIRECTORS
Section 1. The business and affairs of the corporation shall be
managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the articles of incorporation or by these bylaws directed or required to be
exercised and done by the shareholders.
Section 2. The board shall have not less than two (2) nor more than
nine (9) directors or trustees, all of whom shall be of full age and at least
one of whom shall be a citizen of the United States, except that, if all the
shares of the corporation are owned beneficially and of record by either one or
two shareholders, the number of directors may be less than two but not less than
the number of shareholders. It is not necessary for directors to be residents of
the State of Texas or shareholders of the corporation. The number of directors
constituting the board shall be such number as shall be from time to time
specified by resolution of the board of directors;
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provided, however, no director's term shall be shortened by reason of a
resolution reducing the number of directors; and further provided that the
number of directors constituting the initial board of directors shall be two
(2), and shall remain at such number unless and until changed by resolution of
the board of directors.
Section 3. The directors shall be elected at the annual meeting of
the shareholders by a plurality of the votes cast at such election. But if for
any reason such directors shall not be elected at the annual meeting of the
shareholders, they may be elected at any special meeting of the shareholders
which is called and held for that purpose. Each director elected shall hold
office until his successor is elected and qualified.
Section 4. Any vacancy occurring in the board of directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the board of directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by a majority vote of the directors then in office, and
if not filled in that manner shall be filled by election at an annual meeting or
at a special meeting of the shareholders entitled to vote called for that
purpose.
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Section 5. Any directors of the corporation may be removed or
discharged, with or without cause, at a Special Meeting of the Shareholders
called for that purpose.
MEETINGS OF THE BOARD OF DIRECTORS
Section 6. Meetings of the board of directors, regular or special,
may be held either within or without the State of Texas.
Section 7. The first meeting of each newly elected board of
directors shall be at such time and place as shall be fixed by the vote of the
shareholders at the annual meeting of shareholders and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided a quorum shall be present. In the event of the failure of
the shareholders to fix the time and place of such first meeting of the newly
elected board of directors, or in the event such meeting is not held at the time
and place so fixed by the shareholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 8. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 9. Special meetings of the board of directors may be called
by the president and shall be called by the
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secretary on the written request of two of the directors. Written notice of
special meetings of the board of directors shall be given to each director at
least three (3) days before the day of the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
Section 10. A majority of the directors shall constitute a quorum
for the transaction of business and the act of at least a majority of the
directors present at a meeting at which a quorum is present shall be required to
constitute the act of the board of directors, unless a greater number is
required or a lesser number is permitted by the articles of incorporation. If a
quorum shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
At such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted at the meeting as originally
notified and called.
Section 11. Any director may resign at any time by mailing or
delivering or by transmitting by telegram or cable written notice of his
resignation to the board of directors, the president, or to the secretary of the
corporation; and any such resignation shall take effect at the time specified
therein or,
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if no time is specified therein, then such resignation shall take effect
immediately upon the receipt thereof.
Section 12. Any action required or permitted to be taken at any
meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the board or of such committee, as the case may be,
and such consent shall have the same force and effect as a unanimous vote at a
meeting.
COMMITTEES OF DIRECTORS
Section 13. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more directors to constitute an
executive committee which, to the extent provided in such resolution, shall have
and may exercise the powers of the board of directors in the management of the
business and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to all papers which may require it. Vacancies
in the membership of the executive committee shall be filled by the board of
directors at a regular or special meeting of the board. The executive committee
shall keep regular minutes of its proceedings and report the same to the board
of directors when required. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the board of directors or
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any member thereof of any responsibility imposed on it or him by law.
Section 14. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees in addition to the
executive committee, each such other committee to consist of one or more
directors of the corporation, which committee or committees, to the extent
provided in such resolution or resolutions and not theretofore granted to the
executive committee, shall have and may exercise all of the authority of the
board of directors in the business and affairs of the corporation, and may have
power to authorize the seal of the corporation to be affixed to all papers which
may require it. Vacancies in the membership of any such committees shall be
filled by the board of directors at a regular or special meeting of the board of
directors. Each committee shall keep regular minutes of its proceedings and
report the same to the board when required. The designation of such committees
and the delegation thereto of authority shall not operate to relieve the board
of directors, or any member thereof, or any responsibility imposed upon it or
him by law.
ARTICLE IV
NOTICES
Section 1. Notices to directors and shareholders shall be in writing
and delivered personally or mailed to the directors or shareholders at their
addresses appearing on the books of the
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corporation. Notice by mail shall be deemed to be given at the time when same
shall be mailed. Notice to directors may also be given by telegram, and shall be
deemed delivered when same shall be deposited at a telegraph office for
transmission and all appropriate fees therefore have been paid.
Section 2. Whenever any notice is required to be given to any
shareholder or director under the provisions of the statutes or of the articles
of incorporation or of these bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Section 3. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is now lawfully called or convened.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall consist of a chief
executive officer, a president, one or more vice presidents, a secretary and a
treasurer, each of whom shall be elected by the board of directors. Any two or
more offices may be held by the same person.
Section 2. The board of directors at its first meeting after each
annual meeting of shareholders shall choose a chief
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executive officer, a president, one or more vice presidents, a secretary and a
treasurer, none of whom need be a member of the board.
Section 3. Such other officers and assistant officers and agents as
may be deemed necessary may be elected or appointed by the board of directors.
Section 4. The salaries of the chief executive officer and president
of the corporation shall be fixed by the board of directors. The salaries of all
other officers and agents shall be set by the chief executive officer and
president, but shall be subject to ultimate review by the board of directors if
the board of directors so desires.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer or agent or member of any
committee elected or appointed by the board of directors may be removed by the
board of directors whenever in its judgment the best interests of the
corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any vacancy occurring
in any office of the corporation by death, resignation, removal or otherwise
shall be filled by the board of directors.
CHIEF EXECUTIVE OFFICER
Section 6. The chief executive officer shall report to the board of
directors, shall be the chief executive officer of
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the corporation, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect. In the absence of the chairman of the board
or in the event the board of directors shall not have designated a chairman of
the board, the chief executive officer shall preside at meetings of the
shareholders and the board of directors.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where a signing
and execution thereof shall be expressly delegated or authorized by the board of
directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 8. The president of the corporation shall report to the
board of directors and to the chief executive officer and shall assist the chief
executive officer in the discharge of his duties as directed by the chief
executive officer and shall, in the absence or disability of the chief executive
officer, perform the duties and exercise the powers of the chief executive
officer. The president, like the chief executive officer, shall be empowered to
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and
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execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation. He shall perform such other duties
and have such other powers as the board of directors shall prescribe.
THE VICE PRESIDENTS
Section 9. The vice presidents in the order of their seniority,
unless otherwise determined by the board of directors, shall, in the absence or
disability of the chief executive officer and the president, perform the duties
and exercise the powers of the chief executive officer and the president. They
shall perform such other duties and have such other powers as the board of
directors shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors, the
chief executive officer, or the president, under whose supervision he shall be.
He shall keep in safe custody the seal of the corporation and, when authorized
by the board of directors, affix the same to any
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instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of the treasurer or an assistant secretary.
Section 11. The assistant secretaries in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the secretary, perform the duties and exercise the
powers of the secretary. They shall perform such ether duties and have such
other powers as the board of directors or the secretary may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the chief executive officer, the president
and the board of directors at its regular meetings or when the board of
directors so requires an account of all his transactions as treasurer and of the
financial condition of the corporation.
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Section 14. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 15. The assistant treasurers in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. They shall perform such other duties and have such
other powers as the board of directors or the treasurer may from time to time
prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The corporation shall deliver certificates representing
all shares to which shareholders are entitled; and such certificates shall be
signed by the president or a vice president, and the secretary or an assistant
secretary of the corporation, and may be sealed with the seal of the corporation
or a facsimile thereof. No certificate shall be issued for any share until the
consideration therefor has been fully paid. Each
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certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Texas, the name of the
person to whom issued, the number and class and the designation of the series,
if any, which said certificate represents, and the par value of each share
represented by such certificate or a statement that the shares are without par
value.
Section 2. If the corporation is authorized to issue shares of more
than one class, each certificate representing shares issued by the corporation
(1) shall conspicuously set forth on the face or back of the certificate a full
statement of (a) all of the designations, preferences, limitations, and relative
rights of the shares of each class authorized to be issued and, (b) if the
corporation is authorized to issue shares of any preferred or special class in
series, the variations in the relative rights and preferences of the shares of
each such series to the extent they have been fixed and determined and the
authority of the board of directors to fix and determine the relative rights and
preferences of subsequent series; or (2) shall conspicuously state on the face
or back of the certificate that (a) such a statement is set forth in the
articles of incorporation on file in the office of the Secretary of State and
(b) the corporation will furnish a copy of such statement to the record holder
of the certificate without charge
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or written request to the corporation at its principal place of business or
registered office.
Section 3. If the corporation has by its articles of incorporation
limited or denied the preemptive right of shareholders to acquire unissued or
treasury shares of the corporation, every certificate representing shares issued
by the corporation (1) shall conspicuously set forth upon the face or back of
the certificate a full statement of the limitation or denial of preemptive
rights contained in the articles of incorporation, or (2) shall conspicuously
state on the face or back of the certificate (a) that there is on file in the
office of the Secretary of State a full statement of the limitation or denial of
preemptive rights contained in the articles of incorporation, and (b) that the
corporation will furnish a copy of such statement to any shareholder without
charge upon written request to the corporation at its principal place of
business or registered office.
Section 4. The signatures of the president or vice president and the
secretary or assistant secretary upon a certificate may be facsimiles, if the
certificate is countersigned by a transfer agent and registered by a registrar,
other than the corporation itself or an employee of the corporation. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued,
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it may be issued by the corporation with the same effect as if he were such
office at the date of the issuance.
LOST CERTIFICATES
Section 5. The board of directors may direct a new certificate or
certificates to be issued or empower the corporation's transfer agent to issue a
new certificate or certificates in place of any certificate or certificates
theretofore issued by the corporation which are alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
Section 6. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
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thereto, cancel the old certificate and record the transaction upon its books.
RESTRICTION ON TRANSFER OF SHARES
Section 7. If the corporation issues any shares which are not
registered under the Securities Act of 1933, as amended, and registered or
qualified under any applicable state securities laws, the transfer of any such
shares shall be restricted in accordance with the following legend:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
registered or qualified under the securities laws of any state, and the
holder hereof cannot make any sale, assignment or other transfer of any
shares of such stock except pursuant to an offering of such shares duly
registered under the Act and registered or qualified under any applicable
state securities laws, or under such other circumstances as in the opinion
of counsel for or satisfactory to the issuer shall not, at the time,
require registration under the Act and/or registration or qualification
under any state securities law. Also said shares are "restricted
securities" within the meaning of Rule 144 promulgated by the Securities
and Exchange Commission under the Act and may be subject to the
limitations and reporting requirements of said rule upon resale or other
disposition thereof."
Any restriction on the transfer of any security of the corporation
shall be conspicuously noted on the security.
CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE
Section 8. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purposes, the board of
directors may provide
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that the stock transfer books shall be closed for a stated period not to exceed,
in any case, fifty (50) days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in such case to be not more than fifty
(50) days, and, in case of a meeting of shareholders, not less than ten days,
prior to the date on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which the notice of the meeting is mailed or
the date on which the resolutions of the board of directors declaring such
dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of stock transfer books and the
stated period of closing has expired.
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REGISTERED SHAREHOLDERS
Section 9. The corporation shall be entitled to recognize the
exclusive rights of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of Texas.
ARTICLE VII
GENERAL PROVISIONS
Section 1. The board of directors may declare and the corporation
may pay dividends on its outstanding shares in cash, property, or its own shares
pursuant to law and subject to the provisions of its articles of incorporation.
Section 2. The board of directors may by resolution create a reserve
or reserves out of earned surplus for any proper purpose or purposes, and may
abolish any such reserve in the same manner.
REPORT TO SHAREHOLDERS
Section 3. The board of directors must, when requested by the
holders of at least one-third (1/3) of the outstanding shares of the
corporation, present written reports of the situation and amount of business of
the corporation.
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CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by the
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the corporation, and the words "Corporate Seal, Texas." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted at any meeting of the board of directors at which a quorum
is present, by the affirmative vote of a majority of the directors present at
such meeting (provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting), subject to repeal or change at any
meeting of the shareholders at which a quorum is present, by the affirmative
vote of a majority of the shareholders present at such meeting (provided notice
of the
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proposed alteration, amendment or repeal is contained in the notice of the
meeting).
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Exhibit 3.13
ROMA FORT WORTH, INC.
A Texas Corporation
BYLAWS
ARTICLE I
OFFICES
Section 1. The principal offices of the corporation shall be located
in the City of Dallas, County of Dallas, State of Texas.
Section 2. The corporation may also have offices at such other
places, within and without the State of Texas, as the board of directors may
from time to time determine or as the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. All annual meetings of shareholders shall be held at the
offices of the corporation in the City of Dallas, State of Texas, or at such
other place, within or without the State of Texas, as may be designated by the
board of directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Texas, and at such time as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of shareholders, commencing with the year
1985 shall be held on the second Wednesday in April
<PAGE> 2
if not a legal holiday, and if a legal holiday, then on the next secular day
following at 10:00 A.M., at which they shall elect by a plurality vote a board
of directors, and transact such other business as may be properly brought before
the meeting.
Section 3. Special meetings of the shareholders may be called by the
president, the board of directors or the holder or holders of not less than
one-tenth (1/10th) of all shares of any class of stock of the corporation
entitled to vote at the meeting.
Section 4. Written or printed notice signed by the president, a vice
president, the secretary, or an assistant secretary and stating the place, day
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be either delivered personally to, or shall be mailed postage
prepaid, not less than ten (10) nor more than fifty (50) days before the day of
the meeting, by or at the direction of the president, the secretary, or the
officer or person calling the meeting, to each shareholder of record entitled to
vote at such meeting.
Section 5. Business transacted at any special meeting shall be
confined to the purposes stated in the notice thereof.
Section 6. The holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at meetings of
shareholders except as otherwise provided in the articles of incorporation. If,
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however, a quorum shall not be present or represented at any meeting of the
shareholders, the shareholders present in person or represented by proxy shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified and called. The shareholders present at a duly organized
meeting may continue to transact business until adjournment notwithstanding the
withdrawal of some shareholders prior to adjournment, but in no event shall a
quorum consist of less than one-third (1/3) of the holders of the shares
entitled to vote and thus represented at such meeting.
Section 7. The vote of the holders of a majority of the shares
entitled to vote and represented at a meeting at which a quorum is present shall
be the act of the shareholders' meeting, unless the vote of a greater number is
required by the articles of incorporation.
Section 8. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of any
class or series within a class are limited or denied by the articles of
incorporation or the Texas Business Corporation Act. At any election for
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directors every shareholder entitled to vote at any such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose election he has
a right to vote, and stockholders of the corporation are expressly prohibited
from cumulating their votes in any election for directors of the corporation.
Section 9. A shareholder may vote in person or may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all of the
powers conferred by such written instrument upon all of the persons so
designated unless the instrument shall otherwise provide. No such proxy shall be
valid after the expiration of eleven (11) months from the date of its execution,
unless the person executing it specifies therein the length of time for which it
is to continue in force, which in no case shall exceed seven (7) years from the
date of its execution. Subject to the above, any proxy duly executed is not
revoked and continues in full force and effect until an instrument revoking it
or a duly executed proxy bearing a later date is filed with the secretary of the
corporation. Each proxy shall be revocable unless expressly provided therein to
be irrevocable.
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Section 10. The officer or agent having charge of the stock transfer
books shall make, at least ten (10) days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the address of and
number of shares held by each, which list, for a period of ten (10) days prior
to such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at any time
during the usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer book or to vote at any such meeting of
shareholders.
Section 11. Any action required by the statutes to be taken at a
meeting of the shareholders, or any action which may be taken at a meeting of
the shareholders, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof, and such consent
shall have the same force and effect as a unanimous vote of shareholders.
Section 12. Shareholders may participate in and hold a meeting by
means of conference telephone or similar communication
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equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting shall constitute presence in person
at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
the meeting is not lawfully called or convened.
ARTICLE III
DIRECTORS
Section 1. The business and affairs of the corporation shall be
managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the articles of incorporation or by these bylaws directed or required to be
exercised and done by the shareholders.
Section 2. The board shall have not less than two (2) nor more than
nine (9) directors or trustees, all of whom shall be of full age and at least
one of whom shall be a citizen of the United States, except that, if all the
shares of the corporation are owned beneficially and of record by either one or
two shareholders, the number of directors may be less than two but not less than
the number of shareholders. It is not necessary for directors to be residents of
the State of Texas or shareholders of the corporation. The number of directors
constituting the board shall be such number as shall be from time to time
specified by resolution of the board of directors;
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provided, however, no director's term shall be shortened by reason of a
resolution reducing the number of directors; and further provided that the
number of directors constituting the initial board of directors shall be two
(2), and shall remain at such number unless and until changed by resolution of
the board of directors.
Section 3. The directors shall be elected at the annual meeting of
the shareholders by a plurality of the votes cast at such election. But if for
any reason such directors shall not be elected at the annual meeting of the
shareholders, they may be elected at any special meeting of the shareholders
which is called and held for that purpose. Each director elected shall hold
office until his successor is elected and qualified.
Section 4. Any vacancy occurring in the board of directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the board of directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by a majority vote of the directors then in office, and
if not filled in that manner shall be filled by election at an annual meeting or
at a special meeting of the shareholders entitled to vote called for that
purpose.
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Section 5. Any directors of the corporation may be removed or
discharged, with or without cause, at a Special Meeting of the Shareholders
called for that purpose.
MEETINGS OF THE BOARD OF DIRECTORS
Section 6. Meetings of the board of directors, regular or special,
may be held either within or without the State of Texas.
Section 7. The first meeting of each newly elected board of
directors shall be at such time and place as shall be fixed by the vote of the
shareholders at the annual meeting of shareholders and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided a quorum shall be present. In the event of the failure of
the shareholders to fix the time and place of such first meeting of the newly
elected board of directors, or in the event such meeting is not held at the time
and place so fixed by the shareholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 8. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 9. Special meetings of the board of directors may be called
by the president and shall be called by the
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secretary on the written request of two of the directors. Written notice of
special meetings of the board of directors shall be given to each director at
least three (3) days before the day of the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
Section 10. A majority of the directors shall constitute a quorum
for the transaction of business and the act of at least a majority of the
directors present at a meeting at which a quorum is present shall be required to
constitute the act of the board of directors, unless a greater number is
required or a lesser number is permitted by the articles of incorporation. If a
quorum shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
At such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted at the meeting as originally
notified and called.
Section 11. Any director may resign at any time by mailing or
delivering or by transmitting by telegram or cable written notice of his
resignation to the board of directors, the president, or to the secretary of the
corporation; and any such resignation shall take effect at the time specified
therein or,
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if no time is specified therein, then such resignation shall take effect
immediately upon the receipt thereof.
Section 12. Any action required or permitted to be taken at any
meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the board or of such committee, as the case may be,
and such consent shall have the same force and effect as a unanimous vote at a
meeting.
COMMITTEES OF DIRECTORS
Section 13. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more directors to constitute an
executive committee which, to the extent provided in such resolution, shall have
and may exercise the powers of the board of directors in the management of the
business and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to all papers which may require it. Vacancies
in the membership of the executive committee shall be filled by the board of
directors at a regular or special meeting of the board. The executive committee
shall keep regular minutes of its proceedings and report the same to the board
of directors when required. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the board of directors or
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any member thereof of any responsibility imposed on it or him by law.
Section 14. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees in addition to the
executive committee, each such other committee to consist of one or more
directors of the corporation, which committee or committees, to the extent
provided in such resolution or resolutions and not theretofore granted to the
executive committee, shall have and may exercise all of the authority of the
board of directors in the business and affairs of the corporation, and may have
power to authorize the seal of the corporation to be affixed to all papers which
may require it. Vacancies in the membership of any such committees shall be
filled by the board of directors at a regular or special meeting of the board of
directors. Each committee shall keep regular minutes of its proceedings and
report the same to the board when required. The designation of such committees
and the delegation thereto of authority shall not operate to relieve the board
of directors, or any member thereof, or any responsibility imposed upon it or
him by law.
ARTICLE IV
NOTICES
Section 1. Notices to directors and shareholders shall be in writing
and delivered personally or mailed to the directors or shareholders at their
addresses appearing on the books of the
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corporation. Notice by mail shall be deemed to be given at the time when same
shall be mailed. Notice to directors may also be given by telegram, and shall be
deemed delivered when same shall be deposited at a telegraph office for
transmission and all appropriate fees therefore have been paid.
Section 2. Whenever any notice is required to be given to any
shareholder or director under the provisions of the statutes or of the articles
of incorporation or of these bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Section 3. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is now lawfully called or convened.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall consist of a chief
executive officer, a president, one or more vice presidents, a secretary and a
treasurer, each of whom shall be elected by the board of directors. Any two or
more offices may be held by the same person.
Section 2. The board of directors at its first meeting after each
annual meeting of shareholders shall choose a chief
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executive officer, a president, one or more vice presidents, a secretary and a
treasurer, none of whom need be a member of the board.
Section 3. Such other officers and assistant officers and agents as
may be deemed necessary may be elected or appointed by the board of directors.
Section 4. The salaries of the chief executive officer and president
of the corporation shall be fixed by the board of directors. The salaries of all
other officers and agents shall be set by the chief executive officer and
president, but shall be subject to ultimate review by the board of directors if
the board of directors so desires.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer or agent or member of any
committee elected or appointed by the board of directors may be removed by the
board of directors whenever in its judgment the best interests of the
corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any vacancy occurring
in any office of the corporation by death, resignation, removal or otherwise
shall be filled by the board of directors.
CHIEF EXECUTIVE OFFICER
Section 6. The chief executive officer shall report to the board of
directors, shall be the chief executive officer of
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the corporation, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect. In the absence of the chairman of the board
or in the event the board of directors shall not have designated a chairman of
the board, the chief executive officer shall preside at meetings of the
shareholders-and the board of directors.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where a signing
and execution thereof shall be expressly delegated or authorized by the board of
directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 8. The president of the corporation shall report to the
board of directors and to the chief executive officer and shall assist the chief
executive officer in the discharge of his duties as directed by the chief
executive officer and shall, in the absence or disability of the chief executive
officer, perform the duties and exercise the powers of the chief executive
officer. The president, like the chief executive officer, shall be empowered to
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and
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execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation. He shall perform such other duties
and have such other powers as the board of directors shall prescribe.
THE VICE PRESIDENTS
Section 9. The vice presidents in the order of their seniority,
unless otherwise determined by the board of directors, shall, in the absence or
disability of the chief executive officer and the president, perform the duties
and exercise the powers of the chief executive officer and the president. They
shall perform such other duties and have such other powers as the board of
directors shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors, the
chief executive officer, or the president, under whose supervision he shall be.
He shall keep in safe custody the seal of the corporation and, when authorized
by the board of directors, affix the same to any
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<PAGE> 16
instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of the treasurer or an assistant secretary.
Section 11. The assistant secretaries in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the secretary, perform the duties and exercise the
powers of the secretary. They shall perform such other duties and have such
other powers as the board of directors or the secretary may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the chief executive officer, the president
and the board of directors at its regular meetings or when the board of
directors so requires an account of all his transactions as treasurer and of the
financial condition of the corporation.
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<PAGE> 17
Section 14. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 15. The assistant treasurers in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer. They shall perform such other duties and have such
other powers as the board of directors or the treasurer may from time to time
prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The corporation shall deliver certificates representing
all shares to which shareholders are entitled; and such certificates shall be
signed by the president or a vice president, and the secretary or an assistant
secretary of the corporation, and may be sealed with the seal of the corporation
or a facsimile thereof. No certificate shall be issued for any share until the
consideration therefor has been fully paid. Each
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<PAGE> 18
certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Texas, the name of the
person to whom issued, the number and class and the designation of the series,
if any, which said certificate represents, and the par value of each share
represented by such certificate or a statement that the shares are without par
value.
Section 2. If the corporation is authorized to issue shares of more
than one class, each certificate representing shares issued by the corporation
(1) shall conspicuously set forth on the face or back of the certificate a full
statement of (a) all of the designations, preferences, limitations, and relative
rights of the shares of each class authorized to be issued and, (b) if the
corporation is authorized to issue shares of any preferred or special class in
series, the variations in the relative rights and preferences of the shares of
each such series to the extent they have been fixed and determined and the
authority of the board of directors to fix and determine the relative rights and
preferences of subsequent series; or (2) shall conspicuously state on the face
or back of the certificate that (a) such a statement is set forth in
the articles of incorporation on file in the office of the Secretary of State
and (b) the corporation will furnish a copy of such statement to the record
holder of the certificate without charge
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<PAGE> 19
or written request to the corporation at its principal place of business or
registered office.
Section 3. If the corporation has by its articles of incorporation
limited or denied the preemptive right of shareholders to acquire unissued or
treasury shares of the corporation, every certificate representing shares issued
by the corporation (1) shall conspicuously set forth upon the face or back of
the certificate a full statement of the limitation or denial of preemptive
rights contained in the articles of incorporation, or (2) shall conspicuously
state on the face or back of the certificate (a) that there is on file in the
office of the Secretary of State a full statement of the limitation or denial of
preemptive rights contained in the articles of incorporation, and (b) that the
corporation will furnish a copy of such statement to any shareholder without
charge upon written request to the corporation at its principal place of
business or registered office.
Section 4. The signatures of the president or vice president and the
secretary or assistant secretary upon a certificate may be facsimiles, if the
certificate is countersigned by a transfer agent and registered by a registrar,
other than the corporation itself or an employee of the corporation. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued,
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<PAGE> 20
it may be issued by the corporation with the same effect as if he were such
office at the date of the issuance.
LOST CERTIFICATES
Section 5. The board of directors may direct a new certificate or
certificates to be issued or empower the corporation's transfer agent to issue a
new certificate or certificates in place of any certificate or certificates
theretofore issued by the corporation which are alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
Section 6. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
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<PAGE> 21
thereto, cancel the old certificate and record the transaction upon its books.
RESTRICTION ON TRANSFER OF SHARES
Section 7. If the corporation issues any shares which are not
registered under the Securities Act of 1933, as amended, and registered or
qualified under any applicable state securities laws, the transfer of any such
shares shall be restricted in accordance with the following legend:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
registered or qualified under the securities laws of any state, and the
holder hereof cannot make any sale, assignment or other transfer of any
shares of such stock except pursuant to an offering of such shares duly
registered under the Act and registered or qualified under any applicable
state securities laws, or under such other circumstances as in the opinion
of counsel for or satisfactory to the issuer shall not, at the time,
require registration under the Act and/or registration or qualification
under any state securities law. Also said shares are "restricted
securities" within the meaning of Rule 144 promulgated by the Securities
and Exchange Commission under the Act and may be subject to the
limitations and reporting requirements of said rule upon resale or other
disposition thereof."
Any restriction on the transfer of any security of the corporation
shall be conspicuously noted on the security.
CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE
Section 8. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purposes, the board of
directors may provide
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<PAGE> 22
that the stock transfer books shall be closed for a stated period not to exceed,
in any case, fifty (50) days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in such case to be not more than fifty
(50) days, and, in case of a meeting of shareholders, not less than ten days,
prior to the date on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which the notice of the meeting is mailed or
the date on which the resolutions of the board of directors declaring such
dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of stock transfer books and the
stated period of closing has expired.
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<PAGE> 23
REGISTERED SHAREHOLDERS
Section 9. The corporation shall be entitled to recognize the
exclusive rights of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of Texas.
ARTICLE VII
GENERAL PROVISIONS
Section 1. The board of directors may declare and the corporation
may pay dividends on its outstanding shares in cash, property, or its own shares
pursuant to law and subject to the provisions of its articles of incorporation.
Section 2. The board of directors may by resolution create a reserve
or reserves out of earned surplus for any proper purpose or purposes, and may
abolish any such reserve in the same manner.
REPORT TO SHAREHOLDERS
Section 3. The board of directors must, when requested by the
holders of at least one-third (1/3) of the outstanding shares of the
corporation, present written reports of the situation and amount of business of
the corporation.
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<PAGE> 24
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by the
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the corporation, and the words "Corporate Seal, Texas." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted at any meeting of the board of directors at which a quorum
is present, by the affirmative vote of a majority of the directors present at
such meeting (provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting), subject to repeal or change at any
meeting of the shareholders at which a quorum is present, by the affirmative
vote of a majority of the shareholders present at such meeting (provided notice
of the
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<PAGE> 25
proposed alteration, amendment or repeal is contained in the notice of the
meeting).
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<PAGE> 1
Exhibit 3.14
ROMA DINING LP
AGREEMENT OF LIMITED PARTNERSHIP
THIS PARTNERSHIP AGREEMENT, dated as of December 31, 1996 (the
"Effective Date"), is made by and between ROMACORP, INC. ("ROMA"), a Delaware
corporation, as a general partner (the "General Partner") and ROMA HOLDINGS,
INC. ("RHI"), a Delaware corporation, as a limited partner (the "Limited
Partner"). The General Partner and the Limited Partner shall be individually
referred to herein as a "Partner" and collectively referred to herein as the
"Partners".
WITNESSETH:
WHEREAS, the Partners desire to form a limited partnership under the
laws of the State of Delaware for the purposes hereinafter set forth;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
parties hereto hereby agree as follows:
1. Formation. The Partners hereby form and establish a limited
partnership (the "Partnership") pursuant to the provisions of the Revised
Uniform Limited Partnership Act of the State of Delaware to be conducted under
the name of "ROME DINING LP", or such other name as the General Partner may from
time to time determine. A Certificate of Limited Partnership of the Partnership,
dated December 31, 1996 was filed with the Secretary of State of the State of
Delaware on December 31, 1996. The Corporation Trust Company, 1209 Orange
Street, Wilmington, DE 19801, is designated as the agent upon whom process
against the Partnership may be served.
2. Place of Business. The Partnership's principal place of business
shall be located at 9304 Forest Lane, Suite 200, Dallas, Texas 75243, or at such
other place as may be determined from time to time by the Partners.
3. Purposes. The nature of the business to be conducted or promoted by
the Partnership shall be the owning, managing, and operating of restaurants or
any other lawful business in which a limited partnership may engage under
Delaware law.
4. Term. The term of the Partnership shall commence upon the filing of
a Certificate of Limited Partnership with the Secretary of State of the State of
Delaware and shall continue thereafter from year to year for a term of
ninety-nine (99) years.
5. Capital Contributions.
(a) The capital of the Partnership shall be the aggregate amount of the
capital contributions made to it by the General Partner and the Limited Partner.
An individual capital
<PAGE> 2
account shall be established and maintained for each Partner and shall be
credited with the amount of each Partner's capital contribution to the
Partnership. Any Partner whose interest in the Partnership is increased, by
means of the transfer to such Partner of all or a part of the interest of
another Partner, shall have a capital account that has been appropriately
adjusted to reflect such transfer. Each partner's capital account shall be
determined and maintained throughout the term of the Partnership in accordance
with the requirements of Section 704(b) of the Internal Revenue Code of 1986, or
its counterpart in any subsequently enacted Internal Revenue Code, and of the
Treasury Regulations promulgated from time to time thereunder. No Partner shall
be entitled to interest on the Partner's capital contribution, or to withdraw
any part of the Partner's capital account, or to receive any distributions from
the Partnership except as specifically provided in this Agreement.
(b) Each Partner shall make an initial contribution in cash or property
equivalent to its percentage interest in Partnership profits and losses. The
Partners shall make additional capital contributions from time to time in such
amounts as may be determined by the Partners to be necessary to carry out the
purposes of the Partnership. Such amounts shall be determined from time to time.
Such contributions shall be due and payable within the time specified in the
formal approval by the Partners, provided that such period shall not be less
than thirty (30) days.
(c) If a Partner fails to make any required capital contribution, the
necessary funds may be raised by the Partnership by borrowing from the remaining
Partners in such amounts and proportions as the lending Partner shall agree
upon.
6. Allocations.
(a) The income, profits, gains and expenses or losses of the
Partnership shall be allocated or charged to the Partners as follows:
<TABLE>
<CAPTION>
Partner Percentage Interest
------- -------------------
<S> <C>
Romacorp, Inc., General Partner 1%
Roma Holdings, Inc., Limited Partner 99%
</TABLE>
However, in accordance with Section 704(c) of the Internal Revenue Code
of 1986 (the "Code"), income, gain, loss and deduction with respect to any
property contributed to the Partnership shall be allocated among the Partners to
take account of any variation between the adjusted basis of such property to the
Partnership and its fair market value at the time of contribution. For purposes
of this Agreement, "Net Income" and "Net Loss" mean taxable income and taxable
loss, as the case may be, of the Partnership for any year as determined for
Federal income tax purposes, increased by the amount, if any, of tax-exempt
income received or accrued by the Partnership, reduced by the amount, if any, of
all expenditures of the Partnership described in Section 705(a) (2) (B) of the
Internal Revenue Code of 1986, as amended (the "Code"), and adjusted, with
respect to items related to any assets
2
<PAGE> 3
contributed to the Partnership (collectively, the "Contributed Assets"), as
described 13a the following sentence. For purposes of computing Net Income or
Net Loss, (x) the amount of depreciation, depletion or amortization ("Book
Depreciation") for any year with respect to any Contributed Asset shall be
determined in accordance with the methods used for tax purposes and shall equal
the amount that bears the same ratio to the fair market value of such property
at the time that such property was contributed to the Partnership as the
depreciation, depletion or amortization computed for Federal income tax purposes
with respect to such property for such year bears to the adjusted Federal income
tax basis of such property at the time that such property was contributed,
provided however, that if such property has an adjusted Federal income tax basis
of zero at the time that such property is contributed, the rate of Book
Depreciation shall be determined as the Partners may agree; and (y) gain or loss
with respect to the disposition of any Contributed Asset shall be determined by
the difference between (A) the amount realized with respect to such disposition,
and (B) the fair market value of such property at the time of the contribution,
reduced by the amount of any Book Depreciation previously taken into account
with respect to such property for the purpose of computing Net Income and Net
Loss (the "Book Basis"). In the event that any Contributed Asset is distributed
in kind to any Partner, the difference between the fair market value of such
property at the time of distribution and its Book Basis shall be taken into
account as Net Income or Net Loss, as the case may be. This definition shall
determine the calculation of net income or net loss for financial reporting
purposes.
In the event a Partner receives an unexpected adjustment, allocation,
or distinction described in paragraphs (4), (5), or (6) of Section 1.704-1
(b)(2)(ii)(d) of the Treasury Regulations, and such Partner has a deficit
capital account balance after reflecting such item, then such Partner shall be
allocated items of income and gain in accordance with
Section 1.704-l(b)(2)(ii)(d) of the Treasury Regulations (consisting of a pro
rata portion of each item of Partnership income, including gross income, and
gain for such year) in an amount and manner sufficient to eliminate such deficit
balance as quickly as possible.
7. Partnership Distributions. The Partnership may accumulate, and
shall, at least once during each fiscal year of the Partnership, make
distributions of, Partnership property including any cash held by the
Partnership which is not reasonably necessary for the operation of the
Partnership, at such times and in such amounts as determined from time to time
by the General Partner. Any distributions shall be pro rata based upon
percentage interest in Partnership profit.
8. Liability Of Partners. The General Partner shall have unlimited
liability for the repayment and discharge of all debts and obligations of the
Partnership attributable to any fiscal year or portion thereof during which it
is or was a General Partner of the Partnership.
The Limited Partner shall be liable for the repayment and discharge of
all debts and obligations of the Partnership attributable to any fiscal year or
portion thereof during which it is or was a Limited Partner of the Partnership
only to the extent of its Capital Contribution in the Partnership as set forth
above, but shall not relieve it from liability for any unpaid Capital
Contribution it has covenanted in writing to contribute.
3
<PAGE> 4
The Limited Partner or an employee, agent, director or of officer of
the Limited Partner may also be an employee, agent, independent contractor,
director or officer of the Partnership or the General Partner. The existence of
these relationships and the Limited Partner acting in such capacities will not
result in the Limited Partner being deemed to be participating in the control of
the business of the Partnership (within the meaning of the Act) or otherwise
affect the liability of the Limited Partner or the person so acting.
9. Management. The General Partner shall be the managing partner of the
Partnership and shall execute all documents on behalf of the Partnership and to
conduct the normal business and affairs of the Partnership. The Limited Partner
shall have no right whatsoever to participate in the management or control of
the business of the Partnership. The General Partner shall not receive any
compensation for its role as General Partner. Notwithstanding the foregoing, the
Partnership, through its General Partner and without consent of the Limited
Partners, may contract with a Partner for services incident to the operation of
the Partnership business.
10. Disposition of a Partnership Interest. No Partner shall dispose of
all or any part of its Partnership interest without the unanimous consent of the
Partners.
11. Admission of New Partners. New Partners shall not be
admitted to the Partnership without the unanimous consent of the
Partners.
12. Dissolution of the Partnership. In the event of the bankruptcy,
resignation or expulsion of the General Partner, the Partnership shall dissolve,
except upon the unanimous consent of the remaining Partners agreeing to continue
the Partnership.
13. Amendments. This Agreement may be amended at any time
and from time to time upon the unanimous consent of the
Partners.
14. Severability. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid, void,
or unenforceable, the rest of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
15. Entire Agreement. This instrument contains the entire agreement of
the parties relating to the rights granted and the obligations assumed in this
instrument. Any oral representations or modifications concerning this instrument
shall be of no force or effect unless contained in a subsequent written
modification signed by all of the Partners.
16. No Third Party Beneficiaries. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or to give any person
or entity, other than the parties or their successors in interest, any rights or
remedies under this Agreement.
4
<PAGE> 5
17. Waiver. Failure to enforce any term or condition of this Agreement
shall not be deemed a waiver of that term or condition for the future, nor shall
any specific waiver of a term or condition at one time be deemed a waiver of
such term or condition for the future.
18. Indemnification=. To the fullest extent permitted by the law of
Delaware, as the same may be amended from time to time, the Partnership shall
indemnify any and all of its Partners, agents or employees, or former Partners,
agents or employees, or any person who may have served at the Partnership's
request as an of officer of any corporation, partnership, joint venture, trust
or other enterprise.
19. Qualification in Other States. The General Partner shall qualify
the Partnership to do business in such other states as are appropriate to the
conduct of the Partnership's business.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers on the Effective Date.
ROMA HOLDINGS, INC.
By: /s/ David G. Short By: /s/ Troy D. Cook
_______________________ _________________________
David G. Short, Troy D. Cook,
Secretary Vice President
ROMA CORP, INC.
By: /s/ David G. Short By: /s/ Robert B. Page
_______________________ _________________________
David G. Short, Robert B. Page,
Secretary President
5
<PAGE> 1
EXHIBIT 4.1
INDENTURE
DATED AS OF JULY 1, 1998
AMONG
ROMACORP, INC., AS ISSUER
THE GUARANTORS NAMED HEREIN,
AND
UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE
------------------
$100,000,000 PRINCIPAL AMOUNT
12% SENIOR NOTES DUE 2006, SERIES A
12% SENIOR NOTES DUE 2006, SERIES B
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TRUST INDENTURE
INDENTURE
ACT SECTION SECTION
----------- -------
<S> <C>
Section 310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.08, 7.10.
(b) 7.08; 7.10; 13.02
(c) N.A.
Section 311(a) 7.11
(b) 7.11
(c) N.A.
Section 312(a) 2.05
(b) 13.03
(c) 13.03
Section 313(a) 7.06
(b)(1) 7.06
(b)(2) 7.06
(c) 7.06; 13.02
(d) 7.06
Section 314(a) 4.11; 4.12; 13.02
(b) N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d) N.A.
(e) 13.05
(f) N.A.
Section 315(a) 7.01(b)
(b) 7.05; 13.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
Section 316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 10.04
Section 317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
Section 318(a) 13.01
</TABLE>
- ----------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. 19
SECTION 1.03. Rules of Construction. 20
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating. 20
SECTION 2.02. Execution and Authentication. 21
SECTION 2.03. Registrar and Paying Agent. 21
SECTION 2.04. Paying Agent To Hold Assets in Trust. 22
SECTION 2.05. Holder Lists. 22
SECTION 2.06. Transfer and Exchange. 22
SECTION 2.07. Replacement Securities. 23
SECTION 2.08. Outstanding Securities. 23
SECTION 2.09. Treasury Securities. 24
SECTION 2.10. Temporary Securities. 24
SECTION 2.11. Cancellation. 24
SECTION 2.12. Defaulted Interest. 24
SECTION 2.13. CUSIP Number. 25
SECTION 2.14. Deposit of Moneys. 25
SECTION 2.15. Book-Entry Provisions for Global Securities. 25
SECTION 2.16. Registration of Transfers and Exchanges. 26
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee. 30
SECTION 3.02. Selection of Securities To Be Redeemed. 30
SECTION 3.03. Notice of Redemption. 30
SECTION 3.04. Effect of Notice of Redemption. 31
SECTION 3.05. Deposit of Redemption Price. 31
SECTION 3.06. Securities Redeemed in Part. 32
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities. 32
SECTION 4.02. Maintenance of Office or Agency. 32
SECTION 4.03. Limitations on Transactions with Affiliates. 33
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness. 34
SECTION 4.05. Limitation on Asset Sales. 34
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 4.06. Limitation on Restricted Payments. 36
SECTION 4.07. Corporate Existence. 38
SECTION 4.08. Payment of Taxes and Other Claims. 38
SECTION 4.09. Notice of Defaults. 39
SECTION 4.10. Maintenance of Properties and Insurance. 39
SECTION 4.11. Compliance Certificate. 39
SECTION 4.12. Reports to Holders. 40
SECTION 4.13. Waiver of Stay, Extension or Usury Laws. 40
SECTION 4.14. Change of Control. 40
SECTION 4.15. Conduct of Business. 41
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions Affecting
Subsidiaries. 41
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries. 42
SECTION 4.18. Limitation on Liens. 42
SECTION 4.19. Issuance of Subsidiary Guarantees. 43
SECTION 4.20. Payments for Consents. 43
SECTION 4.21. Further Instruments and Acts. 40
ARTICLE FIVE
MERGERS; SUCCESSORS
SECTION 5.01. Mergers, Consolidation and Sale of Assets. 43
SECTION 5.02. Successor Substituted. 45
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. 45
SECTION 6.02. Acceleration. 46
SECTION 6.03. Other Remedies. 47
SECTION 6.04. Waiver of Past Default. 48
SECTION 6.05. Control by Majority. 48
SECTION 6.06. Limitation on Suits. 48
SECTION 6.07. Rights of Holders To Receive Payment. 49
SECTION 6.08. Collection Suit by Trustee. 49
SECTION 6.09. Trustee May File Proofs of Claim. 49
SECTION 6.10. Priorities. 50
SECTION 6.11. Undertaking for Costs. 50
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. 50
SECTION 7.02. Rights of Trustee. 51
SECTION 7.03. Individual Rights of Trustee. 52
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 7.04. Trustee's Disclaimer. 52
SECTION 7.05. Notice of Defaults. 53
SECTION 7.06. Reports by Trustee to Holders. 53
SECTION 7.07. Compensation and Indemnity. 53
SECTION 7.08. Replacement of Trustee. 54
SECTION 7.09. Successor Trustee by Merger, etc. 55
SECTION 7.10. Eligibility; Disqualification. 55
SECTION 7.11. Preferential Collection of Claims Against the Company. 55
ARTICLE EIGHT
[INTENTIONALLY OMITTED]
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Termination of the Company's Obligations. 56
SECTION 9.02. Legal Defeasance and Covenant Defeasance. 59
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance. 60
SECTION 9.04. Application of Trust Money. 60
SECTION 9.05. Repayment to the Company. 60
SECTION 9.06. Reinstatement. 60
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders. 61
SECTION 10.02. With Consent of Holders. 62
SECTION 10.03. Compliance with Trust Indenture Act. 63
SECTION 10.04. Revocation and Effect of Consents. 63
SECTION 10.05. Notation on or Exchange of Securities. 63
SECTION 10.06. Trustee To Sign Amendments, etc. 63
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee. 64
SECTION 11.02. Severability. 64
SECTION 11.03. Limitation of Guarantor's Liability. 65
SECTION 11.04. Contribution. 65
SECTION 11.05. Execution of Guarantee. 65
SECTION 11.06. Subordination of Subrogation and Other Rights. 65
ARTICLE TWELVE
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls. 66
SECTION 13.02. Notices. 66
SECTION 13.03. Communications by Holders with Other Holders. 68
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. 68
SECTION 13.05. Statements Required in Certificate or Opinion. 68
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar. 68
SECTION 13.07. Governing Law. 69
SECTION 13.08. No Recourse Against Others. 69
SECTION 13.09. Successors. 69
SECTION 13.10. Counterpart Originals. 69
SECTION 13.11. Severability. 69
SECTION 13.12. No Adverse Interpretation of Other Agreements. 69
SECTION 13.13. Legal Holidays. 69
SIGNATURES S-1
EXHIBIT A Form of Series A Security. A-1
EXHIBIT B Form of Series B Security. B-1
EXHIBIT C Form of Legend for Global Securities. C-1
EXHIBIT D Form of Transfer Certificate. D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited Investors. E-1
</TABLE>
- -----------------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-6-
<PAGE> 7
INDENTURE dated as of July 1, 1998, among ROMACORP, INC., a
Delaware corporation (the "Company"), as Issuer, each of the GUARANTORS named
herein, as guarantors, and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries (a) existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Subsidiaries or (b) assumed in connection with the
acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Additional Interest" has the meaning provided in the
Registration Rights Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. The term "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; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (a) an Investment by the Company or
any Restricted Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Restricted Subsidiary of the Company or any
Restricted Subsidiary of the Company, or shall be merged with or into the
Company or any Restricted Subsidiary of the Company, or (b) the acquisition by
the Company or any Restricted Subsidiary of the Company of the assets of any
Person (other than a Restricted Subsidiary of the Company) which constitute all
or substantially all of the assets of such Person or comprise any division or
line of business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and
<PAGE> 8
-8-
Leaseback Transaction) to any Person other than the Company or a Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company; or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $1.0
million, (ii) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Company as permitted under Section
5.01 of this Indenture or any disposition that constitutes a Change of Control,
(iii) the licensing of intellectual property, (iv) disposals or replacements of
obsolete, uneconomical, negligible, surplus or worn out property, (v) the sale,
lease, conveyance, disposition or other transfer by the Company or any
Restricted Subsidiary of the Company of assets or property in connection with
Restricted Payments permitted under Section 4.06 of this Indenture; and (vi) any
disposition of up to three restaurants owned by the Company as of the Issue Date
pursuant to a Sale and Lease Back Transaction involving such properties.
"Bankruptcy Law" see Section 6.01.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person and to
be in full force and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means a day that is not a Saturday, a Sunday or
a day on which banking institutions in New York, New York are not required to be
open.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and preferred stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation ("S&P") or
Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no
more than one year from the
<PAGE> 9
-9-
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $250,000,000; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above; and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) the sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture) other than to the Permitted Holders; (ii) the approval by the holders
of Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in compliance with the
provisions of this Indenture); (iii) any Person or Group (other than the
Permitted Holders) shall become the owner, directly or indirectly, beneficially,
of shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company or
Holdings; or (iv) the first day on which a majority of the members of the Board
of Directors of the Company or Holdings during the two year period immediately
preceding such date are not Continuing Directors. Notwithstanding anything to
the contrary contained in the foregoing, a "Change of Control" shall not be
deemed to occur upon consummation of (A) the Recapitalization, (B) the merger of
the Company with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction or (C) any transaction
described in clause (i) of the immediately preceding sentence if, after giving
effect to such transaction, no Person or Group (other than the Permitted
Holders) shall beneficially own, directly or indirectly, shares of Capital Stock
representing 50% or more of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Company or Holdings, as the case
may be.
"Change of Control Date" see Section 4.14.
"Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person's common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture.
"Consolidated EBITDA" means, with respect to any Person, for
any period, the sum (without duplication) of (i) Consolidated Net Income and
(ii) to the extent Consolidated Net Income has been reduced thereby, (A) all
income taxes and foreign withholding taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period, (B)
Consolidated Interest Expense, (C) Consolidated Non-cash Charges, (D) an amount
equal to any extraordinary loss or loss realized in connection with an asset
sale and (E) for any fiscal year of the Company commencing on or after 2000;
pre-opening expenses relating to the opening of restaurants not to exceed $3.0
million in any one fiscal year less, to the extent Consolidated Net Income has
been
<PAGE> 10
-10-
increased thereby, any non-cash items increasing Consolidated Net Income
for such period, all as determined on a consolidated basis for such Person and
its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person, the ratio of Consolidated EBITDA of such Person during the four
full fiscal quarters (the "Four Quarter Period") ending on or prior to the date
of the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Restricted Subsidiaries (including any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If such
Person or any of its Restricted Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (2) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of (i) Consolidated Interest
Expense, plus (ii) the amount of all dividend payments on any series of
preferred stock of such Person (other than dividends paid in Qualified Capital
Stock paid, accrued or scheduled to be paid or accrued during such period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted
<PAGE> 11
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Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, including, without limitation, (a) any amortization of debt discount
and (b) the net costs under Interest Swap Obligations; and (ii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP, but, in
each case of clauses (i) and (ii) excluding any amortization or write-off of
deferred financing costs.
"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate net income (or loss) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided that there shall be excluded therefrom (a)
after-tax gains and losses from Asset Sales (without giving effect to the
proviso therein) or abandonments or reserves relating thereto, (b) after-tax
items classified as extraordinary or nonrecurring gains and losses, (c) the net
income or loss of any Person acquired in a "pooling of interests" transaction
accrued prior to the date it becomes a Restricted Subsidiary of the referent
Person or is merged or consolidated with the referent Person or any Restricted
Subsidiary of the referent Person, (d) the net income (but not loss) of any
Restricted Subsidiary of the referent Person to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of that
income is restricted by a contract, operation of law or otherwise, (e) the net
loss of any Person other than a Restricted Subsidiary of the Company, (f) the
net income of any Person, other than a Restricted Subsidiary of the referent
Person, except to the extent of cash dividends or distributions paid to the
referent Person or to a Wholly Owned Restricted Subsidiary of the referent
Person by such Person, (g) income or loss attributable to discontinued
operations (including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontinued), (h) in
the case of a successor to the referent Person by consolidation or merger or as
a transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets, (i)
non-cash, non-recurring charges reducing Consolidated Net Income (excluding any
such non-cash charge to the extent it represents an accrual of or reserve for
cash charges in any future period or amortization of prepaid cash expense that
was paid in a prior period not included in the calculation), (j) non-cash
compensation charges, including any arising from stock options, (k) gains and
losses due solely to fluctuations in currency values and the related tax effects
according to GAAP, (l) expenses related to the Recapitalization, (m) any expense
resulting from any amortization or write-off or deferred financing costs and (n)
expenses related to amortization of goodwill resulting from purchase accounting
not to exceed $1.0 million in any four fiscal quarter period.
"Consolidated Non-cash Charges" means, with respect to any
Person, for any period, the aggregate depreciation, amortization and other
non-cash expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges constituting an extraordinary item or loss or any such charge
which requires an accrual of or a reserve for cash charges for any future
period).
"Consolidated Tangible Assets" means, with respect to any
Person, as of any date of determination, the total assets, less goodwill,
deferred financing costs and other intangibles and less accumulated
amortization, shown on the most recent balance sheet of such Person, determined
on a consolidated basis in accordance with GAAP.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company or Holdings, as the case may
be, who (i) was a member of such
<PAGE> 12
-12-
Board of Directors on the first day of the two-year period immediately preceding
such date of determination or (ii) was nominated for election or elected to such
Board of Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of the Principal or its Affiliates or was
nominated by the Principal or its Affiliates or any designees of the Principal
or its Affiliates on the Board of Directors.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 13.02 or such other address as the
Trustee may give notice to the Company.
"Covenant Defeasance" has the meaning set forth in Section
9.02.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any Restricted Subsidiary of the Company against
fluctuations in currency values.
"Custodian" see Section 6.01.
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an Event
of Default.
"Depository" means, with respect to the Securities issued in
the form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Disqualified Capital Stock" means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable (other than upon the occurrence of a
Change of Control), pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Securities.
"Domestic Wholly Owned Restricted Subsidiary" means a Wholly
Owned Restricted Subsidiary incorporated or otherwise organized under the laws
of the United States, any state thereof or any territory or possession of the
United States.
"Event of Default" see Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Securities" means the 12% Senior Notes due 2006,
Series B, to be issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement.
"Expiration Date" has the meaning set forth in the definition
of "Offer to Purchase" below.
"fair market value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a
<PAGE> 13
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willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"Final Maturity Date" means July 1, 2006.
"Funding Guarantor" see Section 11.04.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date. Except as otherwise set forth herein, all ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP applied on a consistent basis.
"Global Securities" means one or more IAI Global Securities,
Reg. S Global Securities and 144A Global Securities.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the Company thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such Government
Securities or a specific payment of principal of or interest on any such
Government Securities held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Securities or the specific payment of principal of or
interest on the Government Securities evidenced by such depository receipt.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness or other obligations.
"Guarantee" means any guarantee of the obligations of the
Company under this Indenture and the Securities by any Restricted Subsidiary in
accordance with the provisions of this Indenture. When used as a verb,
"Guarantee" shall have a corresponding meaning.
"Guarantor" means any Restricted Subsidiary that incurs a
Guarantee; provided that upon the release and discharge of such Restricted
Subsidiary from its Guarantee in accordance with this Indenture, such Restricted
Subsidiary shall cease to be a Guarantor.
"Holder" means the registered holder of any Security.
<PAGE> 14
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"Holdings" means Romacorp Restaurant Holdings, Inc.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
to Institutional Accredited Investors.
"Indebtedness" means with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business), (v) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction, (vi) guarantees and
other contingent obligations of such Person in respect of Indebtedness referred
to in clauses (i) through (v) above and clause (viii) below, (vii) all
obligations of any other Person of the type referred to in clauses (i) through
(vi) which are secured by any lien on any property or asset of such Person, the
amount of such obligation being deemed to be the lesser of the fair market value
of such property or asset or the amount of the obligation so secured, (viii) all
obligations under currency agreements and interest swap agreements of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes of this Indenture, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the Company of such Disqualified Capital
Stock.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Independent Financial Advisor" means a firm (i) which does
not, and whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Initial Securities" means the 12% Senior Notes due 2006,
Series A, of the Company.
"Initial Purchasers" means Salomon Brothers Inc and Schroder &
Co. Inc.
"Insolvency or Liquidation Proceeding" means, with respect to
any Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of
any cash interest and any
<PAGE> 15
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Additional Interest on the Securities.
"Interest Payment Date" means each semiannual interest payment
date on January 1 and July 1 of each year, commencing January 1, 1999.
"Interest Record Date" for the interest payable on any
Interest Payment Date (except a date for payment of defaulted interest) means
the December 15 or June 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Interest Swap Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of Section 4.06 of this
Indenture, (i) "Investment" shall include and be valued at the fair market value
of the net assets of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair
market value of the net assets of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced by
the payment of dividends or distributions in connection with such Investment or
any other amounts received in respect of such Investment; provided that no such
payment of dividends or distributions or receipt of any such other amounts shall
be included in Consolidated Net Income to the extent such amounts have so
reduced the amount of any Investment. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Common Stock of any
direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, the Company no longer owns, directly or
indirectly, 100% of the outstanding Common Stock of such Restricted Subsidiary,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the
Securities.
"Legal Defeasance" has the meaning set forth in Section 9.02.
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in
<PAGE> 16
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the nature thereof and any agreement to give any security interest).
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Indebtedness
that is required to be repaid in connection with such Asset Sale and (d)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, post-closing adjustments, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"New Revolving Credit Facility" means the Credit Agreement
dated as of the Issue Date, among the Company, Holdings, the lenders party
thereto in their capacities as lenders thereunder and The Provident Bank, as
agent, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including, without limitation, increasing the amount of available
borrowings thereunder or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer
to Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent
by or on behalf of the Company by first-class mail, postage prepaid, to the
record Holders as shown on the register of Holders for the Securities on the
date of the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by applicable
law, the Offer shall specify an expiration date (the "Expiration Date") of the
Offer to Purchase, which shall be not less than 20 days nor more than 30 days
after the date of such Offer, and a settlement date (the "Purchase Date") for
purchase of Securities to occur no later than three Business Days after the
Expiration Date. The Company shall notify the Trustee at least five Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to Purchase is
being made; (2) the
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Expiration Date and the Purchase Date; (3) the aggregate principal amount of the
outstanding Securities offered to be purchased by the Company pursuant to the
Offer to Purchase (including, if less than 100%, the manner by which such amount
has been determined pursuant to the Section of this Indenture requiring the
Offer to Purchase) (the "Purchase Amount"); (4) the purchase price to be paid by
the Company for each $1,000 aggregate principal amount of Securities accepted
for payment (as specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the Securities registered
in the name of such Holder and that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount; (6) the place or
places where Securities are to be surrendered for tender pursuant to the Offer
to Purchase; (7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue; (8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date; (9) that each Holder electing to tender all or any portion of a
Security pursuant to the Offer to Purchase will be required to surrender such
Security at the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Company or the
Trustee so require, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing); (10) that
Holders will be entitled to withdraw all or any portion of Securities tendered
if the Company (or the Paying Agent) receives, not later than the close of
business on the fifth Business Day next preceding the Expiration Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder tendered, the certificate number of
the Security the Holder tendered and a statement that such Holder is withdrawing
all or a portion of his tender; (11) that (a) if Securities in an aggregate
principal amount less than or equal to the Purchase Amount are duly tendered and
not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all
such Securities and in accordance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed or, if
not so listed, on a pro rata basis, by lot or by such other method as the
Trustee shall deem fair and appropriate (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 principal amount
or integral multiples thereof shall be purchased); and (12) that in the case of
any Holder whose Security is purchased only in part, the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of such Security, a
new Security or Securities, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"Officer" of any Person means the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice President
(whether or not such title is preceded or followed by one or more words or
phrases), the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of such Person.
"Officers' Certificate" of any Person means a certificate
signed on behalf of such Person or the general partner, in the case of a limited
partnership, or member, in the case of a limited liability company, of such
Person by the Chairman of the Board, the President, any Executive Vice
President, Senior Vice President or Vice President (whether or not such title is
preceded or followed by one or more words or phrases) and by the Treasurer or
any Assistant Treasurer or the Secretary or
<PAGE> 18
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any Assistant Secretary of such Person, that meets the requirements set forth in
Sections 13.04 and 13.05 of this Indenture.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Participant" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" means (i) the Principal, (ii) Eric D.
Bommer, David S. Lobel and John F. McCormack and (iii) any Person, a majority of
the voting power represented by the issued and outstanding Capital Stock of
which is beneficially owned, directly or indirectly, by one or more Persons
identified in clauses (i) and (ii) of this definition.
"Permitted Indebtedness" means, without duplication, each of
the following:
(i) Indebtedness under the Securities and the Exchange Notes
issued in exchange therefor;
(ii) Indebtedness incurred pursuant to the New Revolving
Credit Facility in an aggregate principal amount at any time
outstanding not to exceed $20.0 million;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually
paid or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of
its Restricted Subsidiaries; provided, however, that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness
incurred in accordance with this Indenture to the extent the notional
principal amount of such Interest Swap Obligation does not exceed the
principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(v) Indebtedness under Currency Agreements; provided that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company and
its Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of
the Company to the Company or to a Wholly Owned Restricted Subsidiary
of the Company for so long as such Indebtedness is held by the Company
or a Wholly Owned Restricted Subsidiary of the
<PAGE> 19
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Company, in each case subject to no Lien (other than Liens permitted
under this Indenture) held by a Person other than the Company or a
Wholly Owned Restricted Subsidiary of the Company; provided that if as
of any date any Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company owns or holds any such
Indebtedness or holds a Lien (other than Liens permitted under this
Indenture) in respect of such Indebtedness, such date shall be deemed
the incurrence of Indebtedness not constituting Permitted Indebtedness
by the Company of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company; provided that (a)
any Indebtedness of the Company to any Wholly Owned Restricted
Subsidiary of the Company is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under this Indenture
and the Securities and (b) if as of any date any Person other than a
Wholly Owned Restricted Subsidiary of the Company owns or holds any
such Indebtedness or any Person holds a Lien (other than Liens
permitted under this Indenture) in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five business
days of incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations
in connection with self-insurance or similar requirements in the
ordinary course of business;
(x) Indebtedness represented by Capitalized Lease
Obligations and Purchase Money Indebtedness of the Company and its
Restricted Subsidiaries not to exceed the greater of $10.0 million and
5% of Consolidated Tangible Assets of the Company at any one time
outstanding;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary of the Company in a
principal amount not to exceed the gross proceeds actually received by
the Company or any of its Restricted Subsidiaries in connection with
such disposition;
(xii) obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary of the Company in the ordinary course of business;
(xiii) guarantees by the Company and the Guarantors of each
other's Indebtedness; provided that such Indebtedness is permitted to
be incurred under this Indenture;
<PAGE> 20
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(xiv) Refinancing Indebtedness; and
(xv) additional Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$7.0 million at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company
or any Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly Owned Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary of the Company; (ii) Investments in the Company by any
Restricted Subsidiary of the Company; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Securities and this Indenture; (iii)
investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes not in excess of $1.0 million
at any one time outstanding; (v) Currency Agreements and Interest Swap
Obligations entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with this
Indenture; (vi) Investments not to exceed $5.0 million at any one time
outstanding; (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (viii)
Investments made by the Company or its Restricted Subsidiaries as a result of
consideration received in connection with an Asset Sale made in compliance with
Section 4.05 of this Indenture; (ix) accounts receivable created or acquired in
the ordinary course of business; (x) guarantees by the Company of Indebtedness
otherwise permitted to be incurred by Restricted Subsidiaries of the Company
under this Indenture; and (xi) Investments the payment for which consists
exclusively of Qualified Capital Stock of the Company.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
<PAGE> 21
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(v) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of the real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(vi) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;
(vii) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds
thereof;
(viii) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(ix) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under this Indenture;
(x) Liens securing (a) Capitalized Lease Obligations
permitted pursuant to clause (x) of the definition of "Permitted
Indebtedness" and (b) Liens securing Purchase Money Indebtedness
(including by means of a Capitalized Lease Obligation) incurred in
accordance with this Indenture; provided, however, that in the case of
Purchase Money Indebtedness (A) the Indebtedness shall not exceed the
cost of such property or assets and shall not be secured by any
property or assets of the Company or any Restricted Subsidiary of the
Company other than the property and assets so acquired or constructed
and (B) the Lien securing such Indebtedness shall be created within 180
days of such acquisition or construction or, in the case of a
refinancing of any Purchase Money Indebtedness, within 180 days of such
refinancing;
(xi) Liens securing Indebtedness under Currency Agreements;
(xii) Liens securing Acquired Indebtedness incurred in
accordance with Section 4.04 of this Indenture; provided that (A) such
Liens secured such Acquired Indebtedness at the time of and prior to
the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company and were not granted in connection
with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company
and (B) such Liens do not extend to or cover any property or assets of
the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company;
(xiii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not in the aggregate
<PAGE> 22
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exceed $3.0 million at any one time outstanding;
(xiv) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the
Company and its Restricted Subsidiaries;
(xv) Liens arising from filing Uniform Commercial Code
financing statements regarding leases (other than Capitalized Lease
Obligations);
(xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of custom duties in
connection with the importation of goods;
(xvii) Liens existing on the Issue Date, together with any
Liens securing Refinancing Indebtedness incurred in order to refinance
the Indebtedness secured by Liens existing on the Issue Date; provided
that the Liens securing the Refinancing Indebtedness shall not extend
to property other than that pledged under the Liens securing the
Indebtedness being refinanced;
(xviii) Liens securing Indebtedness incurred pursuant to a
Sale and Leaseback Transaction involving up to three restaurants owned
by the Company as of the Issue Date; and
(xix) Liens securing Indebtedness under the New Revolving
Credit Facility.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Physical Securities" means one or more certificated
Securities in registered form.
"preferred stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"principal" of a debt security means the principal of the
security, plus, when appropriate, the premium, if any, on the security.
"Principal" means Sentinel Inc.
"Private Exchange Notes" has the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set
forth on the Initial Securities in the form set forth on Exhibit A hereto.
"Public Equity Offering" means an underwritten public offering
of Qualified Capital Stock of the Company or of Holdings pursuant to a
registration statement filed with the Commission in accordance with the
Securities Act; provided that in the event of a Public Equity Offering by
Holdings, Holdings contributes to the common equity capital of the Company
(other than Disqualified Capital Stock of the Company) the portion of the net
cash proceeds of such Public Equity Offering necessary to pay the aggregate
redemption price (plus accrued and unpaid interest and Additional Interest, if
any, thereon to the redemption date) of the Securities to be so redeemed.
<PAGE> 23
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"Purchase Agreement" means the Purchase Agreement dated as of
June 26, 1998 by and among the Company, the Guarantors named therein and the
Initial Purchasers.
"Purchase Amount" has the meaning set forth in the definition
of "Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the
Company and its Restricted Subsidiaries incurred for the purpose of financing
all or any part of the purchase price, or the cost of installation, construction
or improvement, of property (real or personal) or equipment (whether through the
direct purchase of assets or the Capital Stock of any Person owning such
assets).
"Purchase Price" has the meaning set forth in the definition
of "Offer to Purchase" above.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Recapitalization" means the recapitalization of the Company
on the Issue Date pursuant to the Recapitalization Agreement dated as of April
24, 1998, by and among the Company, NPC International, Inc., NPC Restaurant
Holdings, Inc. and Sentinel Capital Partners, L.P.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"redemption price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed hereto as Exhibit A.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire,
or to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the
Company or any Restricted Subsidiary of the Company of (A) for purposes of
clause (xv) of the definition of Permitted Indebtedness, Indebtedness incurred
in accordance with Section 4.04 of this Indenture (other than pursuant to clause
(ii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), or (xv) of
the definition of Permitted Indebtedness) or (B) for any other purpose,
Indebtedness issued in accordance with Section 4.04 of this Indenture, in each
case that does not (1) result in an increase in the aggregate principal amount
of Indebtedness of such Person as of the date of such proposed Refinancing (plus
the amount of any premium required to be paid under the terms of the instrument
governing such Indebtedness and plus the amount of reasonable expenses incurred
by the Company in connection with such
<PAGE> 24
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Refinancing) except to the extent such increase is otherwise permitted to be
incurred under this Indenture or (2) create Indebtedness with a Weighted Average
Life to Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced; provided that (x) if such Indebtedness being
Refinanced is Indebtedness solely of the Company or a Guarantor, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and/or one
or more Guarantors and (y) if such Indebtedness being Refinanced is subordinate
or junior to the Securities or a Guarantee, then such Refinancing Indebtedness
shall be subordinate or junior to the Securities or such Guarantee at least to
the same extent and in the same manner as the Indebtedness being Refinanced.
"Reg. S Global Security" means a global security in registered
form representing the aggregate principal amount of Securities sold pursuant to
Regulation S under the Securities Act.
"Registrar" see Section 2.03.
"Registration" means a registered exchange offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of July 1, 1998 by and among the Company, the Guarantors
named therein and the Initial Purchasers.
"Restricted Payments" see Section 4.06.
"Restricted Security" has the meaning set forth in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Security is a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of
such Person which at the time of determination is not an Unrestricted
Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
<PAGE> 25
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"Significant Subsidiary", with respect to any Person, means
any Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"Strategic Equity Investment" means an Investment in Qualified
Capital Stock of the Company or Holdings with cash proceeds to the Company or
Holdings, as the case may be, of at least $30.0 million by a Strategic Investor;
provided that in the case of a Strategic Equity Investment in Holdings, Holdings
contributes to the common equity capital of the Company (other than Disqualified
Capital Stock of the Company) the portion of the net cash proceeds of such
Strategic Equity Investment necessary to pay the aggregate redemption price
(plus accrued and unpaid interest and Additional Interest, if any, thereon to
the redemption date) of the Securities to be redeemed.
"Strategic Investors" means a Person, which, prior to the
making of a Strategic Equity Investment, (i) is (or a Subsidiary of which is, or
is a Subsidiary of a Person which, or a Subsidiary of which, is) engaged in a
business which would be permitted to be conducted by the Company pursuant to
Section 4.15 of this Indenture and (ii) has (or is a Subsidiary of a Person
which has) a common equity market capitalization of at least $2.0 billion.
"Subsidiary", with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such Person
or (ii) any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly, owned by
such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture (except as provided in Section 10.03) until such time as the Indenture
is qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department of the Trustee (or any successor group of the Trustee) including any
vice president, assistant vice president, assistant secretary, assistant
treasurer or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at that time
shall be such officers, and also means, with respect to a particular corporate
trust matter, any other officer to whom such trust matter is referred because of
his knowledge of and familiarity with the particular subject.
"United States Government Obligations" means direct
non-callable obligations of the United States for the payment of which the full
faith and credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do
not and are not required to bear the Private Placement Legend in the form set
forth in Exhibit A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
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"Unrestricted Subsidiary" of any Person means (i) any
Subsidiary of such Person that at the time of determination shall be or continue
to be designated an Unrestricted Subsidiary by the Board of Directors of such
Person in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that (x) the
Company certifies to the Trustee that such designation complies with Section
4.06 of this Indenture and (y) each Subsidiary to be so designated and each of
its Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary only if (x) immediately after giving effect to
such designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.04
of this Indenture and (y) immediately before and immediately after giving effect
to such designation, no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the
Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, a
Guarantor or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule
agreements to which the Company is subject, if any, or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Each Security shall be dated the date of its authentication and shall show
such date. Global Securities shall bear the legend set forth in Exhibit C
hereto. The aggregate principal amount of the Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.
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SECTION 2.02. Execution and Authentication.
Two Officers of the Company, including no more than one
signing solely as Assistant Secretary, shall sign, or one Officer (other than as
an Assistant Secretary) shall sign and the Secretary or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Officer's signature, the Securities for
the Company by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Securities for
original issue in an aggregate principal amount not to exceed $100,000,000, (ii)
Private Exchange Notes from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to time
in exchange for (A) a like principal amount of Initial Securities or (B) a like
principal amount of Private Exchange Notes, in each case upon a written order of
the Company in the form of an Officers' Certificate. Each such written order
shall specify the amount of Securities to be authenticated and the date on which
the Securities are to be authenticated, whether the Securities are to be Initial
Securities, Private Exchange Securities or Unrestricted Securities and whether
the Securities are to be issued as Physical Securities or Global Securities and
such other information as the Trustee may reasonably request. The aggregate
principal amount of Securities outstanding at any time may not exceed
$100,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under
this Indenture shall vote and consent together on all matters (as to which any
of such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent for service of notices and demands and to deal
with the Company and Affiliates of the Company. The Trustee shall not be liable
for any act or any failure of the authenticating agent to perform any duty
either required herein or authorized herein to be performed by such person in
accordance with this Indenture.
The Securities shall be issuable only in fully registered form
without coupons in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or
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for exchange (the "Registrar"), (b) Securities may be presented or surrendered
for payment (the "Paying Agent") and (c) notices and demands in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company, upon notice
to the Trustee, may appoint one or more co-Registrars and one or more additional
Paying Agents. The term "Registrar" includes any co-Registrar and the term
"Paying Agent" includes any additional Paying Agent. Except as provided herein,
the Company or any Guarantor may act as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent and any change in the address of such Agent.
If the Company fails to appoint and maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. The Company at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the Paying Agent shall have no further
liability for such assets. If the Company, any Guarantor or any of their
respective Affiliates acts as Paying Agent, it shall, on or before each due date
of the principal of or interest on the Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Securities.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee, in writing at least five business days before each
Interest Record Date and at such other times as the Trustee may request in
writing, a list as of such date and in such form as the Trustee may reasonably
require of the names and addresses of Holders, which list may be conclusively
relied upon by the Trustee and the Company shall otherwise comply with TIA
Section 312(a).
SECTION 2.06. Transfer and Exchange.
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Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.05,
4.14, or 10.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee and any Agent may deem and treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary. Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest in a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depository (or its agent), and that
ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. Such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect the
Company, the Trustee and any Agent from any loss which any of them may suffer if
a Security is replaced. The Company and the Trustee may charge such Holder for
their reasonable out-of-pocket expenses in replacing a Security, including
reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
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If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Final Maturity
Date the Paying Agent holds money sufficient to pay all of the principal and
interest due on the Securities payable on that date, and is not prohibited from
paying such money to the Holders pursuant to the terms of this Indenture, then
on and after that date such Securities cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, a Guarantor or any of their respective
Affiliates shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that a Trust Officer of the Trustee actually knows
are so owned shall be disregarded.
The Company shall notify the Trustee, in writing, when the
Company, a Guarantor or any of their respective Affiliates repurchases or
otherwise acquires Securities and of the aggregate principal amount of such
Securities so repurchased or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities upon
receipt of a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of temporary
Securities to be authenticated and the date on which the temporary Securities
are to be authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities and as shall be reasonably acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Securities in exchange for temporary
Securities. Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel, and at the written direction of the
Company, deliver canceled Securities to the Company. Subject to Section 2.07,
the Company may not issue new Securities to replace Securities that it has
redeemed, paid or delivered to the Trustee for cancellation. If the Company or
any Guarantor shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the
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same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time
to time on demand at the rate of interest then borne by the Securities. The
Company shall, to the extent lawful, pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the rate of
interest then borne by the Securities.
If the Company defaults in a payment of interest on the
Securities, they shall pay the defaulted interest, plus (to the extent lawful)
any interest payable on the defaulted interest to the Persons who are Holders on
a subsequent special record date, which date shall be the fifteenth day
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid
prior to the expiration of the 30-day period set forth in Section 6.01(i) shall
be paid to Holders as of the Interest Record Date for the Interest Payment Date
for which interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP"
number and the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Securities, and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption or exchange shall not be affected by any
defect in or omission of such CUSIP number. The Company shall promptly notify
the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest
Payment Date, Redemption Date, Purchase Date and the Final Maturity Date, the
Company shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Purchase Date or Final Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Purchase Date or Final Maturity
Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository
("Participants") shall have no rights
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under this Indenture with respect to any Global Security held on their behalf by
the Depository, or the Trustee as its custodian, or under the Global Security,
and the Depository may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of the Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities may
be transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When
Physical Securities are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for Registration of transfer or exchange:
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(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(II) in the case of Physical Securities the offer and sale of
which have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company,
by the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the
Registrar or co-Registrar by a Holder for
Registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect (substantially in the form of Exhibit D
hereto); or
(B) if such Physical Security is being transferred to a
QIB in accordance with Rule 144A, a certification to
that effect (substantially in the form of Exhibit D
hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the
form of Exhibit D hereto) and a transferee letter of
representation substantially in the form of Exhibit E
hereto and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with
the Securities Act; or
(D) if such Physical Security is being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and,
at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(E) if such Physical Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit
D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in
compliance with the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security the offer and sale
of which has not been registered under the Securities Act may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D
hereto, that such Physical Security is being
transferred (I) to a QIB or (II) to an Accredited
Investor and, with respect to (II), at the option of
the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such
transfer is in
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compliance with the Securities Act; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to
make, an endorsement on the applicable Global
Security to reflect an increase in the aggregate
amount of the Securities represented by the Global
Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no Global Security is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the Registration of transfer of an
interest in a Global Security to another type of Global Security, together with
the applicable Global Securities (or, if the applicable type of Global Security
required to represent the interest as requested to be transferred is not then
outstanding, only the Global Security representing the interest being
transferred), the Registrar or Co-Registrar shall cancel such Global Securities
(or Global Security) and the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate new Global Securities of the types so canceled (or the type so
canceled and applicable type required to represent the interest as requested to
be transferred) reflecting the applicable increase and decrease of the principal
amount of Securities represented by such types of Global Securities, giving
effect to such transfer. If the applicable type of Global Security required to
represent the interest as requested to be transferred is not outstanding at the
time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Security of such type in principal amount equal to the
principal amount of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Security for
a Physical Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Physical Security; provided, however, that prior to the Registration, a
transferee that is a QIB or Institutional Accredited Investor may not
exchange a beneficial interest in Global Security for a Physical
Security. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
Person (subject to the previous sentence) having a beneficial interest
in a Global Security and upon receipt by the Trustee of a written order
or such other form of instructions as shall be reasonably acceptable to
the Trustee and as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the offer
and sale of
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which have not been registered under the Securities Act, the following
additional information and documents:
(A) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and,
at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit
D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal amount of
the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver
to the transferee a Physical Security in the appropriate principal
amount.
(ii) Securities issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar or co-Registrar
in writing. The Registrar or co-Registrar shall deliver such Physical
Securities to the Persons in whose names such Physical Securities are
so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private Placement
Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act; (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that the Company or any affiliate (as
defined in Rule 144 under the Securities Act) of the Company was the owner of
such Securities (or any predecessor thereto).
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(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
Each Holder of a Security agrees to indemnify the Company and
the Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Participants
or beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to
paragraph 5 or 6 of the Securities at the applicable redemption price set forth
thereon, it shall notify the Trustee in writing of the Redemption Date, the
principal amount of Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur. The Company shall give
such notice to the Trustee at least 60 days before the Redemption Date (unless a
shorter notice shall be agreed to by the Trustee in writing), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
In the event that less than all of the Securities are to be
redeemed at any time, selection of such Securities for redemption will be made
by the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed or, if such
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee in its sole discretion shall deem
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances; provided, however, that no
Securities of a principal amount of $1,000 or less shall be redeemed in part;
provided,
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further, that if a partial redemption is made with the proceeds of a Public
Equity Offering, selection of the Securities or portions thereof for redemption
shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata
basis as is practicable (subject to DTC procedures), unless such method is
otherwise prohibited. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Redemption.
Notice of redemption shall be mailed by the Company by
first-class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Securities to be redeemed at its registered address. If
any Security is to be redeemed in part only, the notice of redemption that
relates to such Security shall state the portion of the principal amount thereof
to be redeemed. A new Security in a principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Security. On and after the redemption date,
interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to this Indenture.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities called
for redemption ceases to accrue on and after the Redemption Date and
the only remaining right of the Holders is to receive payment of the
redemption price upon surrender to the Paying Agent;
(6) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after
the Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
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At the Company's request signed by an Officer of the Company,
the Trustee shall give the notice of redemption on behalf of the Company, in the
Company's name and at the Company's expense. In such event, the Company shall
provide the Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price stated in the notice, plus accrued
interest thereon, if any, to the Redemption Date, but interest installments
whose maturity is on or prior to such Redemption Date shall be payable to the
Holders of record at the close of business on the relevant Interest Record Date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date,
the Company shall deposit with the Paying Agent (or if the Company is Paying
Agent, shall, on or before the Redemption Date, segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest, if any, on
all Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of the Company to deposit with the Paying Agent money sufficient to
pay the redemption price thereof, the principal and accrued and unpaid interest,
if any, thereon shall, until paid or duly provided for, bear interest as
provided in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver at the
expense of the Company to the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall promptly pay the principal of and interest
on the Securities in the manner provided in the Securities and the Registration
Rights Agreement. An installment of principal or interest shall be considered
paid on the date due (including a redemption date) if the Trustee or Paying
Agent (other than the Company, a Guarantor or any of their respective
Affiliates) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such
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money to the Holders of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at
the same rate per annum borne by the Securities. The Company shall pay cash
interest on overdue installments of interest at the same rate per annum borne by
the Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the
City of New York, the office or agency required under Section 2.03. The Company
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
13. The Company hereby initially designates the Trustee at its address set forth
in Section 13.02 as their office or agency in The Borough of Manhattan, The City
of New York, for such purposes.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York, for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the office of United
States Trust Company of New York in the Borough of Manhattan, the City of New
York, as an agency of the Company in accordance with Section 2.03 (other than
for the service of notice and demands).
SECTION 4.03. Limitations on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates
(each an "Affiliate Transaction"), other than (x) Affiliate Transactions
permitted under paragraph (b) below and (y) Affiliate Transactions on terms that
are not materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length basis from
a Person that is not an Affiliate of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate Transactions
which are similar or part of a common plan) involving aggregate payments or
other property with a fair market value in excess of $1.0 million shall be
approved by the Board of Directors of the Company or such Restricted Subsidiary,
as the case may be, such approval to be evidenced by a Board Resolution stating
that such Board of Directors has determined that such transaction complies with
the foregoing provisions. If the Company or any Restricted Subsidiary of the
Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves an aggregate fair market
value of more than $10.0 million, the Company or such Restricted Subsidiary, as
the case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related transactions
to the
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Company or the relevant Restricted Subsidiary, as the case may be, from a
financial point of view, from an Independent Financial Advisor and file the same
with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply
to (i) reasonable fees and compensation paid to and indemnity provided on behalf
of officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions exclusively
between or among the Company and any of its Restricted Subsidiaries or
exclusively between or among such Restricted Subsidiaries, provided such
transactions are not otherwise prohibited by this Indenture; (iii) any agreement
as in effect as of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders in any material respect
than the original agreement as in effect on the Issue Date; (iv) Restricted
Payments permitted by Section 4.06 of this Indenture; (v) the existence of, or
the performance by the Company or any of its Restricted Subsidiaries of, its
obligations under the terms of, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party as of the Issue Date and any similar agreements which it may enter
into thereafter, provided, however, that the existence of, or the performance by
the Company or any of its Restricted Subsidiaries of obligations under, any
future amendment to any such existing agreement or under any similar agreement
entered into after the Issue Date shall only be permitted by this clause (v) to
the extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to the Holders of the Securities in any material
respect; (vi) transactions permitted by, and complying with, the provisions of
Section 5.01 of this Indenture; (vii) the Recapitalization and the transactions
contemplated by the Recapitalization Agreement; (viii) any employment agreement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business and consistent with the past practice of the Company
or such Restricted Subsidiary; and (ix) transactions with customers,
franchisees, clients, suppliers, joint venture partners or purchasers or sellers
of goods or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture agreements) and
otherwise in compliance with the terms of this Indenture, which are fair to the
Company or its Restricted Subsidiaries, in the reasonable determination of the
Board of Directors of the Company or the senior management thereof, or are on
terms at least as favorable as might reasonably have been obtained at such time
from an unaffiliated party.
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect to,
or otherwise become responsible for payment of (collectively, "incur") any
Indebtedness (other than Permitted Indebtedness); provided, however, that if no
Default or Event of Default shall have occurred and be continuing at the time of
or as a consequence of the incurrence of any such Indebtedness, the Company or
any Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) and Restricted Subsidiaries of the Company which are not
Guarantors may incur Acquired Indebtedness, in each case if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0
to 1.0.
The Company will not, and will not permit any Guarantor to,
incur any Indebtedness that is contractually subordinated in right of payment to
any other Indebtedness of the Company or a
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Guarantor, as the case may be, unless such Indebtedness is also contractually
subordinated in right of payment to the Securities or the Guarantee of such
Guarantor, as the case may be, on substantially identical terms; provided,
however, that no Indebtedness of the Company or a Guarantor shall be deemed to
be contractually subordinated in right of payment to any other Indebtedness of
the Company or such Guarantor, as the case may be, solely by virtue of being
unsecured.
SECTION 4.05. Limitation on Asset Sales.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
the applicable Restricted Subsidiary, as the case may be, receives consideration
at the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the
Company's Board of Directors); (ii) at least 75% of the consideration received
by the Company or the Restricted Subsidiary, as the case may be, from such Asset
Sale shall be in the form of cash or Cash Equivalents and is received at the
time of such disposition provided that the amount of (x) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet), of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the
Securities or any Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability and (y) any securities, notes
or other obligations received by the Company or any such Restricted Subsidiary
from such transferee that are immediately converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this Section 4.05; and (iii) upon the
consummation of an Asset Sale, the Company shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either (A) to prepay any Indebtedness secured by
assets subject to such Asset Sale (and, in the case of any such Indebtedness
under any revolving credit facility, including the New Revolving Credit
Facility, effect a permanent reduction in the availability under such revolving
credit facility), (B) to make an investment in properties and assets that
replace the properties and assets that were the subject of such Asset Sale or in
properties and assets of a kind used or usable in the business of the Company
and its Restricted Subsidiaries as conducted in accordance with Section 4.15 of
this Indenture or to acquire Capital Stock of any Person which upon such
acquisition becomes a Restricted Subsidiary and which conducts business in
accordance with Section 4.15 of this Indenture ("Replacement Assets"), or (C) a
combination of prepayment and investment permitted by the foregoing clauses
(iii)(A) and (iii)(B). On the 366th day after an Asset Sale or such earlier
date, if any, as the Board of Directors of the Company or of such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next
preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate
amount of Net Cash Proceeds which have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and
(iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Amount")
shall be applied by the Company or such Restricted Subsidiary to make an Offer
to Purchase on the Purchase Date not less than 30 nor more than 60 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders on a
pro rata basis, that amount of Securities equal to the Net Proceeds Offer Amount
at a price equal to 100% of the principal amount of the Securities to be
purchased, plus accrued and unpaid interest thereon, if any, to the Purchase
Date; provided, however, that if at any time any non-cash consideration received
by the Company or any Restricted Subsidiary of the Company, as the case may be,
in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed
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to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.05. The Company may defer the Offer to
Purchase until there is an aggregate unutilized Net Proceeds Offer Amount equal
to or in excess of $5.0 million resulting from one or more Asset Sales (at which
time, the entire unutilized Net Proceeds Offer Amount, and not just the amount
in excess of $5.0 million, shall be applied as required pursuant to this
paragraph) and, upon such application, the Net Proceeds Offer Amount shall be
reset at zero.
Notwithstanding the immediately preceding paragraph, the
Company and the Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with the prior paragraph if (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets or other property sold, issued or otherwise disposed of (as evidenced by
a resolution of the Company's Board of Directors) and (ii) at least 75% of the
consideration for such Asset Sale constitutes Capital Stock of a Person which,
upon acquisition, becomes a Restricted Subsidiary and which is in a business of
the type described in Section 4.15 of this Indenture, long-term assets used or
useful in such business and/or cash or Cash Equivalents; provided that any cash
or Cash Equivalents received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall be added to the Net Proceeds Offer Amount.
In the event of the transfer of substantially all (but not
all) of the property and assets of the Company and its Restricted Subsidiaries
as an entirety to a Person in a transaction permitted under Section 5.01 of this
Indenture, the successor corporation shall be deemed to have sold the properties
and assets of the Company and its Restricted Subsidiaries not so transferred for
purposes of this Section 4.05, and shall comply with the provisions of this
Section 4.05 with respect to such deemed sale as if it were an Asset Sale. In
addition, the fair market value of such properties and assets of the Company or
its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this Section 4.05.
Each Offer to Purchase will be promptly mailed to the record
Holders as shown on the register of Holders, and in any event, within 25 days
following the Net Proceeds Offer Trigger Date (or if the Offer to Purchase has
been deferred as described in the first paragraph of this Section 4.05, the date
that the aggregate unutilized Net Proceeds Offer Amount equals or exceeds $5.0
million), with a copy to the Trustee and shall comply with the procedures set
forth in this Indenture applicable to an Offer to Purchase. Upon receiving
notice of the Offer to Purchase, Holders may elect to tender their Securities in
whole or in part in integral multiples of $1,000 in exchange for cash. To the
extent Holders properly tender Securities in an amount exceeding the Net
Proceeds Offer Amount, Securities of tendering Holders will be purchased on a
pro rata basis (based on amounts tendered). An Offer to Purchase shall remain
open for a period of at least 20 and not more than 30 business days or such
longer period as may be required by law. To the extent that the aggregate amount
of Securities tendered pursuant to the Offer to Purchase is less than the Net
Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer
Amount for general corporate purposes. Upon completion of any such Offer to
Purchase, the Net Proceeds Offer Amount shall be reset at zero.
Not later than the date upon which written notice of an Offer
to Purchase is delivered to the Trustee as provided below, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the Net Proceeds Offer
Amount, (ii) the allocation of the Net Cash Proceeds from the Asset Sale
pursuant to which such Offer to Purchase is being made and (iii) the compliance
of such allocation with the provisions of this Section 4.05. On such date, the
Company shall also irrevocably deposit with the
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Paying Agent (or, if the Company is acting as its own paying agent, segregate
and hold in trust) in Cash Equivalents, maturing on the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by open
of business, an amount equal to the Net Proceeds Offer Amount to be held for
payment in accordance with the provisions of this Section 4.05. Upon the
expiration of the period for which the Offer to Purchase remains open, the
Company shall deliver, or cause to be delivered, to the Trustee for cancellation
the Securities or portions thereof which have been properly tendered to and are
to be accepted by the Company. The Paying Agent shall, on the Purchase Date,
mail or deliver payment to each tendering Holder in the amount of the Purchase
Price. In the event that the aggregate Purchase Price of the Securities
delivered, or caused to be delivered, by the Company to the Trustee is less than
the Net Proceeds Offer Amount applicable to the Securities, the Paying Agent
shall deliver the excess to the Company immediately after the expiration of the
period for which the Offer to Purchase remains open for application in
accordance with this Section 4.05.
At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.05. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
The Company will comply with the requirements of Rule l4e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to an Offer to Purchase. To the extent that
the provisions of any securities laws or regulations conflict with the "Asset
Sale" provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the "Asset Sale" provisions of this Indenture by virtue
thereof.
SECTION 4.06. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company's
Capital Stock to holders of such Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any required
payment, any Indebtedness of the Company or a Guarantor that is subordinate or
junior in right of payment to the Securities or the Guarantee of such Guarantor
or (d) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to
as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the Company is not able to incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.04 of this Indenture or (iii) the aggregate amount of
Restricted Payments (including such proposed Restricted Payment) made subsequent
to the Issue Date (the amount expended for such purposes, if other than in cash,
being the fair market value of such property as determined reasonably and in
good faith by the Board of Directors of the Company) shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss) of the Company earned
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subsequent to March 29, 1998 and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net proceeds (including the fair market
value of property other than cash (determined in good faith by the Board of
Directors)) received by the Company from any Person (other than a Subsidiary of
the Company) as a contribution to the common equity capital of the Company or
from the issuance and sale of Qualified Capital Stock of the Company or from the
issue or sale of Disqualified Capital Stock of the Company or Indebtedness of
the Company that has been converted into Qualified Capital Stock of the Company,
in each case subsequent to the Issue Date and on or prior to the Reference Date;
plus (y) without duplication of any amounts included in clause (iii) (x) above,
100% of the aggregate net proceeds (including the fair market value of property
other than cash (determined in good faith by the Board of Directors)) of any
equity contribution received by the Company from a holder of the Company's
Capital Stock (excluding, in the case of clauses (iii) (x) and (y), any net cash
proceeds from a Public Equity Offering or Strategic Equity Investment to the
extent used to redeem the Securities in accordance with Article Three of this
Indenture; plus (z) without duplication, the sum of (1) the aggregate amount
returned (including the fair market value of property other than cash
(determined in good faith by the Board of Directors)) on or with respect to
Investments (other than Permitted Investments) made subsequent to the Issue Date
whether through interest payments, principal payments, dividends or other
distributions or payments, (2) the net cash proceeds received by the Company or
any of its Restricted Subsidiaries from the disposition of all or any portion of
such Investments (other than to a Subsidiary of the Company) and (3) upon
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair
market value of such Subsidiary; provided, however, that the sum of clauses (1),
(2) and (3) above shall not exceed the aggregate amount of all such Investments
made subsequent to the Issue Date.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
or the consummation of any irrevocable redemption within 60 days after the date
of declaration of such dividend or notice of such redemption if the dividend or
the payment of the redemption price, as the case may be, would have been
permitted on the date of declaration or notice; (2) if no Default or Event of
Default shall have occurred and be continuing, the acquisition of any shares of
Capital Stock of the Company, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the Company; (3) if no
Default or Event of Default shall have occurred and be continuing, the
acquisition of any Indebtedness of the Company or a Guarantor that is
subordinate or junior in right of payment to the Securities or a Guarantee
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company, or (ii) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company) of (A)
shares of Qualified Capital Stock of the Company or (B) Refinancing
Indebtedness; (4) payments for the purpose of and in an amount equal to the
amount required to permit the Company to redeem or repurchase its equity or
options in respect thereof, in each case in connection with the terms of any
employee stock option or stock purchase agreements or other agreements to
compensate management or other employees; provided that such redemptions or
repurchases pursuant to this clause (4) shall not exceed $5.0 million (which
amount shall be increased by the amount of any net cash proceeds to the Company
from (x) sales of Capital Stock of the Company to management or other employees
subsequent to the Issue Date to the extent such amounts have not been included
in clause (iii) in the foregoing paragraph and (y) any "key-man" life insurance
policies which are used to make such redemptions or repurchases) in the
aggregate; provided, further, that the cancellation of Indebtedness owing to the
Company from management or other employees of the Company or any of its
Restricted Subsidiaries in connection
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with a repurchase of Capital Stock of the Company will not be deemed to
constitute a Restricted Payment under this Indenture; (5) repurchases of Capital
Stock deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price thereof; (6) so long as no Default or
Event of Default shall have occurred and be continuing, payments not to exceed
$500,000 in the aggregate to enable the Company to make payments to holders of
its Capital Stock in lieu of issuance of fractional shares of its Capital Stock;
(7) payments or other distributions made in connection with the
Recapitalization; (8) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Common Stock on a pro rata basis; (9) the
making of distributions, loans or advances to Holdings in an amount not to
exceed $300,000 per annum in order to permit Holdings to pay required and
ordinary operating expenses of Holdings (including, without limitation,
directors' fees, indemnification obligations, professional fees and expenses);
(10) distributions to Holdings to fund the required tax obligations of Holdings
related to income generated by the Company and its Restricted Subsidiaries and
taxable to Holdings; and (11) if no Default or Event of Default shall have
occurred and be continuing, other Restricted Payments in an aggregate amount not
to exceed $3.0 million. In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii) of
the immediately preceding paragraph, (a) amounts expended pursuant to clauses
(1), (2), 3(i), 3(ii)(A), (4), (8) and (11) shall be included in such
calculation; provided that such expenditures pursuant to clause (4) shall not be
included to the extent of cash proceeds received by the Company from any
"key-man" life insurance policies and (b) amounts expended pursuant to clauses
(3)(ii)(B), (5), (6), (7), (9), and (10) shall be excluded from such
calculation.
As of the Issue Date, all of the Company's Subsidiaries will
be Restricted Subsidiaries. The Company will not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the second to
last sentence of the definition of "Unrestricted Subsidiary." For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated will be deemed to be
Restricted Payments in an amount determined as set forth in the last sentence of
the definition of "Investments." Such designation will only be permitted if a
Restricted Payment in such amount would be permitted at such time (whether
pursuant to the first paragraph of this covenant or under clause (vii), (xi) or
(xii)) and if such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause
to be done all things necessary to preserve and keep in full force and effect
its existence as a corporation, partnership or other entity.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary or upon the income, profits or property of the Company or
any Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim
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whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any
of its Subsidiaries is declared due and payable before its maturity because of
the occurrence of any default (or any event which, with notice or lapse of time,
or both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default,
the Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) Subject to Article Five, the Company shall cause all
material properties owned by or leased to it or any Restricted Subsidiary and
used or useful in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in normal condition, repair and working
order and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section 4.10 shall prevent
the Company or any Restricted Subsidiary from discontinuing the use, operation
or maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of the
Company or the Restricted Subsidiary concerned, or of an Officer (or other agent
employed by the Company or of any Restricted Subsidiary) of the Company or such
Restricted Subsidiary having managerial responsibility for any such property,
desirable in the conduct of the business of the Company or any Restricted
Subsidiary, as in the judgment of the Company may be necessary.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions as in the judgment of the Company may be necessary.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 45 days after
the end of each of the first three fiscal quarters of the Company and within 90
days after the close of each fiscal year a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
quarter or fiscal year. If they do know of such a Default or Event of Default,
the certificate shall describe all such Defaults or Events of Default, their
status and the action the Company is taking or proposes to take with respect
thereto. The Company also shall comply with TIA Section 314(a)(4). The first
certificate to be delivered by the Company pursuant to this Section 4.11 shall
be
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for the period commencing July 1, 1998 and ending September 30, 1998.
SECTION 4.12. Reports to Holders.
The Company will deliver to the Trustee within 15 days after
the filing of the same with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, following the
effectiveness of the Exchange Offer Registration Statement, the Company will
file with the Commission, to the extent permitted, and provide the Trustee and
Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the other provisions of TIA Section 314(a). Prior to the
effectiveness of the Exchange Offer Registration Statement, the Company will
provide upon request from Holders of the Securities or prospective holders the
information required by Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law, which would prohibit or
forgive the Company, or such Guarantor from paying all or any portion of the
principal of and/or interest, if any, on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company and each Guarantor hereby expressly waive all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.14. Change of Control.
(a) Upon the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 30 days after the Change of Control Date, make
an Offer to Purchase all Securities then outstanding at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the Purchase Date (subject to the right of Holders of record
on the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date). The Company's obligations may be satisfied if a third
party makes the Offer to Purchase in the manner, at the times and otherwise in
compliance with the requirements of this Indenture applicable to an Offer to
Purchase made by the Company and purchases all Securities validly tendered and
not withdrawn under such Offer to Purchase. Each Holder shall be entitled to
tender all or any portion of the Securities owned by such Holder pursuant to
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the Offer to Purchase, subject to the requirement that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal amount.
(b) Prior to the mailing of the notice referred to in clause
(a) above, but in any event within 30 days following any Change of Control, the
Company covenants to (i) repay in full and terminate all commitments under
Indebtedness under the New Revolving Credit Facility and all other Indebtedness
of the Company's Restricted Subsidiaries the terms of which require repayment
upon a Change of Control or offer to repay in full and terminate all commitments
under all Indebtedness under the New Revolving Credit Facility and all other
such Indebtedness of the Company's Restricted Subsidiaries and to repay the
Indebtedness owed to each lender which has accepted such offer or (ii) obtain
the requisite consents under the New Revolving Credit Facility and all other
Indebtedness of the Company's Restricted Subsidiaries to permit the repurchase
of the Securities pursuant to the Offer to Purchase. The Company shall first
comply with the covenant in the immediately preceding sentence before they shall
be required to repurchase Securities pursuant to the Offer to Purchase. The
Company's failure to comply with the covenant described in the second preceding
sentence or in clause (a) above shall constitute an Event of Default described
in clause (iii) (and not in clause (ii)) of Section 6.01.
(c) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or deliver to Holders of Securities so accepted,
payment in an amount equal to the Purchase Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to each Holder of
Securities a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Offer on or as soon as practicable after the Purchase Date.
(d) If the Company make an Offer to Purchase, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed, and any violation of the provisions of this Indenture relating to such
Offer to Purchase occurring as a result of such compliance shall not be deemed a
Default or an Event of Default.
SECTION 4.15. Conduct of Business.
The Company and its Restricted Subsidiaries will not engage in
any businesses which are not the same, similar, reasonably related, ancillary or
complementary to the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
SECTION 4.16. Limitations on Dividend and Other Payment Restrictions Affecting
Subsidiaries.
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The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to (a) pay dividends or
make any other distributions on or in respect of its Capital Stock; (b) make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or (c) transfer any
of its property or assets to the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture, the Securities and the New
Revolving Credit Facility; (3) non-assignment provisions of any contract or any
lease; (4) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired; (5) agreements existing on the Issue Date to the extent and in the
manner such agreements are in effect on the Issue Date; (6) restrictions on the
transfer of assets subject to any Lien permitted under this Indenture imposed by
the holder of such Lien; (7) restrictions imposed by any agreement to sell
assets or Capital Stock permitted under this Indenture to any Person pending the
closing of such sale; (8) any agreement or instrument governing Capital Stock of
any Person that is acquired; (9) other Indebtedness permitted to be incurred
subsequent to the Issue Date pursuant to the provisions of Section 4.04 of this
Indenture; provided that any such restrictions are ordinary and customary with
respect to the type of Indebtedness being incurred (under the relevant
circumstances); and provided, further that after giving effect to any such
encumbrance or restriction, the Company would be able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.04 of this Indenture; (10) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business; (11) Purchase Money Indebtedness for property acquired that impose
restrictions of the nature described in clause (c) above on the property so
acquired; (12) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and (13) any encumbrances or
restrictions imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (2) through (12)
above; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company's Board of Directors, no more restrictive
with respect to such dividend and other payment restrictions than those
contained in the dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries
(other than Guarantors) to issue any preferred stock (other than to the Company
or to a Wholly Owned Restricted Subsidiary of the Company) or permit any Person
(other than the Company or a Wholly Owned Restricted Subsidiary of the Company)
to own any preferred stock of any Restricted Subsidiary of the Company which is
not a Guarantor.
SECTION 4.18. Limitation on Liens.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on
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the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Securities or a Guarantee, the
Securities or such Guarantee, as the case may be, are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens and (ii)
in all other cases, the Securities are equally and ratably secured, except for
(A) Liens existing as of the Issue Date and any extensions, renewals or
replacements thereof; (B) Liens of the Company or a Wholly Owned Restricted
Subsidiary of the Company on assets of any Restricted Subsidiary of the Company;
(C) Liens securing the Securities or a Guarantee; (D) Liens securing Refinancing
Indebtedness which is incurred to Refinance any Indebtedness which has been
secured by a Lien permitted under this Indenture and which has been incurred in
accordance with the provisions of this Indenture; provided, however, that such
Liens (i) are no less favorable to the Holders and are not more favorable to the
lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced and (ii) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced; and (E) Permitted Liens.
SECTION 4.19. Issuance of Subsidiary Guarantees.
If (a) any Domestic Wholly Owned Restricted Subsidiary incurs
any Indebtedness (other than Indebtedness owing to the Company or a Restricted
Subsidiary) or (b) any Restricted Subsidiary (whether or not a Domestic Wholly
Owned Restricted Subsidiary) guarantees any Indebtedness (other than
Indebtedness owing to the Company or a Restricted Subsidiary) of the Company or
any Restricted Subsidiary then, in either case, the Company shall cause such
Domestic Wholly Owned Restricted Subsidiary or Restricted Subsidiary, as the
case may be, to (i) execute and deliver to the Trustee a supplemental indenture
in form reasonably satisfactory to the Trustee pursuant to which such Domestic
Wholly Owned Restricted Subsidiary or Restricted Subsidiary, as the case may be,
shall unconditionally guarantee (each, a "Guarantee") all of the Company's
obligations under the Securities and this Indenture on the terms set forth in
this Indenture and (ii) deliver to the Trustee an Opinion of Counsel (which may
contain customary exceptions) that such supplemental indenture has been duly
authorized, executed and delivered by such Domestic Wholly Owned Restricted
Subsidiary or Restricted Subsidiary, as the case may be, and constitutes a
legal, valid, binding and enforceable obligation of such Domestic Wholly Owned
Restricted Subsidiary or Restricted Subsidiary, as the case may be. Thereafter,
such Domestic Wholly Owned Restricted Subsidiary or Restricted Subsidiary, as
the case may be, shall be a Guarantor for all purposes of this Indenture. The
Company may cause any other Restricted Subsidiary of the Company to issue a
Guarantee and become a Guarantor.
SECTION 4.20. Payments for Consents.
The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Securities for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Indenture, the Securities or the
Guarantees unless such consideration is offered to be paid to all Holders of the
Securities who so consent, waive or agree to amend in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement.
SECTION 4.21. Further Instruments and Acts.
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Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE FIVE
MERGERS; SUCCESSORS
SECTION 5.01. Mergers, Consolidation and Sale of Assets.
The Company will not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless: (i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be
a corporation organized and validly existing under the laws of the United States
or any State thereof or the District of Columbia and (y) shall expressly assume,
by supplemental indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on all of the Securities and the
performance of every covenant of the Securities, this Indenture and the Senior
Registration Rights Agreement on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company or
such Surviving Entity, as the case may be, shall be able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.04 of this Indenture; (iii) immediately before and immediately after
giving effect to such transaction and the assumption contemplated by clause
(i)(2)(y) above (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred
and any Lien granted in connection with or in respect of the transaction), no
Default or Event of Default shall have occurred or be continuing; and (iv) the
Company or the Surviving Entity shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied. Notwithstanding clause (ii) of the preceding
sentence, (a) any Restricted Subsidiary of the Company may consolidate with,
merge into or transfer all or part of its properties and assets to the Company
and (b) the Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another jurisdiction.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one
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or more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
Upon any consolidation, combination or merger or any transfer
of all or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if such surviving
entity had been named as such.
No Guarantor (other than any Guarantor whose Guarantee is to
be released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with Section 4.05 of this Indenture)
will, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or any other
Guarantor unless: (i) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) is a corporation organized and existing
under the laws of the United States or any State thereof or the District of
Columbia; (ii) such entity assumes by supplemental indenture all of the
obligations of the Guarantor under this Indenture, such Guarantor's Guarantee
and the Registration Rights Agreement; (iii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company could satisfy
the provisions of clause (ii) of the first paragraph of this Section 5.01; and
(v) the Company shall have delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, each stating that such consolidation or merger and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
SECTION 5.02. Successor Substituted.
In the event of any transaction (other than a lease) described
in and complying with the conditions listed in Section 5.01 in which the Company
or a Guarantor, as the case may be, is not the successor Company or successor
Guarantor, as the case may be, and the successor Company or successor Guarantor,
as the case may be, is to assume all the Obligations of the Company under the
Securities, this Indenture and the Registration Rights Agreement or of such
Guarantor under its Guarantee, this Indenture and the Registration Rights
Agreement, as the case may be, pursuant to a supplemental indenture, such
successor Company or successor Guarantor, as the case may be, shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or such Guarantor, as the case may be, and the Company shall be discharged and
released from its Obligations under this Indenture and the Securities or such
Guarantor shall be discharged from its Obligations under this Indenture and its
Guarantee, as the case may be.
ARTICLE SIX
DEFAULT AND REMEDIES
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SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for
purposes of this Indenture:
(i) the failure to pay interest on any Securities when the
same becomes due and payable and the default continues for a period of
30 days;
(ii) the failure to pay the principal on any Securities, when
such principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase
Securities tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer);
(iii) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Securities (except in the case of a
default with respect to Section 5.01 of this Indenture, which will
constitute an Event of Default with such notice requirement but without
such passage of time requirement);
(iv) the failure to pay at final stated maturity (giving
effect to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness for borrowed money of the Company
or any Restricted Subsidiary of the Company and such failure continues
for a period of 20 days or more, or the acceleration of the final
stated maturity of any such Indebtedness (which acceleration is not
rescinded, annulled or otherwise cured within 20 days of receipt by the
Company or such Restricted Subsidiary of notice of any such
acceleration) if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final stated maturity or which
has been accelerated, in each case with respect to which the 20-day
period described above has passed, aggregates $5.0 million or more at
any time;
(v) one or more judgments for the payment of money in an
aggregate amount in excess of $5.0 million shall have been rendered
against the Company or any of its Restricted Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 60
days after such judgment or judgments become final and non-appealable;
(vi) a court of competent jurisdiction enters a judgment,
decree or order for relief in respect of the Company or any Significant
Subsidiary of the Company in an involuntary case or proceeding under
any Bankruptcy Law, which shall (A) approve as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
in respect of the Company or any Significant Subsidiary of the Company,
(B) appoint a Custodian of the Company or any Significant Subsidiary of
the Company for all or substantially all of its property or (C) order
the winding-up or liquidation of its affairs; and such judgment, decree
or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(vii) any Guarantee ceases to be in full force and effect or
any Guarantee declared to be null and void and unenforceable or any
Guarantee is found to be invalid or any of the Guarantors denies its
liability under its Guarantee (other than by reason of release of a
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Guarantor in accordance with the terms of this Indenture).
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (iv) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (v),
(vi) or (vii), its status and what action the Company is taking or proposes to
take with respect thereto.
The Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to the Trustee by
the Company, the Paying Agent or any Holder.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in clause (vi) of Section 6.01 with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Securities may declare the principal of and accrued
interest on all the Securities to be due and payable by notice in writing to the
Company and the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration", and the same shall become immediately due and
payable. If an Event of Default specified in clause (vi) of Section 6.01 occurs
with respect to the Company and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect
to the Securities as described in the preceding paragraph, the Holders of a
majority in principal amount of the outstanding Securities may, on behalf of the
Holders of all of the Securities, rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
clause (vi) of Section 6.01, the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
The Holders of a majority in principal amount of the
Securities may by notice to the Trustee waive any existing Default or Event of
Default under this Indenture, and its consequences, except a default in the
payment of the principal of or interest on any Securities.
Holders of the Securities may not enforce this Indenture or
the Securities except as
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provided in this Indenture and under the TIA. Subject to the provisions of this
Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under this Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. Subject to all provisions of this
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the then outstanding Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee.
Under this Indenture, the Company is required to provide an
Officers' Certificate to the Trustee promptly upon any such officer obtaining
knowledge of any Default or Event of Default (provided that such officers shall
provide such certification at least annually whether or not they know of any
Default or Event of Default) that has occurred and, if applicable, describe such
Default or Event of Default and the status thereof.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (i) and (ii) of Section 6.01 or a Default in
respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
10.02. The Company shall deliver to the Trustee an Officers' Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
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Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of another Holder, or
that may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee
a direction which, in the opinion of the Trustee, is inconsistent with
the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and premium, if any or
interest on a Security, on or after the respective due dates expressed in the
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(i) or (ii) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest remaining unpaid, together with interest overdue on
principal and to the
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extent that payment of such interest is lawful, interest on overdue installments
of interest, in each case at the rate per annum borne by the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), their respective creditors or their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding except that the
Trustee may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions. To the extent that the
payment of any such amount due to the Trustee under Section 7.07 out of the
estate in any such proceeding shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Securities may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Holders pursuant to this
Section 6.10. At least 15 days before such record date, the Company shall mail
to each Holder and the Trustee a notice that states the record date, the payment
date and the amounts to be paid.
SECTION 6.11. Undertaking for Costs.
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In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 shall not apply to a suit by the Trustee,
a suit by a Holder or group of Holders of more than 10% in aggregate principal
amount of the outstanding Securities, or to any suit instituted by any Holder
for the enforcement or the payment of the principal or interest on any
Securities on or after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; however, in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.02, 6.04 or 6.05.
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(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) The Trustee, in its capacity as Trustee, Registrar or
Paying Agent, shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the losses, costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely conclusively on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which shall
conform to the provisions of Section 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of any
agent or attorney (other than an agent who is an employee of the Trustee)
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and
the advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in
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respect of any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or a Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the Securities
and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
their respective Affiliates with the same rights it would have if it were not
Trustee, subject to Section 7.10 hereof. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee knows of such Defaults or Events of Default, the Trustee shall
mail to each Holder notice of the Default or Event of Default within 90 days
after the occurrence thereof. Except in the case of a Default or an Event of
Default in payment of principal of or interest on any Security or a Default or
Event of Default in complying with Section 5.01, the Trustee may withhold the
notice if and so long as a committee of its
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Trust Officers in good faith determines that withholding the notice is in the
interest of the Holders. This Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso to Section 315(b) of the TIA is
hereby expressly excluded from this Indenture and the Securities, as permitted
by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder a report dated as of such May 15 that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b),
(c) and (d).
A copy of each such report at the time of its mailing to
Holders shall be filed with the SEC and each stock exchange, if any, on which
the Securities are listed.
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses,
disbursements, expenses and advances (including fees, disbursements and expenses
of its agents and counsel) incurred or made by it, including costs of
collection, in addition to the compensation for its services except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or bad faith. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee, Paying Agent and
Registrar for, and hold it harmless against any and all loss, damage, claims,
liability or expense, including taxes (other than franchise taxes imposed on the
Trustee and taxes based upon, measured by or determined by the income of the
Trustee) and attorneys' fees, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent that such loss, damage, claim, liability or
expense is due to its own negligence or bad faith. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. However, the failure by the Trustee to so notify the Company shall
not relieve the Company of their obligations hereunder. The Company shall defend
the claim and the Trustee shall cooperate in the defense (and may employ its own
counsel) at the Company's expense; provided, however, that the Company's
reimbursement obligation with respect to counsel employed by the Trustee will be
limited to the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its
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capacity as Trustee, except money or property held in trust to pay principal of
or interest on particular Securities or the Purchase Price or redemption price
of any Securities to be purchased pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(vii) or (viii) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company
in writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under
any Bankruptcy Law;
(c) a custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder
may petition any court of
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competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1), 310(a)(2) and
310(a)(5). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. If the Trustee has or shall acquire any "conflicting interest" within
the meaning of TIA Section 310(b), the Trustee and the Company shall comply with
the provisions of TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, the Trustee shall resign immediately in the manner and with the effect
hereinbefore specified in this Article Seven. Nothing herein shall be deemed to
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE EIGHT
[INTENTIONALLY OMITTED]
ARTICLE NINE
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DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Termination of Company's Obligations.
The Company may terminate its obligations under the Securities and
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 9.01, if all Securities previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment U.S. Legal Tender or
non-callable United States Government Obligations, or a combination thereof, has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 9.05) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, U.S. Legal Tender or
non-callable United States Government Obligations, or a combination
thereof, in such amount as is sufficient without consideration of
reinvestment of such interest, to pay principal and interest on the
outstanding Securities to maturity or redemption, as well as the
Trustee's fees and expenses; provided that the Trustee shall have been
irrevocably instructed to apply such U.S. Legal Tender to the payment
of said principal and interest with respect to the Securities;
provided, further, that no deposits made pursuant to this Section
9.01(b) shall cause the Trustee to have a conflicting interest as
defined in and for the purposes of the TIA; and provided, further,
that, as confirmed by an Opinion of Counsel, no such deposit shall
result in the Company, the Trustee or the trust becoming or being
deemed to be an "investment company" under the Investment Company Act
of 1940;
(c) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other material instrument to which the Company is a
party or by which it is bound (other than a Default or Event of Default
resulting from the incurrence of Indebtedness, all or a portion of
which will be used to defease the Securities concurrently with such
incurrence);
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Company's
obligations under the Securities and this Indenture have been complied
with. Such Opinion of Counsel shall also state that such satisfaction
and discharge
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does not result in a default under the New Revolving Credit Facility
(if then in effect) or any other agreement or instrument then known to
such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 7.08 and
in this Article Nine shall survive until the Securities are no longer
outstanding pursuant to the last paragraph of Section 2.08. After the Securities
are no longer outstanding, the Company's obligations in Sections 7.07, 7.08,
9.05 and 9.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under the Securities and this Indenture except for those surviving obligations
specified above.
SECTION 9.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, elect to have either paragraph
(b) or (c) below be applied to all outstanding Securities upon compliance with
the conditions set forth in Section 9.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 9.04 hereof and the other Sections of this
Indenture referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in Section 9.04 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on the
Securities when such payments are due, (ii) the Company's obligations with
respect to the Securities concerning issuing temporary Securities, registration
of Securities, mutilated, destroyed, lost or stolen Securities and the
maintenance of an office or agency for payments under Article Two and Section
4.02 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (iv)
the Legal Defeasance provisions of this Article Nine. Subject to compliance with
this Article Nine, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03 hereof, be released
from its obligations under the covenants contained in Sections 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.10, 4.12, 4.14, 4.15, 4.16, 4.17 and 4.18 and Article Five
hereof and any Event of Default specified in Section 6.01 (iii), (iv) or (v)
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection
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with such covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
or Default under Section 6.01 (vi) hereof, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby. In
addition, upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), subject to the satisfaction of the conditions
set forth in Section 9.03 hereof, those events described under Section 6.01
(except those events described in Section 6.01 (i), (ii), (vi) and (vii)) will
no longer constitute an Event of Default with respect to the Securities.
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 9.02 (b) or 9.02 (c) hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders cash in U.S. dollars,
non-callable United States Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the Securities on
the stated date for payment thereof or on the applicable redemption
date, as the case may be and irrevocably instructs the Trustee to apply
such money or the proceeds of such United States Government Obligations
to the payment of such principal and interest;
(ii) in the case of an election under Section 9.02 (b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(iii) in the case of an election under Section 9.02 (c) hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of
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such deposit (other than a Default or Event of Default under this
Indenture resulting from the incurrence of Indebtedness, all or a
portion of which will be used to defease the Securities pursuant to
this Article Nine concurrently with such incurrence);
(v) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with; and
(viii) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that assuming no intervening bankruptcy or
insolvency of the Company between the date of deposit and the 91st day
following the date of deposit and that no Holder is an insider of the
Company, after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) above with respect to a Legal Defeasance need not be delivered if
all Securities not theretofore delivered to the Trustee for cancellation (x)
have become due and payable, (y) will become due and payable on the maturity
date within one year or (z) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12, 2.13 and 4.01, 4.02,
7.07, 7.08, 9.04 and 9.06 shall survive until the Securities are no longer
outstanding. Thereafter the Company's obligations in Sections 7.07, 9.05 and
9.06 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
SECTION 9.04. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities. The Trustee shall be under no obligation to invest
such
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money or United States Government Obligations, except as it may agree in writing
with the Company.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 9.04 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
Anything in this Article Nine to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or United States Government Obligations held by it
as provided in Section 9.03 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 9.05. Repayment to the Company.
Subject to Sections 7.07, 9.01, 9.02 and 9.03, the Trustee shall
promptly pay to the Company upon written request any excess money held by it at
any time. The Trustee shall pay to the Company upon written request any money
held by it for the payment of principal or interest that remains unclaimed for
two years; provided, however, that the Company shall, if requested by the
Trustee or the Paying Agent, give the Trustee or such Paying Agent
indemnification reasonably satisfactory to it against any and all liability
which may be incurred by it by reason of such payment and provided, further,
that the Trustee before being required to make any payment may at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York or mail to each Holder entitled to such money notice that
such money remains unclaimed and that, after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining shall be repaid to the Company.
After payment to the Company, Holders entitled to money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
United States Government Obligations in accordance with Section 9.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 9.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money or United States Government Obligations in accordance with
Section 9.01; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee or Paying Agent.
ARTICLE TEN
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AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and each Guarantor, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect
the rights of any Holder;
(b) to evidence the succession of another Person to the Company
and/or to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit
or rights to the Holders;
(f) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(g) to evidence the succession of another Person to any Guarantor
and the assumption by any such successor of the covenants of such
Guarantor herein and in the Guarantee in connection with any
transaction complying with Article Five of this Indenture;
(h) to add to the covenants of the Company or a Guarantor for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or any Guarantor;
(i) to secure the Securities pursuant to the requirements of
Section 4.18 or otherwise; or
(j) to reflect the release of a Guarantor from its obligations
with respect to its Guarantee or to add a Guarantor, in each case
pursuant to the requirements of Section 4.19;
provided, however, that the Company delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
After an amendment or supplement under this Section becomes
effective, the Company shall mail to Holders a notice briefly describing such
amendment or supplement. The failure to give such notice to all Holders, or any
defect therein, shall not impair or affect the validity of an
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amendment or supplement under this Section.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of the
then outstanding Securities. Subject to Section 6.07, the Holders of a majority
in principal amount of then outstanding Securities may waive compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities.
However, without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(a) reduce the amount of Securities whose Holders must consent to
an amendment;
(b) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Securities;
(c) reduce the principal of or change or have the effect of
changing the fixed maturity of any Securities, or change the date on
which any Securities may be subject to redemption or repurchase, or
reduce the redemption or repurchase price therefor;
(d) make any Securities payable in money other than that stated in
the Securities;
(e) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
each Security on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal
amount of Securities to waive Defaults or Events of Default;
(f) amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate a Net Proceeds
Offer with respect to any Asset Sale that has been consummated or
modify any of the provisions or definitions with respect thereto after
a Change of Control has occurred or the subject Asset Sale has been
consummated;
(g) modify or change any provision of this Indenture or the
related definitions affecting the ranking of the Securities or a
Guarantee in a manner which adversely affects the Holders in any
material respect;
(h) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms
of this Indenture; or
(i) modify Section 4.20 of this Indenture in any manner adverse to
a Holder of Securities.
It shall not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by
a Holder is a continuing consent by the Holder and every subsequent Holder of
that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(a) through (i) of Section 10.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
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SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
any Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantee to each Holder of a Security authenticated by the Trustee and to the
Trustee and its successors and assigns that: the principal of and interest on
the Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and interest on
the overdue principal and interest on any overdue interest on the Securities and
all other obligations of the Company to the Holders or the Trustee hereunder or
under the Securities will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; subject, however, to the
limitations set forth in Section 11.03. Each Guarantor hereby agree that their
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waive diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, each Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agree that, as between each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purpose of each Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall become due and payable by each Guarantor for the purpose of each
Guarantee.
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SECTION 11.02. Severability.
In case any provision of this Article Eleven shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Limitation of Guarantor's Liability.
Each Guarantor and by their acceptance hereof each Holder and the
Trustee, hereby confirm that it is the intention of all such parties that each
Guarantee not constitute a fraudulent transfer or conveyance for purposes of
title 11 of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. federal
or state or other applicable law. To effectuate the foregoing intention, the
Holders, each Guarantor hereby irrevocably agree that the obligations of each
Guarantor under each Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor pursuant to Section 11.04, result in the obligations such Guarantor
not constituting such a fraudulent transfer or conveyance.
SECTION 11.04. Contribution.
In order to provide for just and equitable contribution among
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under a Guarantee,
such Funding Guarantor shall be entitled to a contribution from all other
Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.03, for all payments, damages and expenses incurred by such
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations under a Guarantee.
SECTION 11.05. Execution of Guarantee.
To further evidence each Guarantee to the Holders, each of the
Guarantors hereby agrees to execute a guarantee to be endorsed on each Security
ordered to be authenticated and delivered by the Trustee. Each Guarantor hereby
agrees that its guarantee set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Security a guarantee.
Each such guarantee shall be signed on behalf of each Guarantor by its Chairman
of the Board, its President or one of its Vice Presidents prior to the
authentication of the Security on which it is endorsed, and the delivery of such
Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such guarantee on behalf of such Guarantor. Such
signature upon the guarantee may be manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the guarantee, and in
case such officer who shall have signed the guarantee shall cease to be such
officer before the Security on which such guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the Person who signed the guarantee had not ceased to be such officer of
such Guarantor.
SECTION 11.06. Subordination of Subrogation and Other Rights.
<PAGE> 75
-75-
Each Guarantor hereby agrees that any claim against the Company
that arises from the payment, performance or enforcement of such Guarantor's
obligations under a Guarantee or this Indenture, including, without limitation,
any right of subrogation, shall be subject and subordinate to, and no payment
with respect to any such claim of such Guarantor shall be made before, the
payment in full in cash of all outstanding Securities in accordance with the
provisions provided therefor in this Indenture.
ARTICLE TWELVE
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight courier
guaranteeing next day delivery, or mailed by first-class mail (registered or
certified, return receipt requested) addressed as follows:
if to the Company or a Guarantor:
9304 Forest Lane, Suite 200
Dallas, Texas 75243
Attention: Chief Executive Officer
Facsimile: (214) 343-9203
Telephone: (214) 343-7800
with a copy to:
<PAGE> 76
-76-
Sentinel Capital Partners
777 Third Avenue, 32nd Floor
New York, New York
Attention: David S. Lobel, Managing Partner
Facsimile: (212) 688-6513
Telephone: (212) 688-3100
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
Attention: Lance C. Balk, Esq.
Facsimile: (212) 446-4900
Telephone: (212) 446-4800
if to the Trustee:
The United States Trust Company New York
114 West 47th St., 25th Floor
New York, NY 10036-1532
Attention: Gerard Ganey
Corporate Trust Administration
Facsimile: (212) 852-1626
Telephone: (212) 852-1664
Each party by notice to the others may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid,
to a Holder including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be
mailed to him at his address as set forth on the Security Register and shall be
sufficiently given to him if so mailed within the time prescribed. To the extent
required by the TIA, any notice or communication shall also be mailed to any
Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received, if
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
All notices and communications (other than those sent to the
Trustee or the Holders) shall be deemed to have been duly given upon delivery if
by hand or overnight courier and three Business Days after being deposited in
the mail, postage prepaid. Any notice or communication to the
<PAGE> 77
-77-
Trustee shall be deemed to have been given to the Trustee when actually received
by the Trustee at its address as provided herein.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture after the date
hereof, the Company shall furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on
an Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Governing Law.
<PAGE> 78
-78-
The laws of the State of New York shall govern this Indenture, the
Securities and each Guarantee without regard to principles of conflicts of law
to the extent that the application of the law of another jurisdiction would be
required thereby.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, any Guarantee or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. Each Holder by accepting a Security waives and releases all such
liability. All obligations under this Indenture and the Securities shall be
expressly non-recourse to the partners of the Company in their capacities as
such; the partners shall not be liable for any claim based on, in respect of or
by reason of such obligations or their creation or bear any costs or expenses in
connection with this Indenture, the issuance and sale of the Securities or any
transactions contemplated hereby or thereby, and each Holder by accepting a
Security waives and releases any such obligations and liability.
SECTION 13.09. Successors.
All agreements of a party to this Indenture contained in this
Indenture shall bind such party's successors.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in a
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
<PAGE> 79
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
ROMACORP, INC.
By:
Name:
Title:
By:
Name:
Title:
ROMA SYSTEMS, INC.
By:
Name:
Title:
ROMA DINING LP
By:
Name:
Title:
ROMA HOLDINGS, INC.
By:
Name:
Title:
S-79
<PAGE> 80
ROMA HUNTINGTON BEACH, INC.
By:
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By:
Name:
Title:
ROMA FORT WORTH, INC.
By:
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By:
Name:
Title:
S-80
<PAGE> 81
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000 FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF THE FOREGOING
CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
A-81
<PAGE> 82
ROMACORP, INC.
12% Senior Note due 2006, Series A
CUSIP No.:[ ]
No. [ ] $[ ]
ROMACORP, INC., a Delaware corporation (the "Company", which term
includes any successor) for value received promises to pay to [ ] or registered
assigns, the principal sum of [ ] Dollars, on July 1, 2006.
Interest Payment Dates: January 1 and July 1, commencing on
January 1, 1999.
Interest Record Dates: December 15 and June 15
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
A-82
<PAGE> 83
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
ROMACORP, INC.
By:
Name:
Title:
By:
Name:
Title:
Dated: [ ]
A-83
<PAGE> 84
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Notes due 2006, Series A, described
in the within-mentioned Indenture.
Dated: [ ]
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By:
Authorized Signatory
A-84
<PAGE> 85
(REVERSE OF SECURITY)
ROMACORP, INC.
12% Senior Note due 2006, Series A
1. Interest.
ROMACORP, INC., a Delaware corporation (the "Company," which term
shall include any successor) promises to pay cash interest on each Interest
Payment Date on the principal amount of this Security at the rate per annum
shown above. Interest on the Securities will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from July 1,
1998. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing January 1, 1999. Interest will be computed on the basis
of a 360-day year of twelve 30-day months and, in the case of a partial month,
the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Securities and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, The United States Trust Company of New York (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to the Holders. The Company may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
July 1, 1998 (the "Indenture"), by and among the Company, the Guarantors and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. This Security is one of a duly authorized issue of
Securities of the Company designated as their 12% Senior Notes due 2006, Series
A, limited (except as otherwise provided in the Indenture) in aggregate
principal amount to $100,000,000 which may be issued under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of
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<PAGE> 86
1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on
the date of the Indenture (except as otherwise indicated in the Indenture) until
such time as the Indenture is qualified under the TIA, and thereafter as in
effect on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are general unsecured obligations of
the Company.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 1, 2003, upon not less than 30
nor more than 60 days notice, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on July 1 of the year set forth below, plus, in each case,
accrued and unpaid interest thereon, if any, to the date of redemption:
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
2003 106.00%
2004 104.00%
2005 and thereafter 102.00%
</TABLE>
6. Optional Redemption upon Public Equity Offerings and Strategic Equity
Investments.
In addition, at any time, or from time to time, on or prior to
July 1, 2001, the Company may, at its option, use the net cash proceeds of one
or more Public Equity Offerings or Strategic Equity Investments (each as defined
in the Indenture) to redeem the Securities at a redemption price equal to
112.00% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided that at least 65% of the
principal amount of Securities originally issued remains outstanding immediately
after any such redemption. In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering or Strategic Equity Investments, the
Company shall make such redemption not more than 120 days after the consummation
of any such Public Equity Offering.
7. Notice of Redemption.
In the event that less than all of the Securities are to be
redeemed at any time, selection of such Securities for redemption will be made
by the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed or, if such
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Securities of a principal amount of $1,000 or less
shall be redeemed in part; provided, further, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Securities
or portions thereof for redemption shall be made by the Trustee only on a pro
rata basis or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the
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<PAGE> 87
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to the Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make
an Offer to Purchase Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the Interest
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the excess proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples thereof. A
Holder shall register the transfer of or exchange of Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Securities or portions thereof selected for redemption,
except the unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal
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<PAGE> 88
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets or to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications and
exceptions. The Company must report quarterly to the Trustee on compliance with
such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company or their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or any Guarantor shall have any liability for any
obligation of the Company, or any Guarantor under the Securities, the Guarantee
of such Guarantor or the Indenture or for any claim based on, in respect of or
by reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities. All
obligations under the Indenture, the Initial Securities, the Private Exchange
Securities and the Unrestricted Securities shall be expressly non-recourse to
affiliates of the Company in their capacities as such, and by purchasing the
Securities, each holder of Securities waives any such liability of any affiliate
of the Company under the Indenture, the Initial Securities, the Private Exchange
Securities and the Unrestricted Securities. The affiliates of the Company shall
not be liable for any claim based on, in respect of or by reason of such
obligations or their creation or bear any costs or expenses in connection with
the Indenture, the Initial Securities, the Private Exchange Securities or the
Unrestricted Securities or any transaction contemplated thereby.
19. Authentication.
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<PAGE> 89
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for a 12% Senior Note due 2006, Series B, of the Company which
have been registered under the Securities Act, in like principal amount and
having terms identical in all material respects to the Initial Securities. The
Holders shall be entitled to receive certain additional interest payments in the
event such exchange offer is not consummated and upon certain other conditions,
all pursuant to and in accordance with the terms of the Registration Rights
Agreement.
23. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee without regard to principles of conflicts of laws to
the extent that the application of the law of another jurisdiction would be
required thereby.
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<PAGE> 90
[FORM OF GUARANTEE]
SENIOR GUARANTEE
The Guarantor (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby unconditionally guarantees
on a senior basis (such guaranty being referred to herein as the "Guarantee")
the due and punctual payment of the principal of, premium, if any, and interest
on the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal, premium and interest
on the Securities, and the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee, all in accordance with the terms
set forth in Article Eleven of the Indenture.
The obligations of the Guarantor to the Holders of Securities and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Eleven of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Guarantee therein made.
This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of law to the extent that the application of the law of another jurisdiction
would be required thereby.
This Guarantee is subject to release upon the terms set forth in
the Indenture.
ROMA FRANCHISE CORPORATION
By:
Name:
Title:
ROMA SYSTEMS, INC.
By:
Name:
Title:
ROMA DINING LP
By:
<PAGE> 91
Name:
Title:
ROMA HOLDINGS, INC.
By:
Name:
Title:
ROMA HUNTINGTON BEACH, INC.
By:
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By:
Name:
Title:
ROMA FORT WORTH, INC.
By:
Name:
Title:
<PAGE> 92
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:__________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
<PAGE> 93
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state
the amount: $_____________
Dated:___________________ Your Signature:
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE> 94
EXHIBIT B
[FORM OF SERIES B SECURITY]
ROMACORP, INC.
12% Senior Note due 2006, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
ROMACORP, INC., a Delaware corporation (the "Company", which term
includes any successor) for value received promises to pay to [ ] or registered
assigns, the principal sum of [ ] Dollars, on July 1, 2006.
Interest Payment Dates: January 1 and July 1, commencing on
January 1, 1999.
Interest Record Dates: December 15 and June 15
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
B-94
<PAGE> 95
IN WITNESS WHEREOF, the Company has caused this Security to be signed manually
or by facsimile by its duly authorized officers.
ROMACORP, INC.
By:
Name:
Title:
By:
Name:
Title:
Dated: [ ]
B-95
<PAGE> 96
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Notes due 2006, Series B, described
in the within-mentioned Indenture.
Dated: [ ]
UNITED STATES TRUST COMPANY NEW YORK,
as Trustee
By:
Authorized Signatory
B-96
<PAGE> 97
(REVERSE OF SECURITY)
ROMACORP, INC.
12% Senior Note due 2006, Series B
1. Interest.
ROMACORP, INC., a Delaware corporation (the "Company," which term
shall include any successor) promises to pay cash interest on each Interest
Payment Date on the principal amount of this Security at the rate per annum
shown above. Interest on the Securities will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from July 1,
1998. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing January 1, 1999. Interest will be computed on the basis
of a 360-day year of twelve 30-day months and, in the case of a partial month,
the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Securities and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, The United States Trust Company of New York (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to the Holders. The Company may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
July 1, 1998 (the "Indenture"), by and among the Company, the Guarantors and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. This Security is one of a duly authorized issue of
Securities of the Company designated as their 12% Senior Notes due 2006, Series
B, limited (except as otherwise provided in the Indenture) in aggregate
principal amount to $100,000,000, which may be issued under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of
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<PAGE> 98
1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on
the date of the Indenture (except as otherwise indicated in the Indenture) until
such time as the Indenture is qualified under the TIA, and thereafter as in
effect on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are general unsecured obligations of
the Company.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 1, 2003, upon not less than 30
nor more than 60 days notice, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on July 1 of the year set forth below, plus, in each case,
accrued and unpaid interest thereon, if any, to the date of redemption:
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
2003 106.00%
2004 104.00%
2005 and thereafter 102.00%
</TABLE>
6. Optional Redemption upon Public Equity Offerings and Strategic Equity
Investments.
In addition, at any time, or from time to time, on or prior to
July 1, 2001, the Company may, at its option, use the net cash proceeds of one
or more Public Equity Offerings or Strategic Equity Investments (each as defined
below) to redeem the Securities at a redemption price equal to 112.00% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that at least 65% of the principal amount of
Securities originally issued remains outstanding immediately after any such
redemption. In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering or Strategic Equity Investments, the Company shall make
such redemption not more than 120 days after the consummation of any such Public
Equity Offering.
7. Notice of Redemption.
In the event that less than all of the Securities are to be
redeemed at any time, selection of such Securities for redemption will be made
by the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed or, if such
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Securities of a principal amount of $1,000 or less
shall be redeemed in part; provided, further, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Securities
or portions thereof for redemption shall be made by the Trustee only on a pro
rata basis or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the
B-98
<PAGE> 99
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to this Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make
an Offer to Purchase Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the Interest
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the excess proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount and integral multiples thereof. A
Holder shall register the transfer of or exchange of Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Securities or portions thereof selected for redemption,
except the unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal
B-99
<PAGE> 100
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets or to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications and
exceptions. The Company must report quarterly to the Trustee on compliance with
such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company or their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or any Guarantor shall have any liability for any
obligation of the Company or any Guarantor under the Securities, the Guarantee
of such Guarantor or the Indenture or for any claim based on, in respect of or
by reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities. All
obligations under the Indenture, the Initial Securities, the Private Exchange
Securities and the Unrestricted Securities shall be expressly non-recourse to
the affiliates of the Company in their capacities as such, and by purchasing the
Securities, each holder of Securities waives any such liability of any
affiliates of the Company under the Indenture, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities. The affiliates of
the Company shall not be liable for any claim based on, in respect of or by
reason of such obligations or their creation or bear any costs or expenses in
connection with the Indenture, the Initial Securities, the Private Exchange
Securities or the Unrestricted Securities or any transaction contemplated
thereby.
19. Authentication.
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<PAGE> 101
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee without regard to principles of conflicts of laws to
the extent that the application of the law of another jurisdiction would be
required thereby.
B-101
<PAGE> 102
[FORM OF GUARANTEE]
SENIOR GUARANTEE
The Guarantor (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby unconditionally guarantees
on a senior basis (such guaranty being referred to herein as the "Guarantee")
the due and punctual payment of the principal of, premium, if any, and interest
on the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal, premium and interest
on the Securities, and the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee, all in accordance with the terms
set forth in Article Eleven of the Indenture.
The obligations of the Guarantor to the Holders of Securities and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Eleven of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Guarantee therein made.
This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of law to the extent that the application of the law of another jurisdiction
would be required thereby.
This Guarantee is subject to release upon the terms set forth in
the Indenture.
ROMA FRANCHISE CORPORATION
By:
Name:
Title:
ROMA SYSTEMS, INC.
By:
Name:
Title:
ROMA DINING LP
By:
Name:
<PAGE> 103
Title:
ROMA HOLDINGS, INC.
By:
Name:
Title:
ROMA HUNTINGTON BEACH, INC.
By:
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By:
Name:
Title:
ROMA FORT WORTH, INC.
By:
Name:
Title:
<PAGE> 104
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:____________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
<PAGE> 105
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.05 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state
the amount: $_____________
Dated:___________________ Your Signature:
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE> 106
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in the
case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
C-106
<PAGE> 107
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 12% Senior Notes due 2006
(the "Securities") of Romacorp, Inc.
This Certificate relates to $_______ principal amount of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
/ / has requested by written order that the Registrar
deliver in exchange for its beneficial interest in the Global Security held by
the Depositary a Physical Security or Physical Securities in definitive,
registered form of authorized denominations and an aggregate number equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or
/ / has requested the Registrar by written order to
exchange or register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require Registration under the
Securities Act of 1933, as amended (the "Act"), because*:
/ / Such Security is being acquired for the Transferor's
own account, without transfer (in satisfaction of Section 2.16 of the
Indenture).
/ / Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Act), in reliance on
Rule 144A.
/ / Such Security is being transferred to an
institutional "accredited investor" (within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Act) which delivers a certificate to the
Trustee in the form of Exhibit E to the Indenture.
/ / Such Security is being transferred in reliance on
Rule 144 under the Act.
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<PAGE> 108
/ / Such Security is being transferred in reliance on and
in compliance with an exemption from the Registration requirements of the Act
other than Rule 144A or Rule 144 under the Act to a person other than an
institutional "accredited investor."
[INSERT NAME OF TRANSFEROR]
By: ___________________________
[Authorized Signatory]
Date: *Check applicable box.
D-108
<PAGE> 109
EXHIBIT E
Form of Transferee Letter of Representation
Romacorp, Inc.
c/o United States Trust Company New York
114 West 47th St., 25th Floor
New York, NY 10036-1532
Attention: Corporate Trust Administration
Dear Sirs/Madam:
This certificate is delivered to request a transfer of $
principal amount of the 12% Senior Notes due 2006 (the "Notes") of Romacorp,
Inc. (the "Company"). Upon transfer, the Notes would be registered in the name
of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, that is purchasing for its own account or for the account of
such an institutional "accredited investor," in each case in a minimum principal
amount of Notes of $250,000 or (e) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any
E-109
<PAGE> 110
resale or other transfer of the Notes is proposed to be made pursuant to clause
(d) above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d) or (e) above to
require the delivery of an Opinion of Counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE: _________________________
By:
E-110
<PAGE> 1
EXHIBIT 4.2
ROMACORP, INC.
$75,000,000 AGGREGATE PRINCIPAL AMOUNT
OF
12% SENIOR NOTES DUE 2006
PURCHASE AGREEMENT
June 26, 1998
SALOMON SMITH BARNEY
SALOMON BROTHERS INC
SCHRODER & CO. INC.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
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 Schroder & 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.
<PAGE> 2
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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
<PAGE> 3
-3-
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
<PAGE> 4
-4-
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.
<PAGE> 5
-5-
(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 Act 1986 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 Act
1986 (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
<PAGE> 6
-6-
(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 Kirkland & Ellis, 153 East 53rd Street, New York, New York 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
<PAGE> 7
-7-
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
<PAGE> 8
-8-
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
<PAGE> 9
-9-
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-
<PAGE> 10
-10-
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
<PAGE> 11
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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
<PAGE> 12
-12-
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-
<PAGE> 13
-13-
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
<PAGE> 14
-14-
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-
<PAGE> 15
-15-
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).
<PAGE> 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-
<PAGE> 17
-17-
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 mark 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)
<PAGE> 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-
<PAGE> 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-
<PAGE> 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,
<PAGE> 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-
<PAGE> 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
<PAGE> 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-
<PAGE> 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 Kirkland & Ellis, 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 Cahill Gordon & Reindel, counsel for the Initial
Purchasers, dated the Closing Date, and addressed to the Initial
Purchasers, with re-
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 28
-28-
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.
<PAGE> 29
-29-
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 9304 Forest Lane, Suite 200, Dallas, Texas
75243, Attention: Chief Executive Officer, or (ii) if to the Initial Purchasers,
to Salomon Brothers Inc, Seven World Trade Center, New York, NY 10048,
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.
<PAGE> 30
-30-
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:
<PAGE> 31
-31-
ROMA HUNTINGTON BEACH, INC.
By:_____________________________________
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By:_____________________________________
Name:
Title:
ROMA FORT WORTH, INC.
By:_____________________________________
Name:
Title:
<PAGE> 32
-32-
Confirmed as of the date first
above mentioned.
SALOMON BROTHERS INC
SCHRODER & CO. INC.
By: SALOMON BROTHERS INC
By:_________________________________
Name:
Title:
<PAGE> 33
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
of Notes
Initial Purchasers to be Purchased
- ------------------ ---------------
<S> <C>
Salomon Brothers Inc........ $48,750,000
Schroder & Co. Inc.......... 26,250,000
-----------
$75,000,000
===========
</TABLE>
<PAGE> 34
SCHEDULE II
SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF
OWNED BY AND INCORPORATION/
NAME PERCENTAGE OWNED ORGANIZATION
- ---- ---------------- ------------
Subsidiaries
- ------------
<S> <C> <C>
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
</TABLE>
<PAGE> 1
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
Dated as of July 1, 1998
Among
ROMACORP, INC.
and
THE GUARANTORS NAMED HEREIN
as Issuers
and
SALOMON BROTHERS INC
and
SCHRODER & CO. INC.
as Initial Purchasers
12% Senior Notes due 2006
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
July 1, 1998, among ROMACORP, INC., a Delaware corporation (the "Company") and
each of the Company's domestic subsidiaries listed on the signature pages
hereof, as guarantors (the "Guarantors" and, together with the Company, the
"Issuers"), as issuers, and SALOMON BROTHERS INC and SCHRODER & CO. INC., as
Initial Purchasers (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of June 26, 1998, among the Company, the Guarantors and the
Initial Purchasers (the "Purchase Agreement"), which provides for, among other
things, the sale by the Company to the Initial Purchasers of $75,000,000
aggregate principal amount of the Company's 12% Senior Notes due 2006 (the
"Notes") guaranteed by the Guarantors (the "Guarantees"). The Notes and the
Guarantees are referred to herein as the "Securities." In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Issuers have agreed
to provide the registration rights set forth in this Agreement for the benefit
of the Initial Purchasers and any subsequent holder or holders of each of the
Notes. The execution and delivery of this Agreement is a condition to the
Initial Purchasers' obligation to purchase the Notes under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2 hereof.
Closing: See Purchase Agreement.
Company: See the introductory paragraph hereto.
Effectiveness Date: The 150th day after the Issue Date; provided,
however, that with respect to any Shelf Regis-
<PAGE> 3
-2-
tration other than a Shelf Registration if no Exchange Offer Registration
Statement has been filed, the Effectiveness Date shall be the 90th day after the
applicable Registration Statement with respect thereto is filed.
Effectiveness Period: See Section 3 hereof.
Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2 hereof.
Exchange Offer: See Section 2 hereof.
Exchange Offer Registration Statements: See Section 2 hereof.
Filing Date: (i) with respect to the Exchange Offer Registration
Statement, the 60th day after the Issue Date and (ii) with respect to any Shelf
Registration Statement, (A) if no Exchange Offer Registration Statement has been
filed by the Issuers pursuant to this Agreement, the 60th day after the Issue
Date and (B) in each other case (which may be applicable notwithstanding the
consummation of the Exchange Offer), the 150th day after the delivery of a Shelf
Notice.
Holder: Any holder of a Registrable Note.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of June [ ], 1998, among the
Issuers and the United States Trust Company of New York, as Trustee, pursuant to
which the Notes and the Guarantees are being issued, as the same may be amended
or supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(m) hereof.
<PAGE> 4
-3-
Issue Date: July 1, 1998, the date of original issuance of
the Securities.
Issuer: See the introductory paragraphs hereto.
NASD: See Section 5(s) hereof.
Notes: See the introductory paragraphs hereto.
Offering Memorandum: The final offering memorandum of the
Issuers dated June 26, 1998, in respect of the offering of the Securities.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2 hereof.
Private Exchange Notes: See Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(m) hereof.
Registrable Notes: Each Note upon its original issuance and at all
times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof
is applicable upon original issuance and at all times subsequent thereto and
each Private Exchange Note upon original issuance thereof and at all times
<PAGE> 5
-4-
subsequent thereto, until (i) a Registration Statement (other than, with respect
to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Note, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Note,
Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such
Note has been exchanged pursuant to the Exchange Offer for an Exchange Note or
Exchange Notes that may be resold without complying with the prospectus delivery
requirements under the Securities Act, (iii) such Note, Exchange Note or Private
Exchange Note, as the case may be, ceases to be outstanding for purposes of the
Indenture or (iv) such Note, Exchange Note or Private Exchange Note, as the case
may be, may be resold without restriction pursuant to Rule 144 under the
Securities Act.
Registration Statement: Any registration statement of the Issuers
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes
(and the related Guarantees), filed with the SEC under the Securities Act,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: See the introductory paragraphs hereto.
<PAGE> 6
-5-
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2 hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee
under any indenture governing the Exchange Notes and Private Exchange
Notes.
Underwritten registration or underwritten offering: A registration
in which securities of the Issuer are sold to an underwriter for reoffering to
the public.
2. Exchange Offer
(a) The Issuers shall file with the SEC, no later than the Filing
Date with respect to the Exchange Offer Registration Statement, a Registration
Statement (the "Exchange Offer Registration Statement") on the appropriate
registration form with respect to the registered offer (the "Exchange Offer") to
exchange any and all of each of the Registrable Notes for a like aggregate
principal amount of Notes (the "Exchange Notes") of the Company, guaranteed by
the Guarantors, that are identical in all material respects to the Notes, except
that the Exchange Notes shall contain no restrictive legend thereon. The
Exchange Notes shall be entitled to the benefits of the Indenture or a trust
indenture which is identical in all material respects to the Indenture (other
than such changes to the Indenture or any such identical trust indenture as are
necessary to comply with the TIA) and which, in either case, has been qualified
under the TIA. The Exchange Offer shall comply with all applicable tender offer
rules and regulations under the Exchange Act and other applicable law. The
Issuers shall use their reasonable best efforts to (x) cause each Exchange Offer
Registration Statement to be declared effective under the Securities Act on or
before the Effectiveness Date; (y) keep each Exchange Offer open for at least 20
business days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 45th day following the date on
<PAGE> 7
-6-
which the applicable Exchange Offer Registration Statement is declared effective
by the SEC. If, after an Exchange Offer Registration Statement is initially
declared effective by the SEC, that Exchange Offer or the issuance of the
Exchange Notes thereunder is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or court,
that Exchange Offer Registration Statement shall be deemed not to have become
effective for purposes of this Agreement.
Each Holder that participates in an Exchange Offer will be required,
as a condition to its participation in the Exchange Offer, to represent to the
Issuers in writing (which may be contained in the applicable letter of
transmittal) that any Exchange Notes to be received by it will be acquired in
the ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes in violation of
the provisions of the Securities Act, that such Holder is not an affiliate of
the Issuers within the meaning of the Securities Act and that such Holder
reasonably believes such Holder is not acting on behalf of any Person that could
not truthfully make the foregoing representations.
Upon consummation of an Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Notes that are Private Exchange
Notes, Exchange Notes as to which Section 2(c)(iv) is applicable and Exchange
Notes held by Participating Broker-Dealers (as defined), and the Issuers shall
have no further obligation to register Registrable Notes (other than Private
Exchange Notes and other than in respect of any Exchange Notes as to which
clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof.
No securities other than the Exchange Notes and Guarantees shall be
included in the Exchange Offer Registration Statement.
(b) The Issuers shall include within the Prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of any
Exchange Notes received by
<PAGE> 8
-7-
such broker-dealer in any Exchange Offer (a "Participating Broker-Dealer"),
whether such positions or policies have been publicly disseminated by the staff
of the SEC or such positions or policies represent the prevailing views of the
staff of the SEC. Such "Plan of Distribution" section shall also expressly
permit, to the extent permitted by applicable policies and regulations of the
SEC, the use of the Prospectus by all Persons subject to the prospectus delivery
requirements of the Securities Act, including, to the extent permitted by
applicable policies and regulations of the SEC, all Participating
Broker-Dealers, and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange Notes in compliance with
the Securities Act.
The Issuers shall use their reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as is necessary to comply with applicable
law in connection with any resale of the Exchange Notes covered thereby;
provided, however, that such period shall not exceed 210 days after consummation
of the Exchange Offer (or such longer period if extended by the last paragraph
of Section 5 herein)) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, the Issuers upon the request of the Initial Purchasers shall
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
issue and deliver to the Initial Purchasers, in exchange (the "Private
Exchange") for such Notes held by the Initial Purchasers, a like principal
amount of Notes (the "Private Exchange Notes") of the Company, guaranteed by the
Guarantors, that are identical in all material respects to the Exchange Notes
except for the placement of a restrictive legend on such Private Exchange Notes.
The Private Exchange Notes shall be issued pursuant to the same indenture as the
Exchange Notes. Each of the Private Exchange Notes shall bear the same CUSIP
number as the applicable Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date in a period which includes the
<PAGE> 9
-8-
record date for an interest payment date to occur on or after the date of such
exchange and as to which interest will be paid, the date on such interest
payment date or (B), if no interest has been paid on the Notes, from the Issue
Date.
In connection with each of the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder of record entitled
to participate in the Exchange Offer a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) use their best efforts to keep the Exchange Offer open for not
less than 20 business days after the date that notice of the Exchange
Offer is mailed to Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Issuers shall:
(1) accept for exchange all Registrable Notes validly tendered and
not validly withdrawn pursuant to the Exchange Offer and the Private
Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange and cause the Trustee to authenticate and deliver
promptly to each Holder Registrable Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount to the
securities of such Holder so accepted for exchange.
<PAGE> 10
-9-
The Exchange Offer and Private Exchange shall not be subject to any
conditions, other than that (i) the Exchange Offer or Private Exchange, as the
case may be, does not violate applicable law or any applicable interpretation of
the staff of the SEC, (ii) no action or proceeding shall have been instituted or
threatened in any court or by any governmental agency which might materially
impair the ability of the Issuers to proceed with the Exchange Offer or the
Private Exchange, and no material adverse development shall have occurred in any
existing action or proceeding with respect to the Issuers and (iii) all
governmental approvals shall have been obtained, which approvals the Issuers
deem necessary for the consummation of the Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and which, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that (a) the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture and
(b) the Private Exchange Notes shall be subject to the transfer restrictions set
forth in such indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent
together on all matters as one class and that none of the Exchange Notes, the
Private Exchange Notes or the Notes will have the right to vote or consent as a
separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuers are not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not consummated within 210 days
of the Issue Date, (iii) any holder of any Private Exchange Notes so requests in
writing to the Issuers within 60 days after the consummation of the Exchange
Offer, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Issuers within the meaning of the Securities Act), then in the case of each of
clauses (i) to and including (iv) of this sentence, the Issuers shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
<PAGE> 11
-10-
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuers shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange
Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is
applicable (the "Initial Shelf Registration"). The Issuers shall use their best
efforts to file with the SEC the Initial Shelf Registration on or before the
applicable Filing Date. The Initial Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Issuers shall not
permit any securities other than the Registrable Notes to be included in the
Initial Shelf Registration or any Subsequent Shelf Registration (as defined
below).
The Issuers shall use their reasonable best efforts to cause the
Initial Shelf Registration to be declared effective under the Securities Act on
or prior to the Effectiveness Date and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is two
years from the Issue Date (the "Effectiveness Period"), or such shorter period
ending when (i) all Registrable Notes covered by the Initial Shelf Registration
have been sold in the manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of the
Registrable Notes covered by and not sold under the Initial Shelf Registration
or an earlier Subsequent Shelf Registration has been declared effective under
the Securities Act; provided, however, that the Effectiveness Period in respect
of the Initial Shelf Registration shall be extended to the extent required to
permit dealers to comply with the applicable prospectus delivery requirements of
Rule 174 under the Securities Act and as otherwise provided herein.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Issuers shall use
their best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall
<PAGE> 12
-11-
within 60 days of such cessation of effectiveness amend the Initial Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes covered by and not
sold under the Initial Shelf Registration or an earlier Subsequent Shelf
Registration (each, a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Issuers shall use their best efforts to cause the
Subsequent Shelf Registration to be declared effective under the Securities Act
as soon as practicable after such filing and to keep such subsequent Shelf
Registration continuously effective for the remainder of the Effectiveness
Period. As used herein the term "Shelf Registration" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the Holders
will suffer damages if the Issuers fail to fulfill their obligations under
Section 2 or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, the Issuers agree to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Issuers have consummated or
will consummate the Exchange Offer, the Issuers are required to file a
Shelf Registration and such Shelf Registration is not filed on or prior to
the Filing Date applicable thereto, then commencing on the day after any
such Filing
<PAGE> 13
-12-
Date, Additional Interest shall accrue on the principal amount of the
Notes at a rate of .25% per annum for the first 90 days immediately
following each such Filing Date, such Additional Interest shall increase
by an additional .25% per annum at the beginning of each subsequent 90-day
period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration is declared effective by the SEC on or
prior to the relevant Effectiveness Date or (B) notwithstanding that the
Issuers have consummated or will consummate the Exchange Offer, the
Issuers are required to file a Shelf Registration and such Shelf
Registration is not declared effective by the SEC on or prior to the
Effectiveness Date in respect of such Shelf Registration, then, commencing
on the day after the applicable Effectiveness Date, Additional Interest
shall accrue on the principal amount of the Notes at a rate of .25% per
annum for the first 90 days immediately following the day after such
Effectiveness Date, and the rate of such Additional Interest shall
increase by an additional .25% per annum at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Issuers have not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 45th day after the date on which the Exchange Offer
Registration Statement relating thereto was declared effective or (B) if
applicable, a Shelf Registration has been declared effective and such
Shelf Registration ceases to be effective at any time during the
Effectiveness Period (other than such time as all Notes have been disposed
of thereunder), then Additional Interest shall accrue on the principal
amount of the Notes at a rate of .25% per annum for the first 90 days
commencing on the (x) 46th day after such effective date, in the case of
(A) above, or (y) the day such Shelf Registration ceases to be effective
in the case of (B) above, such Additional Interest shall increase by an
additional .25% per annum at the beginning of each such subsequent 90-day
period (it being understood and agreed that, notwithstanding any provision
to the contrary, so long as any Note that is the subject of a Shelf Notice
is then covered by an effective Shelf Registration, no Additional Interest
shall accrue or accumulate on such Notes);
provided, however, that the rate of Additional Interest that shall accrue on the
Notes may not exceed in the aggregate 1.0% per annum; provided, further,
however, that (1) upon the filing of the applicable Exchange Offer Registration
Statement or the
<PAGE> 14
-13-
applicable Shelf Registration as required hereunder (in the case of clause (i)
above of this Section 4(a)), (2) upon the effectiveness of the applicable
Exchange Offer Registration Statement or the applicable Shelf Registration
Statement as required hereunder (in the case of clause (ii) of this Section
4(a)), or (3) upon the exchange of the applicable Exchange Notes for all Notes
tendered (in the case of clause (iii)(A) of this Section 4(a), or upon the
effectiveness of the applicable Shelf Registration Statement which had ceased to
remain effective (in the case of (iii)(B) of this Section 4(a)), Additional
Interest on the Notes in respect of which such events relate as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease to
accrue or accumulate, as the case may be.
(b) The Issuers shall notify the Trustee (who shall be acting under
and protected by the terms of the Indenture) within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 shall be
payable in cash semiannually on each January 1 and July 1 (to the holders of
record on the December 15 and June 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the applicable rate of Additional Interest by the principal amount
of the Registrable Notes, multiplied by a fraction, the numerator of which is
the number of days such rate of Additional Interest was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days elapsed),
and the denominator of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuers shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuers hereunder, the Issuers
shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use
<PAGE> 15
-14-
their reasonable best efforts to cause each such Registration Statement to
become effective and remain effective as provided herein; provided, however,
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuers shall furnish
to and afford the Holders of the Registrable Notes included in such Registration
Statement or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five days prior to such filing, or such later date as is
reasonable under the circumstances). The Issuers shall not file any Registration
Statement or Prospectus or any amendments or supplements thereto if the Holders
of a majority in aggregate principal amount of the Registrable Notes included in
such Registration Statement, or any such Participating Broker-Dealer, as the
case may be, their counsel, or the managing underwriters, if any, shall
reasonably object on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Issuers shall be deemed not to have used
their best efforts to keep a Registration Statement effective during the
Effectiveness Period or the Applicable Period, as the case may be, relating
thereto if the Issuers voluntarily take any action that would result in selling
Holders of the Registrable Notes covered thereby or Participating Broker-Dealers
seeking to sell Exchange Notes not being able to
<PAGE> 16
-15-
sell such Registrable Notes or such Exchange Notes during that period unless
such action is required by applicable law or permitted by this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Notes Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period relating thereto from whom the Company has
received written notice that it will be a Participating Broker-Dealer in the
applicable Exchange Offer, notify the selling Holders of Registrable Notes or
each such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within 2 business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuers, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or resales of
Exchange Notes by Participating Broker-Dealers the representations and
warranties of the Issuers contained in any agreement (including any underwriting
agreement) contemplated by Section 5(l) hereof cease to be true and correct in
all material respects, (iv) of the receipt by the Issuers of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes or the
Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale
in any jurisdiction, or the initiation or written threat of any proceeding for
such purpose, (v) of the happening of any event, the existence of any condition
or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such
Registration Statement,
<PAGE> 17
-16-
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(vi) of the Issuers' determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its reasonable best efforts to prevent
the issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued,
to use its reasonable best efforts to obtain the withdrawal of any such order at
the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
reasonably requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such
Holders, or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Issuers have
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make amendments
to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any
<PAGE> 18
-17-
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, furnish to each selling Holder of Registrable Notes and to
each such Participating Broker-Dealer who so requests and to their respective
counsel and each managing underwriter, if any, at the sole expense of the
Issuers, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, deliver to each selling Holder of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole expense of
the Issuers, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Issuers
hereby consent to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents,
if any, and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or supplement
thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its reasonable best efforts to register or qualify, and
to cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the securities
or Blue Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters
reasonably request in writing;
<PAGE> 19
-18-
provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Issuers agree to cause their counsel to perform Blue
Sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h), keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Exchange held by Participating Broker-Dealers or the
Registrable Notes covered by the Registration Statement; provided, however, that
the Issuers shall not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuers, a supplement or post-effective amendment to the
applicable Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the purchasers
of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not con-
<PAGE> 20
-19-
tain 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
light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Issuers shall not be required to amend or
supplement a Registration Statement, any related Prospectus or any document
incorporated therein by reference, in the event that, and for a period not to
exceed an aggregate of 60 days in any calendar year if, (i) an event occurs and
is continuing as a result of which a Shelf Registration would, in the Issuers'
good faith judgment, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (ii)
(a) the Issuers determine in their good faith judgment that the disclosure of
such event at such time would have a material adverse effect on the business,
operations or prospects of the Issuers or (b) the disclosure otherwise relates
to a pending material business transaction that has not yet been publicly
disclosed.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
(l) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, make available for inspection by any selling
Holder of such Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
instruments of the Issuers and subsidiaries of the Issuers (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Issuers and any of their subsidiaries to supply all information
reasonably requested by any such Inspector in connection with such Registra-
<PAGE> 21
-20-
tion Statement and Prospectus. Each Inspector shall agree in writing that it
will keep the Records confidential and that it will not disclose any of the
Records that the Issuers determine, in good faith, to be confidential and notify
the Inspectors in writing are confidential unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or material
omission in such Registration Statement or Prospectus, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) the information in such Records has been made
generally available to the public; provided, however, that prior notice shall be
provided as soon as practicable to the Issuers of the potential disclosure of
any information by such Inspector pursuant to clauses (i) or (ii) of this
sentence to permit the Issuers to obtain a protective order (or waive the
provisions of this paragraph (m)) and that such Inspector shall take such
actions as are reasonably necessary to protect the confidentiality of such
information (if practicable) to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and interests
of the Holder or any Inspector.
(m) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders
of the Registrable Notes, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use their reasonable best efforts to cause such
trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner.
(n) Comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders with regard to any applicable
Registration Statement, a consolidated earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any twelve-month period (or 90 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which any Registrable Notes are sold to underwriters in a
firm
<PAGE> 22
-21-
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Issuers after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(o) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuers addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes as the case may be, and the related indenture constitute legal,
valid and binding obligations of the Issuers and the related Guarantees, the
legal, valid and binding obligations of each Guarantor, enforceable against them
in accordance with their respective terms subject to customary exceptions and
qualifications.
(p) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuers
(or to such other Person as directed by the Issuers) in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be, the Issuers
shall mark, or cause to be marked, on such Registrable Notes that such
Registrable Notes are being canceled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; provided that in no event shall such
Registrable Notes be marked as paid or otherwise satisfied.
(q) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(r) Use their best efforts to take all other steps reasonably
necessary to effect the registration of the applicable Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuers may require each seller of any Registrable Notes as to
which any registration is being effected to furnish to the Issuers such
information regarding such seller and the distribution of such Registrable Notes
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Notes of any seller for so long
as such seller fails to furnish such infor-
<PAGE> 23
-22-
mation within a reasonable time after receiving such request and in such event
shall have no further obligation under this Agreement (including without
limitation the obligation under Section 4) with respect to such seller or any
subsequent holder of such Registrable Notes. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the Issuers all
information required to be disclosed in order to make the information previously
furnished to the Issuers by such seller not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Issuers, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Issuers, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the applicable Registration Statement
filed or prepared subsequent to the time that such reference ceases to be
required.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes, as the case may be, to be sold by such Participating Broker-Dealer, as
the case may be, that, upon actual receipt of any notice from the Issuers of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder or Participating Broker-Dealer, as the
case may be, will forthwith discontinue disposition of such Registrable Notes or
Exchange Notes, as the case may be, covered by such Registration Statement or
Prospectus until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof, or until it is advised in writing (the "Advice") by the Issuers that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event that the Issuers shall give any
such notice, the Applicable Period shall be extended by the number of days
during such periods from and including the date of the giving of such notice to
and including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by
<PAGE> 24
-23-
such Participating Broker-Dealer, as the case may be, shall have received (x)
the copies of the supplemented or amended Prospectus contemplated by Section
5(j) hereof or (y) the Advice.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuers (other than any underwriting discounts or
commissions) shall be borne by the Issuers whether or not the Exchange Offer
Registration Statements or any Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) reasonable fees and expenses of compliance with
state securities or Blue Sky laws (including, without limitation, reasonable
fees and disbursements of counsel in connection with Blue Sky qualifications of
the Registrable Notes or Exchange Notes and determination of the eligibility of
the Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes or Exchange Notes, as
the case may be, are located, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes, as the case may be, to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses, including, without limitation, expenses of printing certificates for
Registrable Notes or Exchange Notes in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or underwriters, if any,
by the Holders of a majority in aggregate principal amount of the Registrable
Notes included in any Registration Statement or to be sold by any Participating
Broker-Dealer, as the case may be, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Issuers and reasonable
fees and disbursements of one special counsel for all of the sellers of each of
the Registrable Notes (exclusive of any counsel retained pursuant to Section 7
hereof), (v) reasonable fees and disbursements of all independent certified
public accountants referred to in Section 5(l)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Issuers desire such insurance, (vii) fees and expenses of all
other Persons retained by the Issuers, (viii) internal expenses of the Issuers
(including, without
<PAGE> 25
-24-
limitation, all salaries and expenses of officers and employees of the Issuers
performing legal or accounting duties), (ix) the expense of any annual audit,
(x) any fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, and the obtaining of a
rating of the securities, in each case, if applicable, and (xi) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, indentures and any other documents
necessary in order to comply with this Agreement.
7. Indemnification and Contribution
(a) The Issuers agree to indemnify and hold harmless each Holder of
the Registrable Notes and each Participating Broker-Dealer selling the Exchange
Notes during the Applicable Period, the affiliates, officers and directors of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages, judgments, liabilities and expenses (including, without
limitation, the reasonable legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused by,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented if the Issuers shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by, 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 case of the Prospectus in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Issuers
in writing by such Participant expressly for use therein and with respect to any
preliminary Prospectus, to the extent that any such loss, claim, damage or
liability arises solely from the fact that any Participant sold Registrable
Notes or Exchange Notes to a person to whom there was not sent or given a copy
of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of such sale if the Issuers shall have previously furnished copies
thereof to the Participant in accordance herewith and the Prospectus (as
<PAGE> 26
-25-
amended or supplemented) would have corrected any such untrue statement or
omission.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, the affiliates, officers and directors of the
Issuers and each Person who controls the Issuers within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
(but on a several, and not joint, basis) as the foregoing indemnity from the
Issuers to each Participant, but only with reference to information relating to
such Participant furnished to the Issuers in writing by or on behalf of such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may reasonably designate in such proceeding and shall pay
the fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Persons will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture by the
Indemnifying Person of substantial rights and defenses and the Indemnifying
Person was not otherwise aware of such action or claim. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person or any affiliate thereof and representation of both parties
by the
<PAGE> 27
-26-
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Persons shall
not, in connection with such proceeding or separate but substantially similar
related proceedings in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes and Exchange Notes sold by all such Participants and shall
be reasonably acceptable to the Issuers, and any such separate firm for the
Issuers, their affiliates, officers, directors, representatives, employees and
agents and such control Persons of such Issuers shall be designated in writing
by such Issuers and shall be reasonably acceptable to the Holders.
The Indemnifying Persons shall not be liable for any settlement of
any proceeding effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld or delayed), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person
<PAGE> 28
-27-
thereunder and in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect (i) the relative benefits received by the Indemnifying
Person or Persons on the one hand and the Indemnified Person or Persons on the
other from the offering of the applicable Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the Indemnifying
Person or Persons on the one hand and the Indemnified Person or Persons on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties 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 such
Participant or such other Indemnified Person, as the case may be, on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid 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 Securities Act) shall be entitled
<PAGE> 29
-28-
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
The Issuers covenant and agree that they will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time such Issuers are not required to file such reports, such Issuers
will, upon the request of any Holder or beneficial owner of Registrable Notes,
make available such information necessary to permit sales pursuant to Rule 144A
under the Securities Act. The Issuers further covenant and agree, for so long as
any Registrable Notes remain outstanding that they will take such further action
as any Holder of Registrable Notes may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Notes
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. Miscellaneous
(a) No Inconsistent Agreements. The Issuers have not, as of the date
hereof, and the Issuers shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuers' other issued and outstanding
securities under any such agreements. The Issuers will not enter into any
agreement with respect to any of their securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Securities. The Issuers shall
not, directly or indirectly, take any action
<PAGE> 30
-29-
with respect to the Registrable Notes that would adversely affect the ability of
the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuers and (II)(A) the Holders of not less than a majority
in aggregate principal amount of the then outstanding Registrable Notes and (B)
in circumstances that would adversely affect the Participating Broker-Dealers,
the Participating Broker-Dealers holding not less than a majority in aggregate
principal amount or liquidation preference, as the case may be, of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7 and this Section 10(c) may not be amended, modified or supplemented without
the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable may be
given by Holders of at least a majority in aggregate principal of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, the Exchange Indenture or of the Issuers,
as appropriate.
<PAGE> 31
-30-
(ii) if to the Issuers, at the address as follows:
ROMACORP, INC.
9304 Forest Lane, Suite 200
Dallas, TX 75243
Facsimile No.: (214) 343-9203
Attention: Corporate Counsel
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in the Indenture if such communication
relates to the Notes, Exchange Notes or Private Exchange Notes.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor of assign of a Holder or a Participating Broker-Dealer unless and to
the extent such successor or assign holds Registrable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
<PAGE> 32
-31-
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuers or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuers or their affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes, and
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement, the Indenture and the Exchange Indenture are intended by the parties
as a final and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein and
any and all prior oral or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and memoranda between
the Holders on the one hand and the Issuers on the other, or between or among
any agents, representatives, parents, subsidiaries, affiliates, predecessors in
interest or successors in interest with respect to the subject matter hereof and
thereof are merged herein and replaced hereby.
<PAGE> 33
-32-
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
ROMACORP, INC.
By: ____________________________
Name:
Title:
ROMA FRANCHISE CORPORATION
By: __________________________
Name:
Title:
ROMA SYSTEMS, INC.
By: __________________________
Name:
Title:
ROMA DINING LP
By: __________________________
Name:
Title:
<PAGE> 34
-33-
ROMA HOLDINGS, INC.
By: __________________________
Name:
Title:
ROMA HUNTINGTON BEACH, INC.
By: __________________________
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By: __________________________
Name:
Title:
ROMA FORT WORTH, INC.
By: __________________________
Name:
Title:
<PAGE> 35
-34-
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
SALOMON SMITH BARNEY
SCHRODER & CO. INC.
as Initial Purchasers
By: SALOMON BROTHERS INC
By: _______________________
Name:
Title:
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF KIRKLAND & ELLIS]
To Call Writer Direct:
212 446-4800
August 31, 1998
Romacorp, Inc.
Roma Systems, Inc.
Roma Dining LP
Roma Holdings, Inc.
Roma Huntington Beach, Inc.
Roma Bar Management Corporation
Roma Fort Worth, Inc.
9304 Forest Lane
Suite 200
Dallas, TX 75243
Re: Series B 12% Senior Notes due 2006
Ladies and Gentlemen:
We are acting as special counsel to the Registrants, in connection with
the proposed registration by the Registrants of up to $75,000,000 in aggregate
principal amount of the Registrants' Series B 12% Senior Notes due 2006 (the
"Exchange Notes"), pursuant to a Registration Statement on Form S-4 filed with
the Securities and Exchange Commission (the "Commission") on the date hereof
under the Securities Act of 1933, as amended (the "Securities Act") (such
Registration Statement, as amended or supplemented, is hereinafter referred to
as the "Registration Statement"), for the purpose of effecting an exchange offer
(the "Exchange Offer") for the Registrants' 12% Senior Notes due 2006 (the "Old
Notes"). The Exchange Notes are to be issued pursuant to the Indenture (the
"Indenture"), dated as of July 1, 1998, among the Registrants and United States
Trust Company of New York, as Trustee, in exchange for and in replacement of the
Registrants' outstanding Old Notes, of which $75,000,000 in aggregate principal
amount is outstanding.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the corporate and organizational documents of the
Registrants, (ii) minutes and records of the corporate proceedings of the
Registrants with respect to the issuance of the Exchange Notes, (iii) the
Registration Statement and exhibits thereto and (iv) the Registration Rights
Agreement, dated as of July 1, 1998, among the Registrants, Salomon Brothers
Inc and Schroder & Co. Inc.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the
<PAGE> 2
August 31, 1998
Page 2
genuineness of the signatures of persons signing all documents in connection
with which this opinion is rendered, the authority of such persons signing on
behalf of the parties thereto other than the Registrants, and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Registrants. As to any facts material to the opinions expressed
herein which we have not independently established or verified, we have relied
upon statements and representations of officers and other representatives of the
Registrants and others.
Based upon and subject to the foregoing qualifications, assumptions and
limitations and the further limitations set forth below, we are of the opinion
that:
(1) Each of the Company, Roma Holdings, Inc., Roma Systems, Inc. and
Roma Huntington Beach, Inc. is a corporation existing and in good standing under
the General Corporation Law of the State of Delaware.
(2) Each of Roma Bar Management Corporation and Roma Fort Worth, Inc.
is a corporation existing and in good standing under the laws of the State
of Texas.
(3) Roma Dining LP is a limited partnership existing and in good
standing under the laws of the State of Delaware.
(4) The sale and issuance of the Exchange Notes has been validly
authorized by the Registrants.
(5) When, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the Indenture
shall have been qualified pursuant to the provisions of the Trust Indenture Act
of 1939, as amended, (iii) the Old Notes shall have been validly tendered to the
Company and (iv) the Exchange Notes shall have been issued in the form and
containing the terms described in the Registration Statement, the Indenture, the
resolutions of the Registrants' Board of Directors or Board of Managers, as the
case may be, (or authorized committee thereof) authorizing the foregoing and any
legally required consents, approvals, authorizations and other order of the
Commission and any other regulatory authorities to be obtained, the Exchange
Notes when issued pursuant to the Exchange Offer will be legally issued, fully
paid and nonassessable and will constitute valid and binding obligations of the
Registrants.
Our opinions expressed above are subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies and (iv) any laws except the laws of
<PAGE> 3
August 31, 1998
Page 3
the State of New York and the General Corporation Law of the State of Delaware.
For purposes of the opinions in paragraphs 1, 2 and 3, we have relied
exclusively upon recent certificates issued by the Secretary of State of
Delaware, New York and Texas and such opinions are not intended to provide any
conclusion or assurance beyond that conveyed by such certificates. We have
assumed without investigation that there has been no relevant change or
development between the respective dates of such certificates and the date of
this letter.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. We also consent to the reference to our firm under the
heading "Legal Matters" in the Registration Statement. In giving this consent,
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Commission.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance of the Exchange Notes.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the States of Delaware or New York be changed by legislative action,
judicial decision or otherwise.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Yours very truly,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS
<PAGE> 1
EXHIBIT 10.1
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of July 1, 1998, by and among
Roma Restaurant Holdings, Inc. (formerly known as Romacorp, Inc.), a Delaware
corporation (the "Company"), Sentinel Capital Partners, L.P., a Delaware limited
partnership ("Sentinel"), Sentinel Capital Partners II, L.P., a Delaware limited
partnership ("Sentinel II"), Omega Partners, L.P. ("Omega"), Provident Financial
Group, Inc. ("Provident"), Travelers Casualty and Surety Company ("Travelers
I"), The Travelers Insurance Company ("Travelers II"), The Travelers Life and
Annuity Company ("Travelers III") and The Phoenix Insurance Company (together
with Travelers I, Travelers II, and Travelers III, the "Travelers Group", and
Sentinel II, Omega, Provident and the Travelers Group shall be referred to as
the "Investors") and NPC Restaurant Holdings, Inc., a Delaware corporation
("Holdings"). Capitalized terms used herein but not otherwise defined have the
meaning set forth in Section 1. The parties hereto (other than the Company),
their Permitted Transferees and any other person who becomes a party hereto are
collectively referred to as the "Stockholders" and individually as a
"Stockholder."
WHEREAS, each of the Stockholders has purchased from the
Company, or otherwise own, certain shares of the common stock of the Company,
par value $0.01 per share (the "Common Stock"), pursuant to the terms and
conditions of the Recapitalization Agreement;
WHEREAS, it is a condition precedent to the obligations of the
Investors and Holdings under the Recapitalization Agreement that each of the
parties hereto enter into this Agreement; and
WHEREAS, the Company and the Stockholders desire to enter into
this Agreement for the purposes, among others, of (i) establishing the
composition of the Board, (ii) assuring continuity in the management and
ownership of the Company and (iii) limiting the manner and terms by which the
Company Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall mean, as to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
<PAGE> 2
"Approved Sale" means the sale of the Company, in a single
transaction or a series of related transactions, to a third party (which is not
an Affiliate of the Approving Stockholders) (a) pursuant to which such third
party proposes to acquire all or substantially all of the outstanding Common
Stock (whether by merger, consolidation, recapitalization, reorganization,
purchase of the outstanding Common Stock or otherwise) or all or substantially
all of the consolidated assets of the Company, (b) which has been approved by
both the Board and the holders of a majority of the outstanding Sentinel
Stockholder Shares (the "Approving Stockholders"), and (c) pursuant to which all
holders of Common Stock receive with respect thereto (whether in such
transaction or, with respect to an asset sale, upon a subsequent liquidation)
the same form and amount of consideration per share of Common Stock or, if any
holders are given an option as to the form and amount of consideration to be
received, all holders are given the same option.
"Board" means the Company's board of directors.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which banks are required or authorized by law to be closed in the
State of New York or City of New York.
"Bylaws" means the Amended and Restated Bylaws of the Company,
which will be adopted and become effective on the date hereof, and subsequent
amendments thereto.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, which will be adopted and become
effective on the date hereof, and any subsequent amendments thereto.
"Common Stock" has the meaning given thereto in the recitals
hereof.
"Company Shares" means all issued and outstanding shares of
capital stock of the Company and all rights to acquire capital stock of the
Company and all stock appreciation, phantom stock, profit, participation and
similar rights with respect to the Company's capital stock of whatever nature.
"Family Group" means, with respect to an individual
Stockholder, such Stockholder's spouse and descendants (whether natural or
adopted) and any trust solely for the benefit of such Stockholder and/or such
Stockholder's spouse, their respective ancestors and/or descendants (whether
natural or adopted).
"GAAP" means United States generally accepted accounting
principles, as in effect from time to time and as adopted by the Company with
the consent of its independent public accountants, consistently applied.
"Governmental Entity" means individually, and "Government
Entities" means collectively, the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government, including any Tribunal, in each case having jurisdiction over the
Company or any of its Subsidiaries.
-2-
<PAGE> 3
"Holders" means all Stockholders and any other holders of
Company Shares.
"Other Stockholders" means, with respect to a Stockholder, all
Stockholders other than such Stockholder.
"Permitted Transferees" has the meaning given thereto in
Section 4(d).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Pro Rata Share" means, with respect to each Stockholder, the
quotient determined by dividing (i) the total number of Stockholder Shares held
by such Stockholder, by (ii) the total number of Stockholder Shares held by all
Stockholders.
"Public Sale" means any sale of Company Shares to the public
pursuant to an offering registered under the Securities Act or to the public
effected through a broker, dealer or market maker pursuant to the provisions of
Rule 144 under the Securities Act.
"Qualified Public Offering" means the sale, in an underwritten
public offering registered under the Securities Act, of shares of the Company's
Common Stock providing aggregate gross proceeds (before deducting under-writing
discounts and expenses) to the Company and any selling Stockholders of at least
$50 million and at an offering price which represents a common equity valuation
of the Company's Common Stock outstanding immediately prior to the issuance of
Common Stock in connection with such offering of at least $120 million.
"Recapitalization Agreement" means the Recapitalization
Agreement by and among the Company, NPC International, Inc., Holdings and
Sentinel, dated as of April 24, 1998, as amended, with certain rights and
obligations assigned to Sentinel II, Omega, Provident and the Travelers Group.
"Registration Rights Agreement" means that Registration Rights
Agreement by and among the parties hereto, dated as of the date hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Sentinel Stockholder Shares" means all Stockholder Shares
issued or issuable to Sentinel or Sentinel II and their Affiliates or otherwise
acquired by such Persons.
"Stockholder Shares" means (i) any Common Stock held by the
Stockholders, and (ii) any equity securities of the Company issued or issuable
directly or indirectly with respect to the securities referred to in clause (i)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided that Stockholder Shares shall not include (a) shares of
Common Stock issued pursuant to the
-3-
<PAGE> 4
conversion or exercise of any options, warrants or other convertible securities
or (b) any equity securities of the Company issued or issuable with respect to
the securities referred to in clause (a) above in connection with a combination
or split of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been sold in a
Public Sale, an Approved Sale, or upon the consummation of a Qualified Public
Offering.
"Stock Option Plan" means the Roma Restaurant Holdings, Inc.
1998 Stock Option Plan, as in effect from time to time.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing director or a general partner of such partnership,
association or other business entity.
"Transaction Documents" means the following agreements, all of
which are dated as of the date hereof, as amended from time to time: this
Agreement, the Recapitalization Agreement (including the Schedules thereto), the
Registration Rights Agreement, and the Transitional Financial and Accounting
Services Agreement.
"Transitional Financial and Accounting Services Agreement"
means that Transitional Financial and Accounting Services Agreement by and among
the Company and NPC Management, Inc., dated as of the date hereof.
"Tribunal" means any government, arbitration panel, court or
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village, municipality or
other Government Entity, whether now or hereafter constituted and/or existing.
2. Board of Directors.
(a) Until the provisions of this Section 2 cease to be
effective, to the extent permitted by law, each Stockholder shall vote all
voting securities of the Company over which such Stockholder has voting control,
and shall take all other necessary or desirable actions within such
Stockholder's control (whether in such Stockholder's capacity as a stockholder,
director, member of a board committee or officer of the Company or otherwise,
and including, without limitation, attendance at meetings in person or by proxy
for purposes of obtaining a quorum and execution of
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<PAGE> 5
written consents in lieu of meetings), and the Company shall take all necessary
and desirable actions within its control (including, without limitation, calling
special Board and stockholder meetings), so that:
(i) the authorized number of directors on the Board shall be
established at between 5 and 11 persons and that the following persons
shall be elected to the Board:
(A) up to 9 persons (depending on the current authorized
size of the board) designated by Sentinel II, who
shall initially include John F. McCormack, Eric D.
Bommer, Michael J. Myers and Robert B. Page;
(B) 1 person designated by Sentinel, who shall initially
be David S. Lobel;
(C) so long as Holdings holds 5% or more of the
outstanding Common Stock or Holdings has not
transferred more than 50% of the Common Stock it
holds immediately after consummation of the
transactions contemplated by the Recapitalization
Agreement, 1 person designated by Holdings, who shall
initially be James K. Schwartz (the "Holdings
Director");
(ii) the composition of the board of directors of each of the
Company's Subsidiaries (a "Sub Board") shall be determined by a
majority of the entire Board;
(iii) the Board shall, and each Sub Board may, create a
Compensation Committee and an Audit Committee;
(iv) all committees of the Board or a Sub Board (other than
the Compensation Committee and Audit Committee) shall be created only
upon the approval of a majority of the voting power of the Board and
the composition of all committees shall consist of such persons as a
majority of the voting power of the Board determines, provided that as
long as Holdings shall be entitled to designate a director of the
Company pursuant to clause (i)(B) above, each committee of the Board
shall include the Holdings Director;
(v) directors shall be removed from the Board, a Sub Board or
any committee thereof (without cause) at the written request of the
Stockholder or Stockholders which have the right to designate such
directors hereunder, but only upon such written request and under no
other circumstances, except as required by law; and
(vi) in the event that any representative designated hereunder
for any reason ceases to serve as a member of the Board or a Sub Board
or any committee thereof during such representative's term of office,
the resulting vacancy on the Board or such Sub Board or committee shall
be filled by a representative designated by the Stockholder or
Stockholders who designated the departing director.
(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings of
the Board or any Sub Board and any committee thereof. In addition, the Company
shall pay such additional reasonable compensation
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to directors who are not employees of the Company or any of its Subsidiaries, as
the Board so determines.
(c) The provisions of this Section 2 shall terminate
automatically and be of no further force and effect upon the consummation of a
Qualified Public Offering.
(d) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 2, the election of a Person
to such directorship shall be accomplished in accordance with the Bylaws, the
Certificate of Incorporation and applicable law. In the event that any provision
of the Company's Bylaws or certificate of incorporation is inconsistent with any
provision of this Section 2, the Stockholders shall take such action as may be
necessary to amend any such provision in the Bylaws or the Certificate of
Incorporation to remedy such inconsistency.
3. Conflicting Agreements. Each Stockholder represents that
such Stockholder has not granted and is not a party to any proxy, voting trust
or other agreement which is inconsistent with or conflicts with the provisions
of this Agreement, and no holder of Company Shares shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement.
4. Restrictions on Transfer of Company Shares.
(a) Transfer of Company Shares. No Holder shall sell,
transfer, assign, pledge or otherwise dispose (a "Transfer") of (whether with or
without consideration and whether voluntarily or involuntarily or by operation
of law) any interest in such Holder's Company Shares except (i) if such Transfer
does not, in the discretion of the Company's independent auditors, adversely
effect the recapitalization accounting treatment of the transactions to be
consummated as contemplated by the Recapitalization Agreement and (ii) pursuant
to the provisions of this Section 4 or Section 5, or in a Public Sale; provided
that in no event shall Holdings be permitted to Transfer more than 50% of the
number of shares (as adjusted for any splits, consolidations or other similar
transactions) of any class of Company Shares held by it immediately following
the consummation of the transactions contemplated by the Recapitalization
Agreement until the one year anniversary of the date hereof.
(b) Tag Along Rights. Subject to Sections 4(a), 4(c) and 4(e),
at least 15 days prior to any Transfer of more than 50% of the outstanding
Company Shares by Sentinel and/or Sentinel II (the "Transferring Stockholders"),
the Transferring Stockholders shall deliver a written notice (the "Sale Notice")
to the Company and the Other Stockholders, specifying in reasonable detail the
identity of the prospective transferee(s) and the terms and conditions of the
Transfer. The Other Stockholders may elect to participate in the contemplated
Transfer by delivering written notice to the Transferring Stockholders within 10
days after delivery of the Sale Notice. If any Other Stockholders have elected
to participate in such Transfer, each of the Transferring Stockholders and such
Other Stockholders shall be entitled to sell in the contemplated Transfer, at
the same price and on the same terms, a number of Company Shares of any series
or class equal to the product of (i) the quotient determined by dividing the
number of Stockholder Shares of such series or class owned by such Stockholder
by the aggregate number of Stockholder Shares of such
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<PAGE> 7
series or class owned by the Stockholders participating in such Transfer and
(ii) the aggregate number of Company Shares of such series or class to be sold
in the contemplated Transfer.
(c) First Refusal Rights.
(i) Subject to Sections 4(a), 4(b), 4(d) and 4(e), at least
60 days prior to any sale of Company Shares by any Stockholder (other
than Sentinel or Sentinel II) or any of their Permitted Transferees,
such Person making such sale (the "Offering Stockholder") shall deliver
a written notice (the "Transfer Notice") to the Company and the Other
Stockholders specifying in reasonable detail the number of shares
proposed to be sold (the "Transfer Stock"), the proposed purchase price
(which shall be payable solely in cash) and the other terms and
conditions of the sale and enclosing therewith a true and complete copy
of a written offer, letter of intent or other written document signed
by the prospective transferee setting forth the proposed terms and
conditions of the sale. The Company (or its designee(s)) may elect to
purchase all (but not less than all) of the Transfer Stock, upon the
same terms and conditions as those set forth in the Transfer Notice, by
delivering a written notice of such election to the Stockholders within
20 days after the Transfer Notice has been delivered to the Company.
(ii) If the Company and its designee(s) have not elected to
purchase all of the Transfer Stock, Sentinel II (or designee(s)) may
elect to purchase, upon the same terms and conditions as those set
forth in the Transfer Notice, all or some of the number (the "Sentinel
Portion") of shares of Transfer Stock equal to the product of (A)
Sentinel II's Pro Rata Share (provided that the determination of Pro
Rata Share shall be made without regard to any Stockholder Shares held
by the Offering Stockholder), multiplied by (B) the number of shares of
Transfer Stock, by giving written notice of such election to the
Stockholders within 30 days after the Transfer Notice has been
delivered to Sentinel II (the "Sentinel Option Period"). The quotient,
determined by dividing (x) the number of shares of Transfer Stock
elected to be purchased by Sentinel II by (y) the Sentinel Portion,
shall be referred to as the "Sentinel Ratio".
(iii) If Sentinel II has elected to purchase any shares of
Transfer Stock, each Other Stockholder shall have the right to elect to
purchase, upon the same terms and conditions as those set forth in the
Transfer Notice, all or some of a number of shares of Transfer Stock
equal to the product of (A) the Sentinel Ratio, (B) such Stockholder's
Pro Rata Share (provided that the determination of Pro Rata Share shall
be made without regard to any Stockholder Shares held by the Offering
Stockholder) and (C) the number of shares of Transfer Stock, by giving
written notice of such election to the Other Stockholders within 10
days after the Sentinel Option Period (the "Stockholder Option
Period"). Those Other Stockholders electing to purchase shares of
Transfer Stock shall be referred to as "Electing Stockholders".
(iv) If Sentinel II has elected to purchase any shares of
Transfer Stock but Sentinel II and the Electing Stockholders have not
elected to purchase all the Transfer Stock, each of Sentinel II and the
Electing Stockholders shall have the right to elect to purchase all
(but not less than all) of the shares of Transfer Stock not previously
elected to be purchased (the
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<PAGE> 8
"Excess Stock"), by giving written notice of such election to the
Stockholders within 10 days after the Stockholder Option Period. If
more than one of Sentinel II and the Electing Stockholders elects to
purchase the Excess Stock, the Excess Stock will be sold pro rata to
the Stockholders electing to purchase such shares based on the number
of Stockholder Shares owned by each such Stockholder.
(v) If neither (A) the Company (or its designee(s)) nor (B)
Sentinel II (or its designee(s)) and the Other Stockholders elects to
purchase all of the Transfer Stock specified in the Transfer Notice,
then no Stockholder shall be permitted to purchase any of the Transfer
Stock and the Offering Stockholder may sell the Transfer Stock at a
price and on terms no more favorable to the transferee(s) thereof than
specified in the Transfer Notice during the 60-day period immediately
following the expiration of the Stockholder Option Period. Any Transfer
Stock not transferred within such 60-day period will be subject to the
provisions of this Section 4(c) upon any subsequent proposed sale.
(d) Approval Rights. Notwithstanding anything herein to the
contrary, if pursuant to Section 4(c)(v) Holdings or any of its Permitted
Transferees (the "Holdings Seller") has the right to Transfer the Transfer Stock
to Persons other than the Company or the Stockholders, then the Company shall
have the right to approve or disapprove of the prospective transferee(s) within
10 days of the Holdings Seller giving notice to the Company of the identities of
such prospective transferee(s); provided that the Company shall only disapprove
of a prospective transferee on a good faith basis. If the Company approves the
prospective transferee(s) then the Holdings Seller shall have the right to
Transfer the Transfer Stock to such transferee(s) as provided in Section
4(c)(v). If the Company disapproves of the prospective transferee(s), then (i)
the Holdings Seller shall have the right to Transfer the Transfer Stock to such
transferee(s) as provided in Section 4(c)(v) provided that the joinder(s) to
this Agreement that are required to be executed by such transferee(s) pursuant
to Section 10 (b) shall be amended to expressly provide that such transferee(s)
shall not be deemed "Stockholders" nor their securities "Stockholder Shares" for
the purposes of this Agreement, (ii) if the Holdings Seller does not Transfer
the Transfer Stock to the disapproved transferee(s) then the Company shall use
reasonable efforts (at the expense of the Holdings Seller) to assist the
Holdings Seller in the Transfer of the Transfer Stock to such Person(s) as the
Company approves within the 90-day period immediately following the expiration
of the applicable Stockholder Option Period.
(e) Permitted Transfers. The restrictions contained in
Sections 4(a), 4(b) and 4(c) shall not apply with respect to (A) the pledge of
Company Shares made by the Stockholders pursuant to Section 7 and (B) any
Transfer of Company Shares by any Stockholder (i) in the case of an individual
Stockholder, pursuant to applicable laws of descent and distribution or to any
member of such Stockholder's Family Group, (ii) in the case of an Investor, (x)
among its Affiliates, partners, employees and consultants or other Persons
acceptable to the Company, (y) to any employee, prospective employee, director
or prospective director of the Company or any Affiliate of the Company or (z) to
any former or prospective employee, director or prospective director of such
entity or any Affiliate of such entity, and (iii) in the case of Holdings or any
other Stockholder which is not an individual, among its respective Affiliates,
partners, employees and consultants, or to any former or prospective employee,
director or prospective director of such entity or any Affiliate of such entity;
provided, that the restrictions contained in Sections 4(a), 4(b) and 4(c) shall
continue to be applicable to such Company Shares after any such Transfer; and
provided further, that
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<PAGE> 9
the transferees of such Company Shares shall have agreed in writing to be bound
by the provisions of this Agreement which affect the Company Shares so
transferred by executing a Joinder Agreement in the form substantially attached
hereto as Exhibit A. All transferees permitted under this Section 4(d) are
collectively referred to herein as "Permitted Transferees."
(f) Assistance Rights. Notwithstanding anything to the
contrary herein, to the extent a sale of Company Shares by Holdings is not
prohibited by Section 4(a), at the request of Holdings, the Company shall use
reasonable efforts (at the expense of Holdings) to assist Holdings in the
Transfer of its Company Shares to a Person acceptable to the Company; provided
that no such assistance shall be deemed a waiver of any of the Company's rights
hereunder including, without limitation, its rights contained in Section 4(c).
(g) Termination of Restrictions. The restrictions set forth in
this Section 4 shall continue with respect to each Company Share until the
earlier of (i) the Transfer of such Company Share in a Public Sale or an
Approved Sale, or (ii) the consummation of a Qualified Public Offering.
5. Sale of the Company.
(a) In the event that an Approved Sale is proposed (a
"Proposed Sale"):
(i) The Company shall provide a written notice (the "Approved
Sale Notice") of such Proposed Sale to each of the Holders not later
than the twentieth (20th) Business Day prior to the consummation of the
Proposed Sale. The Approved Sale Notice shall contain written notice of
the Proposed Sale, setting forth the consideration to be paid by the
third party or parties and the other material terms and conditions of
the Proposed Sale.
(ii) Anything herein to the contrary notwithstanding, neither
the Company nor the holders of Sentinel Stockholder Shares shall have
any obligation to any Holder to sell or otherwise dispose of the
Company Shares of any Holder pursuant to this Section 5 or as a result
of any decision by the Company or the holders of Sentinel Stockholder
Shares, as applicable, not to accept or consummate any proposed sale of
the Company or securities of the Company (it being understood that any
and all such decisions shall be made by the Company or the holders of
Sentinel Stockholder Shares, as applicable, in such person's sole
discretion). No Holder shall be entitled to make any sale of Company
Shares directly to any third party pursuant to an Approved Sale (it
being understood that all such sales shall be made only on the terms
and pursuant to the procedures set forth in this Section 5).
(b) In the event of an Approved Sale, each Holder will (i)
consent to and raise no objections against the Approved Sale or the process
pursuant to which the Approved Sale was arranged, (ii) waive any dissenter's
rights and other similar rights, and (iii) if the Approved Sale is structured as
a sale of securities, each Holder will agree to sell its Company Shares on the
terms and conditions of the Approved Sale. Each Holder will take all necessary
and desirable actions as directed by the Board and the Approving Stockholders in
connection with the consummation of any Approved Sale, including without
limitation executing the applicable purchase agreement and granting identical
indemnification rights. Each Holder shall be required to make indemnification
payments in connection with any Approved Sale only to the extent that the amount
required to be
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<PAGE> 10
paid by such Holder is proportionate to the proportion of the total
consideration received by all Holders, compared to the consideration actually
received by such Holder.
(c) All Holders will bear their pro rata share (based upon the
number of shares sold) of the reasonable costs of any sale of Company Shares
pursuant to an Approved Sale to the extent such costs are incurred for the
benefit of all selling Holders and are not otherwise paid by the Company or the
acquiring party. Costs incurred by any Holder on its own behalf will not be
considered costs of the transaction hereunder.
(d) This Section 5 shall automatically terminate upon the
consummation of a Qualified Public Offering.
6. Stockholders' Rights of First Refusal on Company's Issuance
of Equity Equivalents. (a) If at any time the Company wishes to issue any equity
securities or any options, warrants or other rights to acquire equity securities
(collectively, the "Equity Equivalents") to any Person or Persons (other than
pursuant to the Stock Option Plan), the Company shall promptly deliver a notice
of intention to sell (the "Company's Notice of Intention to Sell") to each
Stockholder setting forth a description of the Equity Equivalents to be sold and
the proposed purchase price and terms of sale. Upon receipt of the Company's
Notice of Intention to Sell, Sentinel II shall have the right to elect to
purchase, at the price and on the terms stated in the Company's Notice of
Intention to Sell, all or some of the number (the "Pro-Rata Sentinel Portion")
of Equity Equivalents equal to the product of (x) Sentinel II's Pro Rata Share,
multiplied by (y) the number of Equity Equivalents to be issued. Such election
is to be made by Sentinel II by written notice to the Company and the Other
Stockholders within 20 days after receipt by Sentinel II of the Company's Notice
of Intention to Sell (the "Acceptance Period"). The quotient, determined by
dividing (A) the number of Equity Equivalents elected to be purchased by
Sentinel II by (B) the Pro-Rata Sentinel Portion, shall be referred to as the
"Sentinel Percentage". If Sentinel II has elected to purchase any of the Equity
Equivalents, each Other Stockholder shall have the right to elect to purchase,
at the price and on the terms stated in the Company's Notice of Intention to
Sell, all or some of a number of the Equity Equivalents equal to the product of
(m) the Sentinel Percentage, (n) such Stockholder's Pro Rata Share and (o) the
number of Equity Equivalents to be issued, by written notice to the Company and
the Other Stockholders within 10 days after the Acceptance Period. In the event
that the Equity Equivalents to be issued at any time as contemplated by this
Section 6 are either voting securities of the Company or securities which are
convertible, exercisable or otherwise exchangeable for voting securities of the
Company and for any reason one or more of the Stockholders determines in its
sole discretion that it would be detrimental to such Stockholder or its
affiliates to purchase such securities as provided for hereby, then the Company
shall make available to any such Stockholder an amount of alternative securities
equal to the amount of such Equity Equivalents as such Stockholder is entitled
to purchase pursuant to the terms hereof which are identical to such Equity
Equivalents in all respects except for the fact that such alternate securities
shall be non-voting securities or convertible, exercisable or otherwise
exchangeable for non-voting securities (the "Alternative Securities").
(b) If effective acceptance shall not be received pursuant to
paragraph (a) above in respect of all the Equity Equivalents or Alternative
Securities, then the Company may, at its election, during a period of one
hundred and twenty (120) days following the expiration of the
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<PAGE> 11
Acceptance Period, sell and issue the remaining Equity Equivalents to another
Person at a price and upon terms no more favorable to such person than those
stated in the Company's Notice of Intention to Sell; provided, however, that
failure by a Stockholder to exercise its option to purchase with respect to one
offering, sale and issuance of Equity Equivalents shall not affect its option to
purchase Equity Equivalents or rights to acquire Equity Equivalents in any
subsequent offering, sale and purchase. In the event the Company has not sold
the Equity Equivalents, or entered into a binding agreement to sell the Equity
Equivalents, within such one hundred and twenty (120) day period, the Company
shall not thereafter issue or sell any Equity Equivalents without first offering
such securities to each Stockholder in the manner provided in Section 6(a)
hereof.
(c) If a Stockholder gives the Company notice, pursuant to the
provisions of this Section 6, that such Stockholder desires to purchase any of
the Equity Equivalents or Alternative Securities, payment therefor shall be by
check or wire transfer, against delivery of the securities at the executive
offices of the Company within ten (10) days after giving the Company such
notice, or, if later, the closing date as mutually agreed between the Company
and such Stockholder for the sale of such Equity Equivalents or Alternative
Securities. In the event that any such proposed issuance is for a consideration
other than cash, such Stockholders will be entitled to pay cash for each share
or other unit, in lieu of such other consideration, in the amount determined in
good faith by the Board to constitute the fair value of such consideration other
than cash to be paid per share or other unit.
(d) The right of first refusal contained in this Section 6
shall not apply to (i) the issuance of shares of Common Stock as a stock
dividend or upon any subdivision or stock split of the outstanding shares of
Common Stock; (ii) the issuance of shares of Common Stock upon conversion of any
shares of convertible securities; (iii) the issuance of shares of Common Stock,
or the grant of options, warrants or rights to subscribe for shares of Common
Stock, to officers, directors and other employees of the Company and to
consultants to the Company pursuant to stock options that are issued pursuant to
the Stock Option Plan or such other options that are granted to such persons and
that are approved by a majority of the entire Board (in each case, as such
number of shares may be adjusted from time to time in accordance with the terms
of the Stock Option Plan or agreements evidencing grants thereunder); or (iv)
the issuance of Common Stock pursuant to any under-written public offering.
(e) The Company and each Stockholder represents and warrants
that it is not a party to any agreement other than this Agreement with any
persons relating to any right of first refusal or preemptive right upon
issuances of Equity Equivalents.
(f) This Section 6 shall automatically terminate upon the
consummation of a Qualified Public Offering.
7. Covenant to Pledge. Each Stockholder (other than Holdings)
agrees that, at the request of Sentinel, they shall pledge their Company Shares
to a financial institution designated by Sentinel, to the same proportionate
extent that Sentinel pledges its Company Shares to such institution pursuant to
debt facilities entered into by the Company.
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<PAGE> 12
8. Legend. In addition to any legend required by any other
Transaction Document, each certificate evidencing Company Shares and each
certificate issued in exchange for or upon the transfer of any Company Shares
(if such shares remain Company Shares as defined herein after such transfer)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON ______________, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO A STOCKHOLDERS AGREEMENT DATED AS OF JULY 1, 1998,
BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND
CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY OF SUCH
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The Company shall imprint such legend on certificates evidencing Company Shares
outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be Company
Shares.
9. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Company Shares in violation of any provision of this
Agreement shall be null and void, and the Company shall not record such Transfer
on its books or treat any purported transferee of such Company Shares as the
owner of such shares for any purpose.
10. Transfer of Company Shares.
(a) Company Shares are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) subject to the
provisions of Section 4 and Section 5 above, Rule 144 or Rule 144A (or any
similar rule or rules then in effect) of the SEC if such rule is available, and
(iii) subject to Section 4, Section 5 and Section 10(b) below, any other legally
available means of Transfer.
(b) In connection with the Transfer of any Company Shares
other than a Transfer described in clause (i) or (ii) of Section 10(a) above or
a Transfer to a Permitted Transferee, the holder thereof shall deliver written
notice to the Company describing in reasonable detail the Transfer or proposed
Transfer, together with an opinion of counsel reasonably acceptable to the
Company to the effect that such Transfer of Company Shares may be effected
without registration of such Company Shares under the Securities Act. No
Transfer or issuance of any Company Shares shall be permitted unless and until
the prospective transferee agrees to become a party to this Agreement and be
bound by all the terms and conditions hereof by executing and delivering to the
Company, a joinder to this Agreement in the form attached hereto as Exhibit A
(the "Joinder
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Agreement") or, if applicable, in the form of the Joinder Agreement as amended
as provided in Section 4(d).
(c) Upon the request of a holder of Company Shares, the
Company shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the SEC.
11. Financial Statements and Other Information. The Company
shall deliver to each Stockholder who holds at least 5% of the Stockholder
Shares (except the information described in clause (b) below shall be delivered
to all Stockholders):
(a) within 30 days after the end of each month (or equivalent
fiscal period of the Company), a copy of the unaudited consolidated balance
sheets of the Company as of the end of such month (or equivalent fiscal period
of the Company) and the related consolidated statements of income and statements
of cash flows and changes in stockholders equity for such month (or equivalent
fiscal period of the Company) and for the portion of the fiscal year ending as
of the end of such month (or equivalent fiscal period of the Company), all in
reasonable detail and prepared in accordance with GAAP, consistently applied
(subject to normal year-end adjustments and the exclusion of such footnotes as
may be required in accordance with GAAP, consistently applied), accompanied by
comparisons to the Company's annual budget and to the corresponding periods in
the preceding fiscal year, including a management discussion and analysis of
such financial statements and comparisons;
(b) within 90 days after the close of each fiscal year, a copy
of the audited consolidated financial statements of the Company, consisting of
consolidated balance sheets as of the end of such fiscal year and consolidated
statements of income and statements of cash flows and changes in stockholders'
equity for such fiscal year, setting forth in comparative form in each case the
consolidated figures for the previous fiscal year-end, which financial
statements shall be prepared in accordance with GAAP, consistently applied,
certified without qualification by a "big- six" accounting firm selected by the
Company, accompanied by (a) a management discussion and analysis of such
financial statements and comparisons, and (b) such firm's annual management
letter to the Board;
(c) not less than 30 days following the beginning of each
fiscal year, projected consolidated statements of cash flows and changes in
stockholders equity of the Company and its Subsidiaries including summary
details of cash disbursements (including capital expenditures) and a summary of
Indebtedness (as defined in the Recapitalization Agreement) in each case for
such ensuing fiscal year, on a monthly basis;
(d) promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any Tribunal or other Government Entity
affecting the Company or any of its Subsidiaries which, if determined adversely
to any Person, could have a Material Adverse Effect (as defined in the
Recapitalization Agreement);
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(e) promptly after the sending or filing thereof, copies of
all regular, periodic or special reports, and all registration statements, which
the Company files with the SEC or any national securities exchange or securities
market;
(f) promptly after the furnishing thereof, copies of any
statement or report furnished to any holder of indebtedness pursuant to the
terms of any indenture, loan or credit or similar agreement, and not otherwise
required to be furnished pursuant to any other paragraph of this Section 11; and
(g) such other information respecting the Company's, or its
Subsidiaries' business, financial condition or prospects as any Stockholder may,
from time to time, reasonably request in writing.
Provided that the obligations of the Company contained in this Section
11 (other than those obligations contained in clause (e) above) shall continue
until the earlier of the consummation of a Public Sale, Approved Sale, or a
Qualified Public Offering.
12. Amendment and Waiver. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company and the holders of not
less than 51% of the Stockholder Shares, respectively. Notwithstanding anything
to the contrary, no modification, amendment or waiver or any provision of this
Agreement that adversely affects the rights or obligations of any Stockholder
relative to the rights and obligations of the Other Stockholders hereunder shall
be effective against such Stockholder unless approved in writing by such
Stockholder. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
13. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
14. Entire Agreement. Except as otherwise expressly set forth
herein, this document and the other Transaction Documents embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
-14-
<PAGE> 15
15. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Company Shares and the respective permitted successors and
assigns of each of them, so long as they hold Company Shares.
16. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
17. Remedies. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company, and may in its sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
18. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given at such time as (i)
actually received, when delivered personally, (ii) mailed by certified or
registered mail, return receipt requested and postage prepaid, or sent via a
nationally recognized overnight courier, or (iii) sent via facsimile to the
recipient accompanied by a certified or registered mailing. Such notices,
demands and other communications will be sent to the Company and the
Stockholders at the address set forth below or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party.
To the Company:
Roma Restaurant Holdings, Inc.
c/o Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, TX 75243
Attention: Robert Page
Facsimile: (214) 343-7725
With copies (which shall not constitute notice to the Company)
to:
Sentinel Capital Partners, L.P.
777 Third Avenue, 32nd Floor
New York, NY 10017
Attention: David S. Lobel
John F. McCormack
Facsimile: (212) 688-6513
-15-
<PAGE> 16
and
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, NY 10022
Attention: Frederick Tanne, Esq.
Facsimile: (212) 446-4900
To Sentinel or Sentinel II:
Sentinel Capital Partners, L.P.
777 Third Avenue, 32nd Floor
New York, NY 10017
Attention: David S. Lobel
John F. McCormack
Eric D. Bommer
Facsimile: (212) 688-6513
with a copy (which shall not constitute notice to Sentinel)
to:
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, NY 10022
Attention: Frederick Tanne, Esq.
Facsimile: (212) 446-4900
To Omega:
Omega Partners, L.P.
One Palmer Square
Suite 425
Princeton, NJ 08542
To the Travelers Group:
-16-
<PAGE> 17
To Holdings:
NPC Restaurant Holdings, Inc.
c/o NPC International, Inc.
14400 College Blvd., Suite 201
Lenexa, KS 66215
Attention: Troy D. Cook
Facsimile: (913) 327-5849
With a copy (which shall not constitute notice to Holdings)
to:
John A. Granda, Esq.
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, MO 64106
Facsimile: (816) 691-3495
19. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
20. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-17-
<PAGE> 18
EXHIBIT A
FORM OF JOINDER TO
STOCKHOLDERS AGREEMENT
THIS JOINDER to the Stockholders Agreement, dated as of
___________, 199_ by and among Roma Restaurant Holdings, Inc., a Delaware
corporation (the "Company"), and certain stockholders of the Company (the
"Agreement"), is made and entered into as of _________ by and between the
Company and _________________ ("Holder"). Capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of Common Stock
("Holder Stock"), and the Agreement and the Company requires Holder, as a holder
of Common Stock, to become a party to the Agreement, and Holder agrees to do so
in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Joinder hereby
agree as follows:
1. Agreement to be Bound. Holder hereby agrees that upon
execution of this Joinder, it shall become a party to the Agreement and shall be
fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement as though an original party thereto and shall be deemed a
Stockholder for all purposes thereof. In addition, Holder hereby agrees that all
Common Stock held by Holder shall be deemed Company Shares for all purposes of
the Agreement.
2. Successors and Assigns. Except as otherwise provided
herein, this Joinder shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and Holder and any subsequent
holders of Holder Stock and the respective successors and assigns of each of
them, so long as they hold any shares of Holder Stock.
3. Counterparts. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Notices. For purposes of Section 18 of the Agreement, all
notices, demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
A-1
<PAGE> 19
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
DELAWARE.
6. Descriptive Headings. The descriptive headings of this
Joinder are inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
A-2
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
ROMA RESTAURANT HOLDINGS, INC.
By: /s/ Robert B. Page
------------------------------
Name: Robert B. Page
Title: President
SENTINEL CAPITAL PARTNERS, L.P.
By Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ David S. Lobel
------------------------------
Name: David S. Lobel
Title: Secretary
SENTINEL CAPITAL PARTNERS II, L.P.
By Sentinel Partners II, L.P.
Its: General Partner
By: Sentinel Partners II, Inc.
Its: General Partner
By: /s/ David S. Lobel
------------------------------
Name: David S. Lobel
Title: President & Secretary
OMEGA PARTNERS, L.P.
By: /s/ Michael J. Myers
------------------------------
Name: Michael J. Myers
Title: General Partner
-18-
<PAGE> 21
PROVIDENT FINANCIAL GROUP, INC.
By: /S/
------------------------------
Name:
Title:
TRAVELERS CASUALTY AND SURETY
COMPANY
By: /S/ Craig H. Farnsworth
------------------------------
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE TRAVELERS INSURANCE COMPANY
By: /S/ Craig H. Farnsworth
------------------------------
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE TRAVELERS LIFE AND ANNUITY
COMPANY
By: /S/ Craig H. Farnsworth
------------------------------
Name: Craig H. Farnsworth
Title: 2nd Vice President
THE PHOENIX INSURANCE COMPANY
By: /S/ Craig H. Farnsworth
------------------------------
Name: Craig H. Farnsworth
Title: 2nd Vice President
NPC RESTAURANT HOLDINGS, INC.
By: /S/ Troy D. Cook
------------------------------
Name:
Title:
-19-
<PAGE> 1
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as
of July 1, 1998 by and among Roma Restaurant Holdings, Inc. (formerly known as
Romacorp, Inc.), a Delaware corporation, (the "Company"), NPC Restaurant
Holdings, Inc., a Delaware corporation ("Holdings"), and Sentinel Capital
Partners, L.P., a Delaware limited partnership ("Sentinel"), Sentinel Capital
Partners II, L.P. ("Sentinel"), Omega Partners, L.P. ("Omega"), Provident
Financial Group, Inc. ("Provident") and Travelers Casualty and Surety Company
("Travelers I"), The Travelers Insurance Company ("Travelers II"), The Travelers
Life and Annuity Company ("Travelers III") and The Phoenix Insurance Company
(together with Travelers I, Travelers II, and Travelers III, the "Travelers
Group", and Sentinel II, Omega, Provident and the Travelers Group shall be
referred to as the "Investors"). Holdings and the Investors are collectively
referred to as the "Stockholders" and individually as a "Stockholder."
Capitalized terms used herein but not otherwise defined have the meaning set
forth in Section 1.
WHEREAS, the Company, Sentinel and Holdings are parties to a
Recapitalization Agreement dated as of April 24, 1998 (the "Recapitalization
Agreement"), as amended, and certain rights and obligations under such agreement
have been assigned (the "Assignment") to Sentinel II, Omega, Provident and the
Travelers Group. In order to induce Sentinel and Holdings to enter into the
Recapitalization Agreement and to induce Sentinel II, Omega, Provident and the
Travelers Group to accept the Assignment, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition precedent to each of the Investors' and Holdings'
obligations under the Recapitalization Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. Definitions. As used herein, the following terms shall have
the following meanings.
"Affiliate" shall mean, as to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Common Stock" means, collectively, the common stock of the
Company, par value $0.01 per share, and any capital stock of the Company issued
or issuable with respect thereto by way
<PAGE> 2
of a stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Registrable Securities" means (i) any shares of Common Stock
acquired by, issued or issuable to, or otherwise owned by, any of the parties
hereto prior to, on or following the date hereof, and (ii) any capital stock of
the Company issued or issuable with respect to the securities referred to in
clause (i) above in connection with a combination or split of shares,
recapitalization, merger, consolidation or other reorganization. For purposes of
this Agreement, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company.
"Rule 144" means Rule 144 under the Securities Act (or any
similar rule then in force).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Sentinel Registrable Securities" means the Registrable
Securities originally issued to Sentinel, Sentinel II or their Affiliates
pursuant to the Recapitalization Agreement or otherwise acquired by or issued to
Sentinel, Sentinel II or their Affiliates on or after the date hereof.
"Transitional Financial and Accounting Services Agreement"
means that Transitional Financial and Accounting Services Agreement by and among
the Company and NPC Management, Inc., dated as of the date hereof.
-2-
<PAGE> 3
2. Demand Registrations.
(a) Requests for Registration. Subject to Section 2(b) and
2(c) below, at any time and from time to time, the holders of a majority of the
Sentinel Registrable Securities may request registration, whether underwritten
or otherwise, under the Securities Act of all or part of the Registrable
Securities held by such holders, in each case on Form S-1 or any similar or
successor long-form registration (collectively, "Long-Form Registrations") or,
if available, on Form S-2 or S-3 or any similar short-form registration
("Short-Form Registrations"). All registrations requested pursuant to this
Section 2(a) are referred to herein as "Demand Registrations". Each request for
a Demand Registration shall specify the approximate number of Registrable
Securities requested to be registered and the anticipated per share price range
for such offering. Within ten days after receipt of any such request for a
Demand Registration, the Company shall give written notice of such requested
registration to all other holders of Registrable Securities and shall include
(subject to the provisions of this Agreement) in such registration, all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Company's
notice.
(b) Long-Form Registrations. The holders of a majority of the
Sentinel Registrable Securities shall be entitled to request an unlimited number
of Long-Form Registrations, in which the Company shall pay all Registration
Expenses whether or not the related registration statements are filed or become
effective.
(c) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 2(b), holders of Registrable
Securities shall be entitled to request an unlimited number of Short-Form
Registrations in which the Company shall pay all Registration Expenses whether
or not the related registration statements are filed or become effective. Demand
Registrations shall be Short-Form Registrations whenever the Company is
permitted to use any applicable short form. After the Company has become subject
to the reporting requirements of the Exchange Act, the Company shall use its
best efforts to make Short-Form Registrations available for the sale of
Registrable Securities.
(d) Priority on Demand Registrations. The Company shall not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of at least a
majority of the Sentinel Registrable Securities requested to be included in such
registration. If a Demand Registration is an underwritten offering and the
managing underwriter advise the Company in writing that in their opinion the
number of Registrable Securities and, if permitted hereunder, other securities
requested to be included in such offering, exceeds the number of Registrable
Securities and other securities, if any, which can be sold therein without
adversely affecting the marketability of the offering (including price), the
Company shall include in such registration (i) first, the number of Registrable
Securities requested to be included
-3-
<PAGE> 4
in such registration which in the opinion of such underwriter(s) can be sold
without adversely affecting the marketability and pricing of the offering, pro
rata, if necessary, among the holders of Registrable Securities based on the
number of shares of Registrable Securities held by each such holder and (ii)
second, any other securities of the Company requested to be included in such
registration pro rata, if necessary, on the basis of the number of shares of
such other securities owned by each such holder. Any Persons other than holders
of Registrable Securities who participate in Demand Registrations which are not
at the Company's expense, must pay their share of the Registration Expenses as
provided in Section 6 hereof.
(e) Restrictions on Demand Registrations. The Company shall
not be obligated to effect any Demand Registration within three months after the
effective date of a previous Demand Registration.
(f) Selection of Underwriters. In the case of a Demand
Registration which is an underwritten offering, the holders of a majority of the
Sentinel Registrable Securities requested to be included in such Demand
Registration shall have the right to select the investment banker(s) and
manager(s) to administer the offering.
(g) Other Registration Rights. Except as provided in this
Agreement, the Company shall not grant to any Persons the right to request the
Company to register any of its equity securities or any securities convertible
or exchangeable into or exercisable for such securities, without the prior
written consent of the holders of a majority of the Sentinel Registrable
Securities.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration, a registration on Form S-4 or S-8 or any similar or
successor form or in connection with a registration the primary purpose of which
is to register debt securities (i.e., in connection with a so-called "equity
kicker")), and the registration form to be used may be used for the registration
of Registrable Securities (a "Piggyback Registration"), the Company shall give
prompt written notice to all holders of Registrable Securities of its intention
to effect such a registration. The Company shall include in any such
registration by it all Registrable Securities with respect to which it has
received written requests for inclusion therein within 20 days after the receipt
of the Company's notice. Notwithstanding the foregoing, in connection only with
the initial registered public offering of the Company's securities which
offering is an underwritten primary offering, no Registrable Securities shall be
included in such registration without the prior written consent of the managing
underwriter(s).
(b) Piggyback Expenses. The Registration Expenses of the
holders of Registrable Securities shall be paid by the Company.
-4-
<PAGE> 5
(c) Priority on Primary Registrations. Subject to paragraph
3(a), if a Piggyback Registration is an underwritten primary registration on
behalf of the Company, and the managing underwriter(s) advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability and pricing of the offering, the
Company shall include in such registration (i) first, the securities that the
Company proposes to sell, (ii) second, the number of Registrable Securities
requested to be included in such registration and which, in the opinion of the
managing underwriter(s), can be sold in such offering without adversely
affecting the marketability of such offering, pro rata among the holders of such
Registrable Securities on the basis of the number of shares of Registrable
Securities owned by each such holder, and (iii) third, other securities, if any,
requested to be included in such registration not covered by clause (i) and (ii)
above.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities (which registration was consented to pursuant to
Section 2(g) above), and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability and pricing of the offering, the Company
shall include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
number of Registrable Securities requested to be included in such registration,
and which, in the opinion of the managing underwriter(s), can be sold in such
offering without adversely affecting the marketability and pricing of such
offering, pro rata among the holders of such Registrable Securities on the basis
of the number of shares of Registrable Securities owned by each such holder, and
(iii) third, other securities, if any, requested to be included in such
registration not covered by clause (i) or (ii) above.
(e) Selection of Underwriters. If any Piggyback Registration
is an underwritten offering, the investment banker(s) and manager(s) for the
offering shall be selected by the Company and shall be acceptable to the holders
of a majority of the Sentinel Registrable Securities.
(f) Other Registrations. If (i) the Company has previously
filed a registration statement with respect to Registrable Securities pursuant
to Section 2 or this Section 3, and if such previous registration has not been
withdrawn or abandoned, the Company shall not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Forms S-4 or S-8 or any successor forms), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least six months has elapsed from the effective date of such
previous registration.
-5-
<PAGE> 6
4. Holdback Agreements.
(a) Each holder of Registrable Securities hereby agrees not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 180-day period beginning on the effective date of any Demand
Registration or Piggyback Registration for a public offering to be underwritten
on a firm commitment basis in which Registrable Securities are included (except
as part of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) The Company agrees (i) not to effect any public sale or
distribution of its respective equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the seven days
prior to and during the 180-day period beginning on the effective date of any
underwritten Demand Registration or Piggyback Registration for Registrable
Securities (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor forms), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to cause each holder of Registrable Securities and each other holder of at least
5% (on a fully diluted basis) of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such equity
securities, purchased from the Company at any time after the date hereof (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
5. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than six months and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
-6-
<PAGE> 7
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
(i.e., service of process which is not limited solely to securities law
violations) in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
promptly prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company, are then
listed and, if not so listed, to be listed on the Nasdaq National Market
("Nasdaq Market") and, if listed on the Nasdaq Market, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a Nasdaq "National Market System security" within the
meaning of Rule 11Aa2-1 of the SEC or, failing that, to secure Nasdaq Market
authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the National
Association of Securities Dealers;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable
-7-
<PAGE> 8
Securities being sold or the underwriter(s), if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a combination of
shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first day of the first full
calendar quarter of the Company, as applicable, after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(k) permit any holder of Registrable Securities which holder,
in its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company, in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Company shall use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(m) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and
(n) obtain a "cold comfort" letter from the independent public
accountants of the Company in customary form and covering such matters of the
type customarily covered by "cold comfort" letters as the holders of a majority
of the Registrable Securities being sold reasonably request.
-8-
<PAGE> 9
If any such registration or comparable statement refers to any holder by name or
otherwise as the holder of any securities of the Company, and if, in its sole
and exclusive judgment, such holder is or might be deemed to be a controlling
Person of the Company, such holder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to such holder
and presented to the Company, in writing, to the effect that the holding by such
holder of such securities is not to be construed as a recommendation by such
holder of the investment quality of the Company's securities covered thereby and
that such holding does not imply that such holder shall assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such holder by name or otherwise is not required by the Securities
Act or any similar Federal statute then in force, the deletion of the reference
to such holder; provided, that with respect to this clause (ii) such holder
shall furnish to the Company, an opinion of counsel to such effect, which
opinion and counsel shall be reasonably satisfactory to the Company.
6. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company, and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company, shall be borne by the Company, with respect to
any registration, proposed or otherwise, of its securities.
(b) In connection with each Demand Registration and each
Piggyback Registration, the Company shall reimburse the holders of Registrable
Securities covered by such registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities initially requesting such registration.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities and their respective partners,
members, officers and directors, and each Person who controls each such holder
(within the meaning of the Securities Act) and their respective partners,
members, officers and directors, against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse such holder, partner, member, director, officer or controlling
Person for any legal or other expenses reasonably incurred by such holder,
director, officer or controlling Person in connection with the investigation or
defense of such loss, claim, damage, liability or expense, except insofar as the
same
-9-
<PAGE> 10
are caused by or contained in any information furnished in writing to the
Company by such holder expressly for use therein (other than financial,
accounting and other information provided pursuant to the Transitional Financial
and Accounting Agreement, unless and to the extent such losses, claims, damages,
liabilities and expenses are caused by the gross negligence or wilful misconduct
of NPC Management or its employees) or by such holder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company
in connection with any registration of Registrable Securities, and its members,
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act), as applicable, against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in such registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder (which information shall not
include financial, accounting and other information provided pursuant to the
Transitional Financial and Accounting Agreement, unless and to the extent such
losses, claims, damages, liabilities and expenses are caused by the gross
negligence or wilful misconduct of NPC Management or its employees); provided,
that the obligation to indemnify shall be individual to each holder and shall be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in
-10-
<PAGE> 11
the reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any partner, member, officer, director or
controlling Person (within the meaning of the Securities Act) of such
indemnified party and shall survive the transfer of securities. The Company, to
the extent so liable, also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the event
that the Company's indemnification is unavailable for any reason.
8. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements; provided, that no holder of Registrable Securities included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding such holder and such holder's intended method of
distribution.
9. Rule 144 Reporting. With a view to making available to the
holders of Registrable Securities the benefits of certain rules and regulations
of the SEC which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to use its best efforts to:
(a) make and keep current public information available, within
the meaning of Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after it has become subject to the reporting
requirements of the Exchange Act;
(b) file with the SEC, in a timely manner, all reports and
other documents required under the Securities Act and Exchange Act (after it has
become subject to such reporting requirements); and
(c) so long as any party hereto owns any Registrable
Securities, furnish to such Person forthwith upon request a written statement as
to its compliance with the reporting requirements of said Rule 144 (at any time
commencing 90 days after the effective date of the first registration filed by
the Company for an offering of its securities to the general public), the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); a copy of its most recent annual or quarterly
report; and such other reports and
-11-
<PAGE> 12
documents as such Person may reasonably request in availing itself of any rule
or regulation of the SEC allowing it to sell any such securities without
registration.
10. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt requested and
postage prepaid, or sent via a nationally recognized overnight courier, or sent
via facsimile to the recipient. Such notices, demands and other communications
shall be sent to the address indicated below:
To the Company:
Roma Restaurant Holdings, Inc.
c/o Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, TX 75243
Attention: Robert Page
Facsimile: (214) 343-7725
With copies (which shall not constitute notice to the
Company) to:
Sentinel Capital Partners, L.L.C.
777 Third Avenue, 32nd Floor
New York, NY 10017
Facsimile: (212) 688-6513
Attention: David S. Lobel
John F. McCormack
and
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022-4675
Facsimile: (212) 446-4900
Attention: Frederick Tanne, Esq.
-12-
<PAGE> 13
To Sentinel or Sentinel II:
Sentinel Capital Partners, L.L.C.
777 Third Avenue, 32nd Floor
New York, NY 10017
Facsimile: (212) 688-6513
Attention: John F. McCormack
With a copy (which shall not constitute notice to
Sentinel or Sentinel II, as the case may be) to:
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022-4675
Facsimile: (212) 446-4900
Attention: Frederick Tanne, Esq.
To Omega:
Omega Partners, L.P.
One Palmer Square
Suite 425
Princeton, NJ 08542
To the Travelers Group:
To Holdings:
NPC Restaurant Holdings, Inc.
C/o: NPC International, Inc.
14400 College Blvd., Suite 201
Lenexa, KS 66215
Attention: Troy D. Cook
Facsimile: (913) 327-5849
With a copy (which shall not constitute notice to
Holdings) to:
-13-
<PAGE> 14
John A. Granda, Esq.
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, MO 64106
Facsimile: (816) 691-3495
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not enter
into any agreement which is inconsistent with or violates the rights granted to
the holders of this Agreement.
(b) Remedies. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of (i) the Company, (ii) the holders of a majority of the
Sentinel Registrable Securities, and (iii) the holders of a majority of the
Registrable Securities other than Sentinel Registrable Securities.
(d) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(e) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
-14-
<PAGE> 15
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(H) GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
* * * * *
-15-
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
ROMA RESTAURANT HOLDINGS, INC.
By: /s/ Robert B. Page
-------------------------------------
Name: Robert B. Page
Title: President
SENTINEL CAPITAL PARTNERS, L.P.
By: Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ David S. Lobel
-------------------------------------
Name: David S. Lobel
Title: Secretary
SENTINEL CAPITAL PARTNERS II, L.P.
By Sentinel Partners II, L.P.
Its: General Partner
By: Sentinel Partners II, Inc.
Its: General Partner
By: /s/ David S. Lobel
-------------------------------------
Name: David S. Lobel
Title: President & Secretary
<PAGE> 17
OMEGA PARTNERS, L.P.
By: /s/ Michael J. Myers
-------------------------------------
Name: Michael J. Myers
Title: General Partner
TRAVELERS CASUALTY AND SURETY COMPANY
By: /s/ Craig H. Farnsworth
-------------------------------------
Name: CRAIG H. FARNSWORTH
Title: 2nd Vice President
THE TRAVELERS INSURANCE COMPANY
By: /s/ Craig H. Farnsworth
-------------------------------------
Name: CRAIG H. FARNSWORTH
Title: 2nd Vice President
THE TRAVELERS LIFE AND ANNUITY COMPANY
By: /s/ Craig H. Farnsworth
-------------------------------------
Name: CRAIG H. FARNSWORTH
Title: 2nd Vice President
THE PHOENIX INSURANCE COMPANY
By: /s/ Craig H. Farnsworth
-------------------------------------
Name: CRAIG H. FARNSWORTH
Title: 2nd Vice President
-17-
<PAGE> 18
NPC RESTAURANT HOLDINGS, INC.
By: /s/ Troy Cook
-------------------------------------
Name:
Title:
PROVIDENT FINANCIAL GROUP, INC.
By: /s/
-------------------------------------
Name:
Title:
-18-
<PAGE> 1
EXHIBIT 10.3
TRANSITIONAL FINANCIAL AND ACCOUNTING
SERVICES AGREEMENT
THIS TRANSITIONAL FINANCIAL AND ACCOUNTING SERVICES AGREEMENT (the
"Agreement"), made as of this 1st day of July, 1998 (the "Closing Date"), by and
between NPC MANAGEMENT, INC., a Kansas corporation ("NPC Management"); and
ROMACORP, INC., a Delaware corporation ("Romacorp"). Romacorp and NPC Management
are collectively referred to herein as the "Parties" and individually as a
"Party."
WITNESSETH:
WHEREAS, NPC Management is a wholly-owned subsidiary of NPC
International, Inc., a Kansas corporation ("Parent"), and provides management,
accounting, financial reporting services and information services to Parent and
certain of Parent's affiliates;
WHEREAS, Parent, NPC Restaurant Holdings, Inc., a Delaware corporation
and wholly-owned subsidiary of Parent, and Sentinel Capital Partners, L.P., a
Delaware limited partnership ("Sentinel") have entered into a Recapitalization
Agreement, dated April 24, 1998 ("Recapitalization Agreement");
WHEREAS, pursuant to Section 10.2(i) of the Recapitalization Agreement,
Parent has agreed to cause the execution and delivery of this Agreement on the
Closing Date, whereby NPC Management would provide certain services to Romacorp
and the Romacorp Affiliates (as defined below) to the same extent currently
provided by NPC Management to Romacorp and the Romacorp Affiliates in the
ordinary course of Romacorp's and the Romacorp Affiliates' businesses consistent
with past practices for a period of up to one year;
NOW, THEREFORE, for good, valid and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:
1. Scope of Services.
1.1 General. NPC Management hereby agrees to provide Romacorp
and the Romacorp Affiliates with the services, the parameters of which are
described in Annex A, which consist of the management, accounting, financial
reporting services and information services provided by NPC Management to
Romacorp in the ordinary course of Romacorp business consistent with past
practices (the "Services") , provided that the Services shall not exceed in
scope that amount or level of Services that NPC Management and its affiliates
provides to Romacorp and the Romacorp Affiliates as of the Closing Date, or has
provided during the twelve-month period prior to the Closing Date and shall not
include Services that have been assumed during such twelve-month period by
Romacorp, the Romacorp Affiliates or any of the businesses, personnel and
resources contributed to Romacorp in contemplation of the
<PAGE> 2
Recapitalization Agreement. "Romacorp Affiliates" shall mean (i) the
corporations, partnerships and other entities, the equity of which is at the
applicable time directly or indirectly wholly owned by Romacorp, (ii) Roma
Huntington Beach Associates, and (iii) Roma Addison Associates.
1.2 Legal Services. After the date hereof, NPC Management and
its affiliates will continue to require the services of the legal staff of Roma
Dining LP (a Romacorp Affiliate), principally David Short, for a period of up to
one year. NPC Management will reimburse Roma Dining LP for these services in
accordance with the following schedule based upon detailed billings completed by
Mr. Short for services provided to NPC Management and its affiliates:
David Short $75.00 per hour
Legal Assistant $25.00 per hour
1.3 Requirements Regarding Software. During the term of this
Agreement, NPC Management may develop upgrades to, and will endeavor to maintain
a consistent code base for, the NPC Software (as defined below) which will be
used in connection with the Services provided by NPC Management. Accordingly,
Romacorp shall, and shall cause the Romacorp Affiliates to, accept all such
changes to the NPC Software, provided that NPC Management will not implement any
such changes that would materially adversely affect or cause undue hardship to
the business of Romacorp and the Romacorp Affiliates or which would prevent
Romacorp or the Romacorp Affiliates from being able to utilize the NPC Software.
2. Software Maintenance.
2.1 License of NPC Software.
(a) Upon termination of this Agreement, NPC
Management will grant to Romacorp a nonexclusive, nontransferable,
royalty-free, perpetual license to use its proprietary internally
developed and owned General Ledger Software and Back-Office Software,
which in any case does not include the POS System (collectively, the
"NPC Software") which was developed and is owned by NPC Management.
Romacorp agrees that the NPC Software licensed hereby shall be solely
for the use of Romacorp and the Romacorp Affiliates in the conduct of
Romacorp's current line of business (casual dining rib restaurant
business), as conducted on the date hereof, provided that such
limitation on use shall not preclude Romacorp or the Romacorp
Affiliates from increasing the number of stores owned by Romacorp or
the Romacorp Affiliates and using the NPC Software in and in connection
with those additional stores. Neither Romacorp nor any Romacorp
Affiliate will (i) license, sell, give or otherwise transfer the NPC
Software, any derivative thereof, or any right to use thereof to any
person, or (ii) copy the NPC Software other than for the use of
Romacorp and the Romacorp Affiliates as provided for herein. The
license granted herein shall be subject to any vendor licensed
software, which is not being licensed hereby, and therefor is subject
to completion of the rewrite of certain software
<PAGE> 3
currently being undertaken by NPC Management which is intended to limit
or eliminate the use of certain vendor licensed software.
(b) "General Ledger Software" is a group of AS400
programs, in source code and executable code forms, developed and owned
by NPC Management to support the various home office accounting and
payroll functions. This does not include the Fixed Asset System or any
other vendor licensed programs.
(c) "Back-Office Software" is a Windows 95 based
software package developed and owned by NPC Management which performs
management and administration functions (i.e., payroll, inventory, cash
sheet, etc.). Copies of the Back-Office Software will be provided in,
and the license granted in Section 2.1 shall only be for, the
executable form during the term of this Agreement and, if executed,
during the term of the Software Management Agreement. If the Software
Management Agreement is not executed, the source code of the
Back-Office Software will be provided to Romacorp and the Romacorp
Affiliates and included in the license granted in Section 2.1.
(d) "POS System" is software for one or more personal
computers, touch monitors and printers running Progressive Software's
point of sale software. This system is used in the restaurant to record
the customer sale and is also referred to as the "Front of House"
system.
(e) Romacorp acknowledges and agrees that during the
term of this Agreement, it may be required to acquire for its use and
the use of the Romacorp Affiliates XcelleNet software and Server
licenses to operate the Back-Office Software. At the termination of
this Agreement, Romacorp may purchase XcelleNet software and Server
licenses to poll its stores. Upon the request of Romacorp, NPC
Management shall provide reasonable assistance to Romacorp to obtain
such software and licenses. If Romacorp uses software other than
XcelleNet software for polling individual stores, NPC will not offer
such support for the Back-Office Software.
(f) During the term of this Agreement and thereafter
during the term of any Software Management Agreement, all systems
running copies of Back-Office Software shall utilize hardware and a
configuration approved by NPC Management (such approval not to be
unreasonably withheld or delayed) to ensure system compatibility.
(g) ROMACORP AGREES TO TAKE THE NPC SOFTWARE LICENSED
HEREBY "AS-IS" AND IN THE FORM AND CONDITION SUCH SOFTWARE EXISTS ON
THE DATE HEREOF AND IS BEING USED BY ROMACORP ON THE DATE HEREOF. NPC
MANAGEMENT MAKES NO WARRANTIES REGARDING THE NPC SOFTWARE, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NPC
<PAGE> 4
MANAGEMENT IS NOT OBLIGATED TO UPGRADE, IMPROVE, ENHANCE OR OTHERWISE
ALTER THE NPC SOFTWARE.
(h) NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, AT LAW OR IN EQUITY, IN NO EVENT SHALL ANY PARTY BE
LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS
PROFITS OR BUSINESS INTERRUPTION) ARISING FROM OR RELATING TO ANY CLAIM
MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF OR THE FAILURE
TO PROVIDE THE SERVICES.
2.2 Post Termination Support.
(a) Romacorp understands and agrees that NPC
Management will provide no support for Romacorp's use of the General
Ledger Software following termination of this Agreement, and that use
of that software after the termination of this Agreement shall be
solely at the risk of Romacorp and the Romacorp Affiliates.
(b) If Romacorp and the Romacorp Affiliates continue
the use of the Back-Office Software after termination of this Agreement
and require technical assistance from NPC Management, Romacorp and NPC
Management may enter into a software maintenance agreement ("Software
Maintenance Agreement") which will provide for Romacorp to pay NPC
Management an annual software maintenance fee to be negotiated by the
parties on a per store and user basis for continued support of the
software, which Software Maintenance Agreement shall have a term to be
negotiated by the parties. The software maintenance fee will be paid to
NPC Management annually and will afford Romacorp and the Romacorp
Affiliates access to NPC Management technical services and any
applicable software updates. After termination of this Agreement, NPC
Management will make its help desk services available to Romacorp only
if Romacorp enters into the Software Maintenance Agreement and such
services shall be made available only so long as the Software
Maintenance Agreement remains in effect, which agreement shall set
forth the scope of the help desk support services and the costs
thereof. Romacorp may from time to time, during the term of this
Agreement and thereafter so long as a Software Maintenance Agreement is
in effect, request system or process changes to the Back-Office
Software. NPC Management will review and consider such requested
changes and will implement such changes to the extent such changes can
be made within the existing structure of NPC Management's organization,
process and systems. Any such requested changes that are unique to
Romacorp will not be undertaken by NPC Management unless the parties
agree to the funding of such development and ongoing support by
Romacorp.
(c) After the termination of this Agreement, if
Romacorp has not
<PAGE> 5
entered into a Software Maintenance Agreement and it requires technical
services regarding the Back-Office Software from NPC Management, NPC
Management may, in its sole discretion, provide technical support
services on an "as time permits" basis at the rate of $350.00 per hour
plus all reasonable out-of-pocket expenses.
2.3 Breach. In the event of any material uncured breach of
Section 2.1(a) of this Agreement by Romacorp, NPC Management may, at its option,
terminate the licenses granted therein and require Romacorp to cease use of the
NPC Software and return all copies to NPC Management.
3. Term. The term of this Agreement shall be for a period commencing on
the Closing Date and continuing until the end of Romacorp's twelfth fiscal
period following the Closing Date, unless earlier terminated by Romacorp upon
written notice to NPC Management by Romacorp, in which case this Agreement shall
terminate at the end of Romacorp's fiscal period ending at least sixty (60) days
after such notice. Either Party to this Agreement may terminate this Agreement
upon notice to the other Party if such other Party has breached or otherwise
failed to perform any of its obligations under this Agreement and failed to cure
such breach or failure within sixty (60) days, in which case this Agreement
shall terminate at the end of Romacorp's fiscal period ending at least sixty
(60) days after such notice.
4. Payment. During the term of this Agreement, Romacorp agrees to pay
NPC Management fees for each fiscal period for which services are provided in an
amount equal to $16,000 per week during such fiscal period, provided that after
not less than thirty (30) day' prior written notice by Romacorp to NPC
Management, Romacorp may discontinue one or more of the following categories of
Services (which, except for the services provided by the Chief Financial Officer
of NPC, are described in Annex A), in which case the foregoing weekly fee will
be reduced by the amount indicated below as of the 30th day following the
receipt of such notice by NPC Management:
<TABLE>
<CAPTION>
Service Fee Reduction
<S> <C>
MIS Service $ 9,100.00
Accounting and Other Service 5,000.00
Chief Financial Officer 2,400.00
</TABLE>
The fee is due fifteen (15) days following the end of each such fiscal period.
Romacorp will reimburse NPC Management for all Reimbursable Expenses within
thirty (30) days of the date of the invoice from NPC Management as outlined in
Annex A. "Reimbursable Expenses" are expenses incurred on behalf of Romacorp or
any Romacorp Affiliate which, consistent with past practices prior to the
Closing Date, have been historically charged to Romacorp or any Romacorp
Affiliate by Parent or NPC Management on a separate company basis. Additionally,
Romacorp will pay for incremental fees incurred as a result of any material
increase in the scope of the Services from the level historically provided as of
the Closing Date but only if such increase in scope was expressly requested by
Romacorp and agreed to by NPC Management.
<PAGE> 6
5. Cooperation and Additional Instruments. Romacorp shall, and shall
cause the Romacorp Affiliates to, execute and obtain at NPC Management's expense
and, upon NPC Management's reasonable request, any additional documents or
instruments reasonably necessary or prudent to effect the intent of this
Agreement. Romacorp shall, and shall cause the Romacorp Affiliates to, cooperate
with NPC Management as reasonably necessary for the performance of NPC
Management's obligations hereunder, including making the services of Romacorp
and Romacorp Affiliates employees reasonably available to NPC Management without
cost.
6. Indemnification. Romacorp shall indemnify and hold NPC Management,
Parent and their affiliates and their respective employees, officers, directors
and agents (the "Indemnitees") harmless from and against any and all Damages (as
hereinafter defined) suffered by any Indemnitee arising out of the Services
provided by NPC Management, including the preparation of financial statements,
except to the extent such Damages arise out of NPC Management's gross negligence
or wilful misconduct or resulting from Romacorp's or any Romacorp Affiliate's
use and possession of the NPC Software. "Damages" means all losses, claims,
damages, costs, fines, penalties, obligations, payments and liabilities
(including those arising out of any action, suit, arbitration, inquiry,
proceeding or investigation by or before any governmental authority or
arbitrator (collectively, an "Action")), together with all reasonable costs and
expenses (including reasonable outside attorneys' fees and reasonable
out-of-pocket expenses) incurred in connection with any of the foregoing, but
shall not include any damages arising out of any interruption of business, loss
of profits, loss of use of facilities, claims of customers, loss of goodwill of
NPC Management or any indirect, incidental or special damages incurred by NPC
Management.
7. Attorneys' Fees. If any Action is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing Party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in such Action or proceeding in
addition to any other relief to which it may be entitled.
8. Miscellaneous Provisions.
8.1 Severability. If any provision of this Agreement as
applied to any Party or to any circumstance shall be held invalid, illegal or
unenforceable by any court of competent jurisdiction, (i) the validity, legality
and enforceability of the remaining provisions of this Agreement will remain in
full force and effect and (ii) the application of such provision to any other
Party or to any other circumstance shall not be affected or impaired thereby.
8.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Parties; provided, however, that neither this Agreement
nor any of the rights or obligations thereunder may be assigned by any Party
without the prior written consent of the other Party.
<PAGE> 7
8.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which, when taken together, shall constitute one and the
same agreement.
8.4 Headings. The table of contents, captions and headings
used in this Agreement are inserted for convenience only and shall not be deemed
to constitute part of this Agreement or to affect the construction or
interpretation hereof.
8.5 Waiver. Any of the terms or conditions of this Agreement
may be waived in writing at any time by the Party which is entitled to the
benefits thereof. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of such provision at any time in the future
or a wavier of any other provision hereof. The rights and remedies of the
Parties are cumulative and not alternative. Neither the failure nor any delay by
any Party in exercising any right, power or privilege under this Agreement or
the documents referred to in this Agreement will operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or privilege.
8.6 No Third-Party Beneficiaries. Nothing in this Agreement,
express or implied, shall create or confer upon any person (including but not
limited to any Employees), other than the Parties or their respective successors
and permitted assigns, any legal or equitable rights, remedies, obligations,
liabilities or claims under or with respect to this Agreement, except as
expressly provided herein. The Indemnitees are intended third-party
beneficiaries of the indemnification provisions set forth in Section 6.
8.7 Notices. Unless otherwise provided herein, any notice,
request, waiver, instruction, consent or other document or communication
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given and received (a) when delivered by
hand (with written confirmation of receipt), (b) when received by the addressee,
if sent by a nationally-recognized overnight delivery service or (c) when
received by the addressee, if mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
If to NPC Management:
NPC Management, Inc.
14400 College Blvd., Suite 201
Lenexa, Kansas 66215
Attn: Troy D. Cook
Telephone: (913) 327-5555
Facsimile: (913) 327-5849
with a copy to:
<PAGE> 8
John A. Granda, Esq.
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, Missouri 64106
Telephone: (816)842-8600
Facsimile: (816)691-3495
If to Romacorp:
Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, Texas 75243
Attn: Robert B. Page
Telephone: (214)343-7800
Facsimile: (214)343-2660
with a copy to:
Sentinel Capital Partners, L.P.
777 Third Ave., 37th Floor
New York, New York 10017
Attn: John F. McCormack
David S. Lobel
Telephone: (212) 688-3100
Facsimile: (212) 688-6513
with an additional copy to:
Frederick Tanne, Esq.
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
or at such other address or facsimile number for such Party as shall be
specified in writing by that Party.
8.8 Governing Law. This Agreement shall be construed in
accordance with and governed by the Laws of the State of Kansas applicable to
agreements made and to be performed wholly within such jurisdiction, without
regard to conflicts of law principles.
<PAGE> 9
8.9 Interpretation.
(a) Unless specifically stated otherwise, references to
Annex refers to the Annex of this Agreement.
References to "includes" and "including" mean
"includes without limitation" and "including without
limitation."
(b) Each Party is a sophisticated legal entity that was
advised by experienced counsel and, to the extent it
deemed necessary, other advisors in connection with
this Agreement.
(c) No provision of this Agreement shall be interpreted
in favor of, or against, any of the Parties by reason
of the extent to which any such Party or its counsel
participated in the drafting thereof or by reason of
the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
8.10 Exclusive Jurisdiction and Consent to Service of Process.
The Parties agree that any Action arising out of or relating to this Agreement
or the transactions contemplated hereby shall be instituted in a federal or
state court sitting in Johnson County, Kansas, which shall be the exclusive
venue of any such Action. Each Party waives any objection which such Party may
now or hereafter have to the laying of venue of any such Action, and irrevocably
consents and submits to the jurisdiction of any such court (and the appropriate
appellate courts) in any such Action. Any and all service of process and any
other notice in any such Action shall be effective against such Party when
transmitted in accordance with Section 8.7. Nothing contained herein shall be
deemed to affect the right of any Party to serve process in any manner permitted
by Law.
8.11 Entire Agreement. This Agreement, together with the Annex
hereto, constitutes the sole understanding of the Parties with respect to the
matters contemplated hereby and thereby and supersedes and renders null and void
all prior agreements and understandings, written and oral, between or among the
Parties with respect to the subject matter hereof and thereof. No Party shall be
liable or bound to any other Party in any manner by any promises, conditions,
representations, warranties, covenants, agreements and understandings, except as
specifically set forth herein or therein.
8.12 Amendment. No amendment, modification or alteration of
the terms or provisions of this Agreement, including the Annex, shall be binding
unless the same shall be in writing and duly executed by the Party against whom
such amendment, modification or alteration is sought to be enforced.
IN WITNESS WHEREOF, the undersigned have affixed their respective
signatures.
<PAGE> 10
NPC MANAGEMENT, INC.
By:
Troy D. Cook, Vice President
ROMACORP, INC.
By:
Robert B. Page, President
<PAGE> 11
ANNEX A
MIS SERVICE PARAMETERS
- - NPC Management will provide support for all POS System(s), Back-Office
Software, and ROI software. As set forth in Section 1.3 of the Agreement,
during the term of the Agreement. NPC Management may develop upgrades
to, and will endeavor to maintain a consistent code base for, the NPC
Software which will be used in connection with the Services provided by NPC
Management. Accordingly, Romacorp shall, and shall cause the Romacorp
Affiliates to, accept all such changes to the NPC Software, provided that
NPC Management will not implement any such changes that would materially
adversely affect or cause undue hardship to the business of Romacorp and
the Romacorp Affiliates or which would prevent Romacorp or the Romacorp
Affiliates from being able to utilize the NPC Software.
- - NPC Management will provide first level support (including contacting IBM
Support) to Romacorp for all POS and Back-Office hardware maintenance and
repair; however, Romacorp will be required to purchase an inventory of
spare systems in sufficient quantity to support its systems. This inventory
will be maintained at Romacorp and released as needed. Furthermore, systems
removed from operation by Romacorp or any Romacorp Affiliate will be the
responsibility of Romacorp or the Romacorp Affiliate.
- - NPC Management will poll all Tony Roma's stores wholly-owned by Romacorp or
any Romacorp Affiliate nightly. Stores failing to be polled must contact
NPC Management's Help Desk for support. It will be Romacorp's
responsibility to resolve any store who fails polling and does not contact
the Help Desk.
- - Consistent with the current arrangement, NPC Management will process and
transmit the daily and weekly FLASH in accordance with the following
schedule.
- Weekly
- Preliminary -- Monday afternoon
- Final -- Tuesday afternoon
- Rerun -- each Saturday
- Daily
- Runs each morning includes rerun of prior two days.
Note: Run times vary based on processing load
- - Consistent with the current arrangement, Romacorp will be responsible for
the maintenance and repair of all hardware and software associated with the
Dallas office network and telephone system.
- - NPC Management will provide access to the AS400 via the existing lease
line. The lease line facilities will be available from 8:00 a.m. to 6:00
p.m. Central Time.
- For security purposes, NPC Management will restrict Romacorp's and the
Romacorp
<PAGE> 12
Affiliates' lease line access to specific users (no more than 7)
who will be restricted to specific areas/files/programs. Romacorp
will be responsible to ensure the equipment is properly secured and
accessed only by individuals with the appropriate authority and
training.
- Should Romacorp and the Romacorp Affiliates decide to move to a new
facility, they are responsible for any costs that are incurred to
relocate the existing lease line and associated equipment but solely
to the extent expressly requested by Romacorp.
- In the event Romacorp's and the Romacorp Affiliates' level of activity
escalates requiring the expansion of the band width of the lease line
to Dallas, Romacorp will be charged for the associated incremental
costs but solely to the extent expressly requested by Romacorp.
- - Consistent with the current arrangement, Romacorp will be responsible for
the maintenance/repair of their local AS400 printer and terminals. Upon
conclusion of this agreement, this equipment will remain with Romacorp.
NPC Management will continue to provide assistance where possible.
- - NPC Management is responsible for the maintenance/repair of the Perle
Controller, Adtran TSU and Micom Controller located in the Dallas office.
Upon conclusion of the support agreement, this equipment will be returned
to NPC Management.
- - NPC Management's services on all systems will be restricted to maintenance
programming. This will include regular maintenance, changes to fix coding
problems, "bug" fixes, and changes necessary to meet legal requirements.
Enhancements will be performed consistent with current practice, based upon
priority and scheduling availability.
- - NPC Management will provide any program updates or changes to the Romacorp
system after testing and approval of such by Romacorp.
- - Any new facilities (i.e. insurance, banks, etc.) initiated by Romacorp or
any Romacorp Affiliate must conform to the existing design of NPC
Management's systems. NPC Management will make changes to rates, account
numbers, and codes as required; however, we will not redesign the system
input, output, or processing to accommodate the new requirement.
- - Romacorp will be responsible to test, approve, schedule, train and roll-out
all new or revised hardware or software. NPC Management will continue to
support electronic software distribution when appropriate.
- - Romacorp will be responsible for maintaining inventory-related files. NPC
Management will continue to maintain back-office files, system files, menu,
cash sheet and Flash authoring.
- - As long as Romacorp's local area network ("LAN") is connected to NPC
Management's wide area network ("WAN"), any changes to Romacorp's LAN
configuration must be approved in advance by NPC Management, which approval
shall not be unreasonably withheld.
<PAGE> 13
ACCOUNTING AND OTHER SERVICE PARAMETERS
PAYROLL
- - I-9's - management, keypunch, control, and all associated forms will be
processed.
- - Personnel Files - all personnel files held by NPC Management will continue
to be maintained by NPC Management until the termination of this Agreement
or earlier requested by Romacorp, at which time such will be delivered to
Romacorp.
- - Payroll Tax Reporting - all payroll tax returns will be completed by NPC
Management and forwarded to Romacorp for review and signing.
- - In order to maintain direct deposit, Romacorp must continue to use a bank
with a direct deposit data/media format consistent with that currently used
by NPC Management.
- - Romacorp must continue to use Gates McDonald for unemployment processing
during the term of this agreement.
ACCOUNTING
- - NPC Management will process Romacorp's month-end close in accordance with
the following scheme:
- Romacorp will adhere to current week, period and year ending dates.
- Romacorp's month-end accounting processing will be performed in
accordance with the current schedule with targeted preliminary general
ledger close on or around the 5th day after the end of the period.
- Romacorp will be responsible for all accounting estimates including but
not limited to the allowance for bad debts, accrued vacation, property
tax, insurance, income tax expense, and the related tax liability,
depreciation expense, and related accumulated depreciation amounts. NPC
Management will continue to record transactions to those accounts
consistent with past process. Upon commencement of this Agreement, new
rates will need to be established for the majority of these estimates.
The parties to this agreement will put forth commercially reasonable
efforts to mutually establish such amounts necessary to reflect the
estimates in the financial statements in accordance with the current
process. Romacorp will review, approve, and accept responsibility for all
estimates.
- NPC Management will put forth commercially reasonable efforts to provide
final general ledger close ten (10) business days following the end of
each fiscal period. During such time, three preliminary closes will be
processed in priority fashion (i.e., prior to processing Pizza Hut
close). Additional preliminary closes will be performed subject to system
capacity as assessed by NPC Management. Note: Both parties acknowledge
that the timing and volume of adjusting journal entries may cause the
above schedule to be delayed.
- - NPC Management will continue to process sales and use tax returns. The
returns will be
<PAGE> 14
reviewed and signed by Romacorp.
- - NPC Management will provide assistance in the preparation of federal and
state income tax returns and estimated tax payments which will be prepared
by the service provider used to prepare the NPC International, Inc. and
subsidiaries tax returns (currently Baird, Kurtz & Dobson). Service
provider fees for preparation of such returns will be billed directly to
Romacorp. Romacorp will have all necessary access to the service provider
and information included in the returns. Romacorp will be responsible for
review and signing of the returns.
- - NPC Management will process all property tax returns with RASH &
Associates. The fees for RASH & Associates will be billed directly to
Romacorp.
- - Account evaluations will be performed prior to the close of the next
period.
- - All reports will be printed and mailed by NPC Management consistent with
past practices.
- - NPC Management will provide all property management functions; however,
any lease extensions, communications with landlords, etc. will be reviewed
and approved by Romacorp.
- - Romacorp will be responsible for the development and maintenance of a
reliable system of internal controls. Specifically, all monitoring
controls, as defined by generally accepted auditing standards, will be
performed by Romacorp, and Romacorp will satisfy itself that application
controls over processes related to their financial statements are
operating properly.
- - NPC Management will retain no responsibility for the validity of cash
disbursements and will manage cash sweeping practices as directed by
Romacorp. All checks processed by NPC Management will be signed with a
nameplate. These checks will be sent to Romacorp for authorization and
disbursement.
- - NPC Management and its employees will not provide any representation
and/or warranties with respect to the financial statements of Romacorp or
its internal control system. NPC Management will not incur the time or
expense to have any procedures performed with respect to an independent
accountant's report related to the requirements of Statement or Auditing
Standards No. 70.
- - Romacorp must renegotiate "stand-alone" terms with credit card processors.
All information received by NPC Management from the Romacorp credit card
processors must remain in present format.
- - All check stock must be prepared by Rapco consistent with NPC Management's
existing format.
- - Any changes in vendors must be coordinated with NPC Management;
specifically, information (invoice) processing must remain on a
substantially consistent basis with NPC Management's existing system.
- - Accounting statement format changes will be executed on a priority basis;
however,
<PAGE> 15
changes to account numbers may be made at the discretion of NPC Management.
- - Romacorp will utilize "positive pay" check processing so as to allow NPC
Management to continue to use its bank account reconciliation software.
BENEFITS
- - Romacorp will be responsible for all employee benefits processing and
management.
GENERAL
- - All express and other mailing charges required by this arrangement will be
charged to Romacorp's billing code at that vendor or direct billed by NPC
Management.
Romacorp will reimburse NPC Management for any expenses incurred on its behalf
for products or services formerly charged to NPC Management on a consolidated
basis including but not limited to the following:
REIMBURSEMENTS
- AT&T telephone charges & long distance credit cards
- Gates McDonald Unemployment Processing
- Credit Card Processing Fees
- Diners Club Travel Charges
- IBM Maintenance Fees
- AS400 Lease Line Costs
Reimbursement for such expenses is due within thirty (30) days of invoice date
from NPC Management to Romacorp.
<PAGE> 1
EXHIBIT 10.4
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
MANAGEMENT SERVICES AGREEMENT, made as of July 1, 1998, by and between
Romacorp, Inc. (formerly known as Romacorp Operating Company, Inc.) (the
"Company"), and Sentinel Capital Partners, L.L.C. (the "Consultant").
WHEREAS, the Company has retained and availed itself of Consultant, and
Consultant has performed for the Company, Roma Restaurant Holdings, Inc.
(formerly known as Romacorp, Inc.) ("Holdings"), and their subsidiaries
(together with the Company and Holdings, the "Company Group"), certain services
in connection with the recapitalization (the "Recapitalization") of the capital
stock of Holdings pursuant to that certain Recapitalization Agreement, dated as
of April 24, 1998, by and among Holdings, Sentinel Capital Partners, L.P., NPC
International, Inc. and NPC Restaurant Holdings, Inc., as amended (with certain
rights assigned to certain other parties);
WHEREAS, the Company desires to retain and avail itself of the
Consultant, and the Consultant desires to perform for the Company and its
affiliates certain services; and
WHEREAS, the Consultant, by and through its officers, employees, agents
and affiliates, has developed, in connection with the conduct of their
businesses and affairs, expertise in the fields of management, finance,
marketing and strategic planning.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties do hereby agree as follows:
1. TERM. This Agreement shall remain in effect so long as Sentinel
Capital Partners, L.P. and/or Sentinel Capital Partners II, L.P. owns any shares
of capital stock of Holdings and unless the Company and the Consultant terminate
this Agreement by mutual agreement; provided that Sections 7 and 8 shall survive
any termination of this Agreement.
2. APPOINTMENT. The Company hereby retains the Consultant to render
management and consulting services to the Company (or to such subsidiaries of
the Company as the Company may from time to time request) during the Term as
herein contemplated.
3. CONSULTANT SERVICES. The Consultant hereby agrees that during the
term of this Agreement it shall render to the Company Group by and through such
of its officers, employees, agents, representatives and affiliates as the
Consultant, in its sole discretion, shall designate from time to time advisory
and consulting services in relation to the affairs of the Company Group in
connection with strategic financial planning, and other services not referred to
in the next sentence, including, without limitation, advisory and consulting
services relating to the selection, supervision and retention of independent
auditors, the selection, retention and supervision of outside legal
<PAGE> 2
counsel, and the selection, retention and supervision of investment bankers or
other financial advisors or consultants. It is expressly agreed that the
services to be performed under this paragraph 3 shall not include financial
advisory services rendered by the Consultant to the Company Group in connection
with acquisitions and divestitures by the Company Group, hiring of executive
personnel, refinancings, initial public offerings, sales of stock by the Company
Group or "exit" transactions. In the event services contemplated by the
preceding sentence are requested by the Company, the Consultant may be entitled
to receive additional compensation.
4. CONSULTANTS' FEES. In consideration of the Consultant's agreement to
provide the above-described consulting services, the Company shall pay to the
Consultant a fee of $300,000 per year for the first two years following the date
hereof and $500,000 per year for each year thereafter, in each case payable
quarterly in advance. In addition, the Company agrees to reimburse the
Consultant for any out-of-pocket expenses incurred by it or its affiliates in
connection with any services performed hereunder.
5. CLOSING PAYMENT. In consideration of the Consultant's provision of
services in connection with the Acquisition, the Company shall, upon the closing
of the Acquisition, pay to the Consultant, its out-of-pocket expenses incurred
by it or its affiliates in connection with the Acquisition.
6. PERSONNEL. Consultant shall provide and devote to the performance of
this Agreement such partners, employees and agents as Consultant shall deem
appropriate to the furnishing of the services required; provided, that if a
partner, employee or agent of the Consultant becomes an officer or an employee
of the Company Group, the Company may pay compensation to such partner, employee
or agent which shall not be deemed to be compensation to the Consultant
hereunder.
7. LIABILITY. Neither the Consultant nor any of its respective
affiliates, partners, employees or agents shall be liable to the Company or its
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of such Consultant, its affiliates, partners, employees or agents acting
within the scope of their employment or authority, in which event such
Consultant will be liable to the extent of its individual culpability as proven.
In no event will Consultant be liable for consequential or incidental damages
(including any damages for lost profits or opportunity).
8. INDEMNITY. The Company Group shall defend, indemnify and hold
harmless the Consultant, its affiliates, partners, employees, agents, directors,
officers and controlling persons (collectively, the "Indemnified Parties") from
and against any and all loss, liability, damage or expense (including attorney
fees and expenses incurred in connection with the investigation, defense or
negotiation of a settlement thereof or otherwise) (collectively, "Losses")
arising from any claim (threatened or actual, just or unjust) (a "Claim") by any
person with respect to, or in any way related to the Recapitalization (including
Sentinel Capital Partners, L.P.'s and/or Sentinel Capital Partners
2
<PAGE> 3
II, L.P.'s investment in Holdings), this Agreement or the services (including,
without limitation, the engagement of such Consultant pursuant to this Agreement
and the performance by such Consultant of services pursuant to this Agreement)
contemplated by this Agreement. The Company Group shall, if requested by the
Consultant, defend at its own cost and expense such Claims with attorneys
reasonably satisfactory to the Consultant (in which case the Company shall
consult with Consultant on all material decisions in connection with such Claim
and shall not settle any such Claim without the consent of the Consultant,
consent not to be unreasonably withheld), and, if not so requested, advance to
the Indemnified Party the costs of such defense. No Indemnified Party shall be
entitled to indemnification for Losses under this Section 8 to the extent it is
proven that such Losses arose as the direct result of gross negligence, bad
faith or willful misconduct by such of the Indemnified Parties; provided that if
such determination is proven, the applicable Indemnified Party(s) shall
reimburse the Company for the costs of defense advanced by the Company.
9. NOTICES. All notices hereunder shall be dated and in writing and
shall be deemed to have been given (i) when delivered, if delivered personally,
(ii) one day following the date sent, if sent by reputable overnight courier,
fee prepaid or (iii) upon receipt of confirmation, if sent by facsimile
transmission (with receipt confirmed and original sent by first class mail), to
the party to whom it is directed, at the addresses or the facsimile number set
forth for such party below:
To the Consultant:
Sentinel Capital Partners, L.L.C.
777 Third Avenue
32nd Floor
New York, New York 10017
Phone: (212) 688-3100
Fax: (212) 688-6513
Attention: David S. Lobel
John F. McCormack
Eric D. Bommer
To the Company:
Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, Texas 75243
Phone: (214) 343-7800
Fax: (214) 343-7725
Attention: David Short
10. ASSIGNMENT. No party may assign any obligations hereunder to any
other party without the prior written consent of the other two parties; such
consent shall not be unreasonably withheld; provided, however, that the
Consultant may assign its rights and obligations
3
<PAGE> 4
under this Agreement to any of its respective affiliates without the consent of
any party. The assignor shall remain liable for the performance of any assignee.
11. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties.
12. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
the terms and conditions of this document constitute the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede and preempt any prior communications, understandings, warranties,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
13. AMENDMENT. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by either party from any such provision,
shall in any event be effective unless the same shall be in writing and signed
by an authorized representative of each of the parties to this Agreement and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
14. COUNTERPARTS. This Agreement may be executed and delivered by each
party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same Agreement.
15. GOVERNING LAW. ALL PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW OF
THE STATE OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD CAUSE THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
* * * * *
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first written above.
SENTINEL CAPITAL PARTNERS, L.L.C.
By: /s/ David S. Lobel
------------------------------
Name: David S. Lobel
Title: Secretary
ROMACORP, INC.
By: /s/ Robert B. Page
------------------------------
Name: Robert B. Page
Title: President
<PAGE> 1
EXHIBIT 10.5
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of
July 1, 1998, by and among Roma Restaurant Holdings, Inc. (formerly known as
Romacorp, Inc.), a Delaware corporation (the "Company"), and Robert B. Page
("Executive"). Certain definitions are set forth in SECTION 14 of this
Agreement.
The Company and Executive desire to enter into an agreement
(i) setting forth the terms pursuant to which the Company shall grant to
Executive an option to acquire certain shares of Common; (ii) setting forth the
terms and conditions of Executive's employment with the Company; and (iii)
setting forth the obligation of Executive to refrain from competing with the
Company and/or its Subsidiaries under certain circumstances as provided herein.
The parties hereto agree as follows:
STOCK AND OPTION PROVISIONS
1. [This Section intentionally omitted]
2. Stock Option.
(a) Grant of Option. Pursuant to the Plan, the Company hereby grants to
Executive a nonqualified stock option (the "Option") to purchase 11.11 shares
(the "Option Shares") of Common, at a price per share of $12,500.00 (the
"Exercise Price"). The Exercise Price and the number of Option Shares may be
adjusted as provided in the Plan. The Option is not intended to be an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code.
(b) Executive Bound by Plan. Attached hereto as Annex A is a copy of
the Plan which is incorporated herein by reference and made a part hereof.
Executive hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof. The Plan should be carefully
examined before any decision is made to exercise the option.
(c) Exercisability. Subject to SECTION 2(F), the Option shall be
exercisable, in whole or in part, by written notice to the Company at any time,
and from time to time, during the period of time after the date hereof and prior
to the tenth anniversary of the date hereof or such earlier date upon which the
Option expires as specified herein or in the Plan. The Option may not be
exercised for a fraction of a share of Common. The Option is subject to
cancellation as provided in the Plan.
(d) Vesting of Option. The Option shall vest with respect to the Option
Shares as follows:
<PAGE> 2
(i) Time Option Shares. This Option shall vest with respect to
5.55 Option Shares subject to this Option (the "Time Option Shares") provided
the Executive remains continuously employed with the Company after the date
hereof and through and including the vesting dates described below as follows:
NUMBER OF TIME
VESTING DATE OPTION SHARES WHICH VEST
------------ ------------------------
The first anniversary of the date hereof 1.11
The last day of each of the first 48 months 0.0925
after the first anniversary of the date hereof
provided, that upon the closing of a Sale of the Company, this Option will
immediately vest with respect to all of the unvested Time Option Shares.
(ii) Performance Option Shares. This Option shall vest with
respect to 5.55 Option Shares (the "Performance Option Shares") upon the
attainment of certain goals described in this SECTION 2(d)(II). This Option
shall vest with respect to 1.85 Performance Option Shares as of the vesting
dates set forth below if (x) the Company's EBITDA (as defined below) for the
fiscal year ending on such vesting date equals at least the dollar amount set
forth opposite such vesting date (each a "Target EBITDA") and (y) the Executive
has been continuously employed with the Company from the date hereof through the
applicable vesting date:
VESTING DATES TARGET EBITDA
------------- -------------
Last day of fiscal year 1999 $18,468,000
Last day of fiscal year 2000 $20,011,000
Last day of fiscal year 2001 $23,455,000
Last day of fiscal year 2002 $27,545,000
; provided that the last day of fiscal year 2002 vesting date is provided only
for the purposes of vesting Performance Option Shares, if any, which do not vest
on the last day of fiscal year 2001 and in no event shall more than 5.55 Option
Shares vest pursuant to this Section 2(d)(ii).
The effective date of vesting shall be as set forth above even though EBITDA for
the applicable period may not be determined until a date thereafter.
In the event that the Company does not achieve the Target
EBITDA provided in the table above as of the last day of fiscal year 1999, the
last day of fiscal year 2000 and/or the last day of fiscal year 2001, the
portion of the Option which did not vest on any such date shall vest if the
actual EBITDA for the following fiscal year exceeds the Target EBITDA for such
following fiscal year by an amount greater than or equal to the shortfall in
Target EBITDA for the prior fiscal year.
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<PAGE> 3
In the event that (a) the Company consummates any acquisition
of the capital stock or assets of another corporation in any given year or (b)
the Company commits to a one-time unusual capital expenditure, the Target EBITDA
for such year will be adjusted to account for the pro-forma and pro-rata EBITDA
impact of such acquired corporation or such capital expenditure, as the case may
be.
"EBITDA" means earnings before interest, income taxes,
depreciation, amortization, Sentinel Capital Partners, L.P.'s or one of its
affiliate's management fee and non-recurring charges.
(e) Early Expiration Upon Termination of Employment. Any portion of the
Option that has previously vested prior to or on the date Executive's employment
with the Company, Roma Restaurant Holdings, Inc. (the Company's parent) or the
Company's Subsidiaries terminates (the "Termination Date") for any reason other
than termination by the Company for Cause may be exercised by Executive within
30 days of the Termination Date. If Executive does not elect to exercise any
vested portion of the Option within 30 days of the Termination Date, such
portion shall expire and shall no longer be exercisable. If Executive elects to
exercise any portion of such Option within 30 days of the Termination Date, such
portion shall be immediately subject to the Repurchase Option pursuant to the
terms and conditions set forth in SECTION 3. If the Executive's employment is
terminated by the Company for Cause, the portion of the Option that is vested
but not yet exercised shall be forfeited.
(f) Procedure for Exercise. Executive may exercise all or a portion of
the Option by delivering written notice of exercise to the Company, together
with (i) written acknowledgment that Executive has read and has been afforded an
opportunity to ask questions of management of the Company regarding all
financial and other information provided to Executive regarding the Company and
(ii) payment in full by delivery of a cashier's or certified check in the amount
equal to the sum of (A) the Exercise Price multiplied by the number of shares of
Common to be acquired and (B) the amount, if any, of any additional federal and
state income taxes required to be withheld by reason of the exercise of the
Option. As a condition to the exercise of any part of the Option, Executive will
permit the Company to, and at the request of Executive the Company shall,
deliver to him all financial and other information regarding the Company and its
Subsidiaries which it believes necessary to enable Executive to make an informed
investment decision.
(g) Securities Laws Restrictions. Executive represents that when
Executive exercises the Option he will be purchasing Option Shares for
Executive's own account and not on behalf of others. Executive understands and
acknowledges that federal and state securities laws govern and restrict
Executive's right to offer, sell or otherwise dispose of any Option Shares
unless Executive's offer, sale or other disposition thereof is registered under
the Securities Act and state securities laws or, in the opinion of the Company'
counsel, such offer, sale or other disposition is exempt from registration
thereunder. Executive agrees that he will not offer, sell or otherwise dispose
of any Option Shares in any manner which would: (i) require the Company to file
any registration statement (or similar filing under state law) with the
Securities and Exchange Commission or to amend or supplement any such filing or
(ii) violate or cause the Company to violate the Securities Act, the rules and
regulations promulgated thereunder or any other state or federal law. Executive
further understands that the certificates for any Option Shares Executive
purchases will bear the legend set
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<PAGE> 4
forth in SECTION 5 hereof or such other legends as the Company deems necessary
or desirable in connection with the Securities Act or other rules, regulations
or laws.
(h) Non-Transferability of the Option. The Option is personal to
Executive and is not transferable by Executive. Only Executive or Permitted
Transferees or their respective estates or heirs are entitled to exercise the
Option.
(i) Effect of Transfers in Violation of Agreement. The Company will not
be required (i) to transfer on its books any Option Shares which have been sold
or transferred in violation of any of the provisions set forth in this
Agreement, or (ii) to treat as owner of such shares, to accord the right to vote
as such owner or to pay dividends to any transferee to whom such shares have
been transferred in violation of this Agreement.
(j) Delivery of Shares. The date on which Executive has delivered to
the Company the items required under SECTION 2(f) is referred to herein as
Executive's "Exercise Date". Certificates for Option Shares purchased upon
exercise of the Option shall be delivered by the Company to Executive within
five business days after Executive's Exercise Date.
(k) Date of Issuance. The Option Shares issuable upon the exercise of
the Option shall be deemed to have been issued to Executive on Executive's
Exercise Date, and Executive shall be deemed for all purposes to have become the
record holder of such Option Shares on Executive's Exercise Date.
(l) Fully Paid. The issuance of certificates for Option Shares upon
exercise of the Option shall be made without charge to Executive for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such exercise. Each Option Share issuable upon exercise of the
Option shall, upon payment of the exercise price therefor, be fully paid and
nonassessable and free from all liens and charges with respect to the issuance
thereof.
(m) Book Transfer. The Company shall not close its books against the
transfer of any Option Shares issued or issuable upon the exercise of the Option
in any manner which interferes with the timely exercise of the Option.
(n) Filings. The Company shall assist and cooperate with Executive to
make any required governmental filings or obtain any governmental approvals
prior to or in connection with any exercise of the Option.
(o) Reservation. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common solely for the
purpose of issuance upon the exercise of the Option, such number of shares of
Common as are issuable upon the exercise of all outstanding Options. All Option
Shares which are so issuable shall, when issued, be duly and validly issued,
fully paid and nonassessable and free from all taxes, liens and charges. The
Company shall take all such actions as may be necessary to assure that all such
Option Shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
or market upon which shares of Common may be listed (except for official notice
of issuance which shall be immediately delivered by the Company upon each such
issuance).
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<PAGE> 5
3. Repurchase Option.
(a) Repurchase Option. In the event that Executive is no longer
employed by the Company or any of its Subsidiaries for any reason, the Executive
Securities, whether held by Executive, or one or more Permitted Transferees,
will be subject to repurchase by the Company and the Investors pursuant to the
terms and conditions set forth in this SECTION 3 (the "Repurchase Option").
(b) Termination for Reasons Other than for Cause. If the Executive's
employment with the Company or any of its Subsidiaries is terminated for any
reason other than for Cause, then within one year after the Termination Date,
the Company may elect to purchase all or some of 50% of the Executive Securities
(other than the Option Shares) and 100% of the Option Shares (collectively, the
"Eligible Stock"), at a price per share equal to the Fair Market Value thereof
(x) as determined on the Termination Date, if the Repurchase Notice (as defined
in SECTION 3(D) below) has been delivered within three months after the
Termination Date, or (y) as determined as of a date determined by the Board
within 30 days prior to the delivery of the Repurchase Notice, if the Repurchase
Notice is delivered after the third month following the Termination Date;
provided that if Executive terminates his employment and violates SECTIONS 10,
11 OR 12, the repurchase price for each share of Eligible Stock shall be equal
to the lesser of its Fair Market Value or the Original Value thereof.
(c) Termination for Cause. If Executive is no longer employed by the
Company or any of its Subsidiaries as a result of Executive's termination for
Cause, then within one year after the Termination Date, the Company may elect to
purchase all or any portion of the Executive Securities (collectively, the
"Available Stock"), at a price per share equal to the lower of the Fair Market
Value thereof and the Original Value thereof.
(d) Repurchase Procedures. The Company may elect to exercise the right
to purchase all or any portion of the Eligible Stock or the Available Stock, as
the case may be, by delivering written notice (the "Repurchase Notice") to the
holder or holders of such Executive Securities. The Repurchase Notice will set
forth the number of shares of Executive Securities to be acquired from such
holder(s), the aggregate consideration to be paid for such shares and the time
and place for the closing of the transaction. If any shares of Executive
Securities are held by Permitted Transferees of Executive, the Company shall
purchase the shares elected to be purchased from such holder(s) of shares of
Executive Securities pro rata according to the number of shares of Executive
Securities held by such holder(s) at the time of delivery of such Repurchase
Notice (determined as nearly as practicable to the nearest share).
(e) Investors' Rights.
(i) If for any reason the Company does not elect to purchase
all of the Eligible Stock or the Available Stock, as the case may be, prior to
the 90th day following the Termination Date, Sentinel and then in certain
circumstances, each Investor will be entitled to exercise the Repurchase Option,
in the manner set forth in SECTION 3(d), for the Eligible Stock or the Available
Stock, as the case may be, that the Company has not elected to purchase (the
"Available Shares"). As soon as practicable, but in any event within thirty (30)
days after the Company determines that
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<PAGE> 6
there will be Available Shares, the Company will deliver written notice (the
"Option Notice") to all Investors setting forth the number of Available Shares
and the price for each Available Share.
(ii) Sentinel will be permitted to purchase all or some of the
number (the "Sentinel Portion") of Available Shares equal to the product of (A)
Sentinel's Pro Rata Share and (B) the number of Available Shares, by delivering
written notice to the Company and the other Investors within 30 days after
receipt of the Option Notice from the Company (such 30-day period being referred
to herein as the "Sentinel Election Period"). The quotient determined by
dividing (x) the number of shares of Available Shares elected to be purchased by
Sentinel and (y) the Sentinel Portion, shall be referred to as the "Sentinel
Percentage." If Sentinel elects to purchase any of the Available Shares, each of
the other Investors shall be permitted to purchase all or some of the number of
Available Shares equal to the product of (m) the Sentinel Percentage, (n) such
Investor's Pro Rata Share and (o) the number of Available Shares, by delivering
written notice to the Company within 30 days after receipt of the Option Notice
from the Company.
(f) Closing. The closing of the transactions contemplated by this
SECTION 3 will take place on the date designated by the Company in the
Repurchase Notice, which date will not be more than 90 days after the delivery
of such notice. The Company and/or the Investors, as the case may be, will pay
for the Executive Securities to be purchased pursuant to the Repurchase Option
by delivery of, in the case of an Investor, a check payable to the holder of
Executive Securities, and in the case of the Company (i) a check payable to the
holder of such Executive Securities, (ii) a note or notes payable in three equal
annual installments beginning on the first anniversary of the closing of such
purchase and bearing interest (payable quarterly) at a rate per annum equal to
10% or (iii) both (i) and (ii) in the aggregate amount of the purchase price for
such shares (which note will also become due upon a Change of Ownership). The
Company and/or the Investors, as the case may be, will receive customary
representations and warranties from Executive regarding the sale of the
Executive Securities, including but not limited to the representation that
Executive has good and marketable title to the Executive Securities to be
transferred free and clear of all liens, claims and other encumbrances.
(g) Restrictions on Repurchase. Notwithstanding anything to the
contrary contained in this Agreement, all repurchases of Executive Securities by
the Company shall be subject to applicable restrictions contained in the
Delaware General Corporation Law and in the Company's and its Subsidiaries' debt
and equity financing agreements. If any such restrictions prohibit the
repurchase of Executive Securities hereunder which the Company is otherwise
entitled or required to make, the Company may make such repurchases as soon as
it is permitted to do so under such restrictions.
(h) Termination of Repurchase Right. The right of the Company and the
Investors to repurchase Executive Securities pursuant to this SECTION 3 shall
terminate upon the first to occur of an Sale of the Company or a Qualified
Public Offering.
4. Stockholders Agreement. The parties hereto acknowledge that the shares of
Executive Securities are subject to the terms and conditions of the Stockholders
Agreement and such shares shall be deemed to be "Company Shares" and the
Executive shall be deemed to be a "Stockholder" for all purposes of the
Stockholders Agreement.
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<PAGE> 7
5. Restrictions on Transfer.
(a) The certificates representing the Executive Securities shall bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON , 1998, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET
FORTH IN A MANAGEMENT AGREEMENT AMONG ROMA RESTAURANT HOLDINGS, INC.
(THE "COMPANY") AND EXECUTIVE DATED AS OF JULY 1, 1998, AS AMENDED AND
MODIFIED FROM TIME TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT
CHARGE."
(b) No holder of Executive Securities may sell, transfer or dispose of
any Executive Securities (except pursuant to an effective registration statement
under the Securities Act) without first delivering to the Company an opinion of
counsel (reasonably acceptable in form and substance to the Company) that
neither registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such transfer.
EMPLOYMENT PROVISIONS
6. Employment. The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on the date hereof and ending as provided in
SECTION 9 hereof (the "Employment Period").
7. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of the Chief Executive Officer, subject to the
power of the Board to expand or limit such duties, responsibilities and
authority and to override actions of the President.
(b) Executive shall report to the Board, and Executive shall devote his
best efforts and substantially all of his business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company and its Subsidiaries.
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.
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<PAGE> 8
(c) In addition, Executive shall be responsible for (i) providing
assistance to the Company in maintaining all of the Company's relationships with
its customers and suppliers, and (ii) assisting the Company in the evaluation of
new business opportunities.
8. Base Salary; Benefits and Bonuses.
(a) During the Employment Period, Executive's base salary shall be
$200,000 per annum or such higher rate as the Board may designate from time to
time (the "Base Salary"), which salary shall be payable in regular installments
in accordance with the Company's general payroll practices and shall be subject
to customary withholding. In addition, during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company and its
Subsidiaries are generally eligible, including, but not limited to the Company's
group medical coverage program, and Executive shall be eligible for paid
vacation in accordance with the policies of the Company.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) In addition to the Base Salary, the Board shall award a bonus to
Executive following the end of each fiscal year equal to up to 50% of the
Executive's Base Salary based upon performance, determined at the discretion of
the Board. It is anticipated that in any given fiscal year if the Company were
to just meet the performance goals contained in the Company's management plan,
the bonus awarded under this SECTION 8(c) would be approximately 25% of the
Executive's Base Salary.
9. Term; Termination.
(a) The Employment Period shall end on the third annual anniversary of
the date hereof; provided that (i) the Employment Period shall terminate prior
to such date upon Executive's death, resignation or Disability; (ii) the
Employment Period may be terminated by the Company at any time prior to such
date for Cause or without Cause; (iii) the Employment Period may be terminated
by Executive at any time for any reason (a "Voluntary Termination"); and (iv)
unless each party is notified in writing within 30 days before the third annual
anniversary of the date hereof or the end of a Renewal Period, the Employment
Period shall automatically be extended for additional one year periods (each
such period, a "Renewal Period").
(b) Upon (1) a Voluntary Termination of the employment relationship by
Executive other than within 10 days of a Good Reason Event or (2) termination of
the Executive's employment relationship by the Company for Cause, prior to the
end of the Employment Period (the "Term"), all future compensation or bonuses to
which Executive would otherwise be entitled and all future benefits for which
Executive would otherwise be eligible shall cease and terminate as of the date
of such termination; provided, however, that any salary, bonus, incentive
payment, deferred compensation or other compensation or benefit which has been
earned by or accrued for the benefit
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<PAGE> 9
of Executive prior to the date of termination shall not be forfeited and shall
be paid to Executive promptly.
(c) Upon a termination of Executive's employment prior to the end of
the Term other than (i) a termination by the Company for Cause or (ii) a
Voluntary Termination of the employment relationship by Executive other than
within 10 days of a Good Reason Event, the Executive shall be entitled, in
consideration of Executive's continuing obligations hereunder after such
termination (including, without limitation, Executive's non-competition
obligations), to receive his Base Salary, payable bi-weekly, and fringe
benefits, as if Executive's employment (which shall cease on the date of such
termination) had continued for the twelve (12) months following termination;
provided, that in the event Executive's employment is terminated for the reasons
set forth in clauses (i) or (ii) above, Executive shall be required to use his
reasonable best efforts to obtain, as expeditiously as possible, employment with
at least comparable salary and responsibilities commensurate with those set
forth herein. In such event, Executive's right to receive the amounts and
benefits set forth in this SECTION 9(c) shall terminate. Notwithstanding the
foregoing, if Executive obtains employment in accordance with this SECTION 9(c)
and the salary to be paid to Executive is less than the Base Salary, the Company
shall pay to Executive an amount equal to such deficiency, payable bi-weekly,
for the remainder of the severance period.
MISCELLANEOUS PROVISIONS
10. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by the Company and its
Subsidiaries (including those obtained while employed by the Company prior to
the date of this Agreement) concerning the business or affairs of the Company or
any of its Subsidiaries ("Confidential Information") are the property of the
Company or such Subsidiary. Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes any Confidential
Information without the prior written consent of the Board, unless and to the
extent that (i) such information was otherwise available to Executive from a
source other than the Company and (ii) the aforementioned matters become
generally known to and available for use by the public other than as a result of
Executive's acts or omissions. Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under his control.
11. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary. Executive shall promptly disclose such Work Product to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).
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<PAGE> 10
12. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company prior to the date of this Agreement he has become familiar, and
during his continued employment with the Company he shall become familiar, with
the Company's trade secrets and with other Confidential Information concerning
the Company and its Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
Therefore, Executive agrees that, during the period commencing on the date
hereof and ending on the third anniversary of the termination of the Employment
Period (including any Renewal Period) (the "Noncompete Period"), he shall not
directly or indirectly own any interest in, manage, control, participate in,
consult with, or render services for, any Person that is in the casual dining
rib restaurant business in the United States. Nothing herein shall prohibit
Executive from being a passive owner of not more than 5% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly, or
indirectly through another entity, (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
13. Enforcement. If, at the time of enforcement of SECTIONS 10, 11 OR 12 of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area. Because Executive's services
are unique and because Executive has access to Confidential Information and Work
Product, the parties hereto agree that money damages would not be an adequate
remedy for any breach of this Agreement. Therefore, in the event a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security). In addition, in
the event of an alleged breach or violation by Executive of SECTION 12, the
Noncompete Period shall be tolled until such breach or violation has been duly
cured. Executive agrees that the restrictions contained in SECTION 12 are
reasonable.
14. Definitions. All references to a fiscal year refer to the Company's fiscal
year.
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by, or under common control with such Person. For
purposes of this Agreement, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"
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<PAGE> 11
as used with respect to any Person) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether through ownership of voting securities, by
contract or otherwise.
"Board" means the board of directors of the Company.
"Cause" means (i) the continued failure by Executive to
perform duties described under SECTION 7 hereof (which failure is not cured
within 5 days following notice from the Board), (ii) gross negligence (which is
not cured within 5 days after notice from the Board) or willful misconduct by
Executive in the performance of his duties or (iii) Executive's commission of a
felony or other offense involving moral turpitude.
"Change of Ownership" is any event pursuant to which (i) any
Person together with such Person's Affiliates (other than the Investors and
their Affiliates) collectively own at least 50% of the aggregate number of
shares of Common outstanding at any given time, and (ii) the Investors and their
Affiliates collectively cease to own at least 50% of the aggregate number of
shares of Common that they own on the date hereof (as adjusted for stock splits,
stock dividends and recapitalization and for exchanges in connection with a
merger, consolidation, reorganization or sale).
"Closing" means the closing of the transactions contemplated
by the Recapitalization Agreement.
"Common" means the Company's Common Stock, par value $.01 per
share.
"Disability" means Executive's inability, due to illness,
accident, injury, physical or mental incapacity or other disability, to carry
out effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating 14 days (whether or
not consecutive) during each three month period for not less than six months, as
determined by an independent physician.
"Executive Securities" means (i) the Option Shares which are
issued and outstanding from time to time, (ii) any other shares of Common
otherwise issued to, acquired by or held by Executive and (iii) shares of the
Company's capital stock issued with respect to the securities specified in
clauses (i) or (ii) above by way of a stock split, stock dividend or other
recapitalization; provided that Executive Securities shall continue to be
Executive Securities in the hands of any holder other than Executive (except for
the Company and the Investors and except for transferees in a Public Sale), and
except as otherwise provided herein, each such other holder of Executive
Securities shall succeed to all rights and obligations attributable to Executive
as a holder of Executive Securities hereunder.
"Fair Market Value" of each Option Share or share of Executive
Securities, as the case may be, means the market value as determined in good
faith mutually by the Board and Executive; provided that if the parties cannot
agree within 30 days, the Fair Market Value will be
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decided by a mutually acceptable independent investment bank, whose
determination will be final and binding.
"Family Group" means Executive's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of Executive
and/or Executive's spouse and/or descendants.
"Good Reason Event" means:
(a) Notwithstanding the exercise of the power granted
to the Company and the Board by the concluding clause of
SECTION 7(a) hereof, the assignment to the Employee of any
duties inconsistent in any material respect with Employee's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities initially
assigned to Executive and as contemplated by SECTION 7 of this
Agreement, or any other action that results in a diminution in
such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied
within 10 days after receipt of written notice thereof from
the Employee to the Company; or
(b) Any failure by the Company to comply with any of
the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad
faith that is remedied within 10 days after receipt of written
notice thereof from the Employee to the Company.
"Investor Shares" means (i) any Common acquired by the
Investors, and (ii) any equity securities of the Company issued or issuable
directly or indirectly with respect to the securities referred to in clause (i)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided that Investor Shares shall not include (a) shares of
Common issued pursuant to the conversion or exercise of any options, warrants or
other convertible securities or (b) any equity securities of the Company issued
or issuable with respect to the securities referred to in clause (a) above in
connection with a combination or split of shares, recapitalization, merger,
consolidation or other reorganization.
"Investors" means the parties listed on Schedule 1 attached
hereto, provided that if a party who is an employee of the Company as of the
date hereof or becomes an employee of the Company at any time after the date
hereof ceases to be an employee of the Company hereafter or thereafter, such
party shall be deemed to have been removed from the Schedule and shall no longer
be deemed an Investor for purposes of this Agreement.
"Option Shares" means, collectively, the Time Option Shares
and the Performance Option Shares.
"Original Value" means with respect to each Option Share, the
exercise price paid for such Option Share (each as proportionally adjusted for
all stock splits, stock dividends and other recapitalizations subsequent to the
date hereof).
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<PAGE> 13
"Permitted Transferee" has the meaning set forth in the
Stockholders Agreement.
"Person" means any natural person, corporation, partnership,
limited liability company, trust, unincorporated organization or other entity.
"Plan" means that certain Roma Restaurant Holdings, Inc. 1998
Stock Option Plan.
"Pro Rata Share" means, with respect to each Investor, the
quotient determined by dividing (i) the total number of Investor Shares held by
such Investor, by (ii) the total number of Investor Shares held by all
Investors.
"Public Sale" means any sale pursuant to a registered public
offering under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Qualified Public Offering" has the meaning set forth in the
Stockholders Agreement.
"Recapitalization Agreement" means that certain
Recapitalization Agreement, dated as of April 24, 1998, by and among the Company
and certain other parties thereto, as amended.
"Sale of the Company" means the first to occur of any
transaction (i) following which there has been a Change of Ownership, or (ii)
involving the sale of substantially all of the Company's assets determined on a
consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Sentinel" means Sentinel Capital Partners, L.P., a Delaware
limited partnership.
"Stockholders Agreement" means that certain Stockholders
Agreement dated as of the date hereof, by and among the Company and the
Company's stockholders.
"Subsidiary" means any corporation, partnership, association
or other business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by the
Company or (ii) if a partnership, association or other business entity, a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by the Company. For
purposes hereof, the Company shall be deemed to have a majority ownership
interest in a partnership, association or other business entity if the Company,
directly or indirectly, is allocated a majority of partnership, association, or
other business entity gains or losses, or is or controls the managing director
or general partner (or Person having like authority) of such partnership,
association or other business entity.
"Termination Date" has the meaning set forth in Section 2(e).
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<PAGE> 14
15. Notices. Any notice provided for in this Agreement must be in writing and
must be either personally delivered, mailed by first class mail (postage prepaid
and return receipt requested) or sent by reputable overnight courier service
(charges prepaid) to the Investors at the addresses indicated in the Company's
records and to the other recipients at the address indicated below:
If to Executive: Robert Page
3924 Evesham
Plano, TX 75025
If to the Company: Roma Restaurant Holdings, Inc.
c/o Sentinel Capital Partners, L.P.
777 Third Avenue, 32nd Floor
New York, New York 10022
Attention: David S. Lobel
John F. McCormack
Eric D. Bommer
with a copy to: Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Frederick Tanne, Esquire
- and-
David Short
Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, TX 75243
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S.
mail.
16. General Provisions.
(a) Executive Acknowledgment. The Executive acknowledges that he/she
shall not be entitled to any salary, bonuses, benefits or options granted
hereunder unless and until the stockholders of the Company approve such rights
in compliance with the requirements of Section 280G(b) (5)(B) of the Internal
Revenue Code and proposed Treasury Regulation Section 1.280G-1, Q&A 7.
(b) Transfers in Violation of Agreement. Any transfer or attempted
transfer of any Executive Securities in violation of any provision of this
Agreement shall be void, and the Company
-14-
<PAGE> 15
shall not record such transfer on its books or treat any purported transferee of
such Executive Securities as the owner of such stock for any purpose.
(c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(d) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(e) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(f) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the Investors and their respective successors and
assigns (including subsequent holders of Executive Securities); provided that
the rights and obligations of Executive under this Agreement shall not be
assignable except in connection with a permitted transfer of Executive
Securities hereunder.
(g) Choice of Law. The corporate law of the State of Delaware shall
govern all questions concerning the relative rights of the Company, Executive
and the Investors. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
(h) Remedies. Each of the parties to this Agreement (including the
Investors) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
-15-
<PAGE> 16
(i) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive. The provisions of SECTION 3 may be amended and waived only with the
prior written consent of the Investors.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and agree
that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investors and
their successors and assigns.
* * * * *
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<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
ROMA RESTAURANT HOLDINGS,
INC.
By:
--------------------------
Its:
--------------------------
-----------------------------
Robert B. Page
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<PAGE> 18
SCHEDULE 1
Sentinel Capital Partners, L.P.
Sentinel Capital Partners II, L.P.
Omega Partners, L.P.
The Provident Bank
Travelers Casualty and Surety Company
The Travelers Insurance Company
The Travelers Life and Annuity Company
The Phoenix Insurance Company
NPC Restaurant Holdings, Inc.
-18-
<PAGE> 1
EXHIBIT 10.6
CREDIT AGREEMENT
BY AND AMONG
ROMACORP OPERATING COMPANY, INC.
ROMACORP, INC.,
ROMA SYSTEMS, INC.,
ROMA FRANCHISE CORPORATION,
ROMA HOLDINGS, INC.,
ROMA DINING LP,
Borrowers,
THE PROVIDENT BANK,
Agent
AND
VARIOUS LENDERS DESCRIBED HEREIN
July 1, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 INTERPRETATION............................................................................ 1
Section 1.1 Provisions Pertaining to Definitions............................................. 1
Section 1.2 Definitions...................................................................... 1
ARTICLE 2 THE LOANS................................................................................. 21
Section 2.1 Commitments...................................................................... 21
Section 2.2 Making the Loans................................................................. 21
Section 2.3 Draws, Advances and Settlement of Payments and Advances.......................... 21
Section 2.4 The Revolving Credit Notes....................................................... 22
Section 2.5 Letters of Credit................................................................ 22
Section 2.6 Interest Payable on the Loans.................................................... 24
Section 2.7 Repayments and Prepayments of Principal.......................................... 26
Section 2.8 Payments and Computations........................................................ 27
Section 2.9 Payments to be Free of Deductions................................................ 29
Section 2.10 Use of Proceeds.................................................................. 29
Section 2.11 Libor Breakage Cost.............................................................. 29
Section 2.12 Additional Costs, etc............................................................ 30
Section 2.13 Agent and Lender Statements...................................................... 30
Section 2.14 Allocation of Liability.......................................................... 30
ARTICLE 3 SECURITY AGREEMENT........................................................................ 31
Section 3.1 Security Interest................................................................ 31
Section 3.2 Financing Statements; Additional Documents....................................... 32
Section 3.3 Release of Collateral............................................................ 33
ARTICLE 4 CONDITIONS PRECEDENT TO DISBURSEMENTS..................................................... 33
Section 4.1 Conditions Precedent to Initial Closing.......................................... 33
Section 4.2 Conditions Precedent to Subsequent Loans......................................... 37
ARTICLE 5 GENERAL REPRESENTATIONS AND WARRANTIES.................................................... 37
Section 5.1 Existence, Etc................................................................... 38
Section 5.2 Authority, Etc................................................................... 39
Section 5.3 Binding Effect of Documents, Etc................................................. 39
Section 5.4 No Events of Default, Etc........................................................ 40
Section 5.5 Financial Statements............................................................. 40
Section 5.6 Changes; None Adverse............................................................ 40
Section 5.7 Title to Assets; Material Leases................................................. 40
Section 5.8 Intellectual Property............................................................ 40
Section 5.9 Indebtedness for Borrowed Money.................................................. 41
Section 5.10 Litigation....................................................................... 41
Section 5.11 No Materially Adverse Contracts.................................................. 41
Section 5.12 Taxes and Tax Returns, Etc....................................................... 41
Section 5.13 Contracts with Affiliates, Etc................................................... 42
Section 5.14 Employee Benefit Plans........................................................... 42
Section 5.15 Governmental Regulation.......................................................... 42
Section 5.16 Securities Activities............................................................ 43
Section 5.17 Disclosure....................................................................... 43
Section 5.18 No Material Default.............................................................. 43
Section 5.19 Environmental Conditions......................................................... 43
Section 5.20 Licenses and Permits............................................................. 44
Section 5.21 Special Flood Hazard Determination............................................... 44
Section 5.22 General Collateral Representation................................................ 44
Section 5.23 Year 2000 Compatibility.......................................................... 45
</TABLE>
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<TABLE>
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ARTICLE 6 AFFIRMATIVE COVENANTS OF BORROWER......................................................... 45
Section 6.1 Reports and Other Information.................................................... 46
Section 6.2 Maintenance of Property; Authorization; Insurance................................ 49
Section 6.3 Key Man Life Insurance........................................................... 50
Section 6.4 Entity Existence................................................................. 50
Section 6.5 Inspection Rights................................................................ 50
Section 6.6 Payment of Taxes and Claims...................................................... 50
Section 6.7 Compliance with Laws............................................................. 51
Section 6.8 Notice of Other Events........................................................... 51
Section 6.9 Communication with Accountants................................................... 51
Section 6.10 Payment of Indebtedness.......................................................... 51
Section 6.11 Payment of Fees.................................................................. 52
Section 6.12 Performance of Obligations Under Certain Documents............................... 52
Section 6.13 Governmental Consents and Approvals.............................................. 52
Section 6.14 Employee Benefit Plans and Guaranteed Pension Plans.............................. 53
Section 6.15 Further Assurances............................................................... 53
Section 6.16 Bank Services.................................................................... 53
Section 6.17 Use of Proceeds.................................................................. 53
ARTICLE 7 FINANCIAL COVENANTS
......................................................................................... 54
Section 7.1 EBITDA........................................................................... 54
Section 7.2 Interest Coverage Ratio.......................................................... 54
ARTICLE 8 NEGATIVE COVENANTS OF BORROWER............................................................ 54
Section 8.1 Limitation on Nature of Business................................................. 54
Section 8.2 Limitation on Fundamental Changes................................................ 54
Section 8.3 Restricted Payments.............................................................. 54
Section 8.4 Limitation on Disposition of Assets.............................................. 55
Section 8.5 Limitation on Investments........................................................ 56
Section 8.6 Acquisition of Margin Securities................................................. 56
Section 8.7 Limitation on Mortgages, Liens and Encumbrances.................................. 56
Section 8.8 No Additional Negative Pledges................................................... 57
Section 8.9 No Restrictions on Subsidiary Distributions to Borrowers......................... 57
Section 8.10 Limitation on Indebtedness....................................................... 57
Section 8.11 Transactions with Affiliates..................................................... 58
Section 8.12 Changes Relating to Senior Debt.................................................. 58
Section 8.13 No Additional Bank Accounts...................................................... 58
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES............................................................ 58
Section 9.1 Events of Default................................................................ 58
Section 9.2 Termination of Commitments and Acceleration of Obligations....................... 60
Section 9.3 Remedies......................................................................... 61
Section 9.4 No Implied Waiver; Rights Cumulative............................................. 62
Section 9.5 Set-Off; Pro Rata Sharing........................................................ 63
ARTICLE 10 CONCERNING THE AGENT AND THE LENDERS...................................................... 63
Section 10.1 Appointment of the Agent......................................................... 63
Section 10.2 Authority........................................................................ 63
Section 10.3 Acceptance of Appointment........................................................ 64
Section 10.4 Collateral Matters............................................................... 64
Section 10.5 Agency for Perfection............................................................ 65
</TABLE>
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Section 10.6 Application of Moneys............................................................ 65
Section 10.7 Reliance by the Agent............................................................ 66
Section 10.8 Exculpatory Provisions........................................................... 66
Section 10.9 Action by the Agent.............................................................. 66
Section 10.10 Amendments, Waivers and Consents................................................. 67
Section 10.11 Indemnification.................................................................. 67
Section 10.12 Reimbursement of the Agent....................................................... 68
Section 10.13 Sharing of Funds Received........................................................ 68
Section 10.14 Dealing with Lenders............................................................. 68
Section 10.15 Agent as Lender.................................................................. 68
Section 10.16 Duties Not to be Increased....................................................... 68
Section 10.17 Lender Credit Decisions.......................................................... 69
Section 10.18 Resignation of Agent............................................................. 69
Section 10.19 Assignment of Revolving Credit Notes; Participation.............................. 69
ARTICLE 11 PROVISIONS OF GENERAL APPLICATION......................................................... 70
Section 11.1 Term of Agreement................................................................ 70
Section 11.2 Notices.......................................................................... 70
Section 11.3 Survival of Representations...................................................... 71
Section 11.4 Power of Attorney................................................................ 72
Section 11.5 Amendments....................................................................... 72
Section 11.6 Costs, Expenses, Taxes and Indemnification....................................... 72
Section 11.7 Language......................................................................... 73
Section 11.8 Binding Effect; Assignment....................................................... 73
Section 11.9 Governing Law; Jurisdiction and Venue............................................ 73
Section 11.10 Waiver of Jury Trial............................................................. 74
Section 11.11 Waivers.......................................................................... 74
Section 11.12 Interpretation and Proof of Loan Documents....................................... 74
Section 11.13 Integration of Schedules and Exhibits............................................ 74
Section 11.14 Headings......................................................................... 74
Section 11.15 Counterparts..................................................................... 74
Section 11.16 Severability..................................................................... 75
Section 11.17 One General Obligation........................................................... 75
</TABLE>
<PAGE> 5
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INDEX OF DEFINITIONS
<TABLE>
<CAPTION>
Definition Page #
<S> <C>
Account Debtor ............................................................................................. 2
Accountants ................................................................................................ 2
Accounts ................................................................................................... 2
Affiliate .................................................................................................. 2
Agent ...................................................................................................... 2
Agent Deposit Account....................................................................................... 2, 22
Agent Disbursement Account.................................................................................. 2, 21
Assignment of Patents....................................................................................... 2
Assignment of Trademarks.................................................................................... 2
Blocked Account Agreement................................................................................... 3
Business Day ............................................................................................... 3
Capital Expenditure......................................................................................... 3
Capital Lease .............................................................................................. 3
Capital Lease Obligation.................................................................................... 3
Capital Stock .............................................................................................. 3
Cash Equivalents ........................................................................................... 3
Cash Flow .................................................................................................. 4
Cash Flow Available for Debt Service........................................................................ 4
Cash Interest Expense....................................................................................... 4
Casualty Loss .............................................................................................. 4
CFADS ...................................................................................................... 4
Change in Control .......................................................................................... 4
Chattel Paper .............................................................................................. 4
Closing Date ............................................................................................... 4
Code ....................................................................................................... 4
Collateral ................................................................................................. 5
Commitment Fee ............................................................................................. 5
Common Stock ............................................................................................... 5
Compliance Certificate...................................................................................... 5
Computation Date ........................................................................................... 5
Consolidated ............................................................................................... 5
Contingent Obligation....................................................................................... 5
Credit Commitment .......................................................................................... 6
Current Assets ............................................................................................. 6
Current Balance Sheet....................................................................................... 40
Current Financial Statements................................................................................ 40
Current Liabilities......................................................................................... 6
Current Ratio .............................................................................................. 6
Default .................................................................................................... 6
Default Interest Rate....................................................................................... 6
Documents .................................................................................................. 6
Draw Date .................................................................................................. 6
EBITDA ..................................................................................................... 6
Employee Benefit Plan....................................................................................... 7
Environmental Laws.......................................................................................... 7
EPA Permits ................................................................................................ 43
Equipment .................................................................................................. 7
Equity Interests ........................................................................................... 7
Equity Offering ............................................................................................ 7
</TABLE>
<PAGE> 6
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<TABLE>
<S> <C>
ERISA ...................................................................................................... 7
ERISA Affiliate ............................................................................................ 7
ERISA Liabilities .......................................................................................... 7
Event of Default ........................................................................................... 8
Excess Cash Flow ........................................................................................... 8
Extraordinary Disposition................................................................................... 8
Fair Market Value .......................................................................................... 8
Fee Mortgages .............................................................................................. 8
FEMA ....................................................................................................... 8
Fixed Charges .............................................................................................. 8
GAAP ....................................................................................................... 9
General Intangibles......................................................................................... 9
Generally Accepted Accounting Principles.................................................................... 9
Goods ...................................................................................................... 9
Guaranteed Pension Plan..................................................................................... 9
Hazardous Substances........................................................................................ 9
Head Office ................................................................................................ 9
Holdings ................................................................................................... 18
Indebtedness ............................................................................................... 9
Indebtedness for Borrowed Money............................................................................. 10
Instruments ................................................................................................ 11
Intellectual Property....................................................................................... 11
Interest Expense ........................................................................................... 11
Interest Period ............................................................................................ 11
Interest Rate .............................................................................................. 12
Inventory .................................................................................................. 12
Investment ................................................................................................. 12
Legal Requirements.......................................................................................... 12
Lenders .................................................................................................... 12
Liabilities ................................................................................................ 13
Libor ...................................................................................................... 13
Libor Break Funding Costs................................................................................... 13
Libor Break Funding Event................................................................................... 13
Libor Rate ................................................................................................. 13
Libor Rate Loan ............................................................................................ 13
Licenses and Permits........................................................................................ 13
Lien ....................................................................................................... 14
Litigation ................................................................................................. 14, 41
Loan Documents ............................................................................................. 14
Loan Year .................................................................................................. 14
Loans ...................................................................................................... 14
Long-Term Lease ............................................................................................ 14
Management Shareholders..................................................................................... 14
Margin Ratio ............................................................................................... 14
Material Adverse Effect..................................................................................... 14
Material Lease ............................................................................................. 14
Maximum Credit Liability.................................................................................... 14
Maximum Revolving Commitment................................................................................ 15, 23
Mortgages .................................................................................................. 15
Multiemployer Plan.......................................................................................... 15
Net Income ................................................................................................. 15
Net Proceeds ............................................................................................... 15
Net Worth .................................................................................................. 15
</TABLE>
<PAGE> 7
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<TABLE>
<S> <C>
Notice of Acceleration...................................................................................... 60
Obligations ................................................................................................ 16
Participation Percentage.................................................................................... 16
Patents .................................................................................................... 16
Permitted Liens ............................................................................................ 16, 56
Person ..................................................................................................... 16
Pledge Agreement ........................................................................................... 16
Pledged Stock .............................................................................................. 16
Preferred Stock ............................................................................................ 16
Premises ................................................................................................... 16
Prime Rate ................................................................................................. 16
Prime Rate Loan ............................................................................................ 17
Pro Rata Share ............................................................................................. 17
Proceeds ................................................................................................... 17
Projections ................................................................................................ 17
Property ................................................................................................... 17
Rate Option ................................................................................................ 17
Real Estate ................................................................................................ 17
Reference Period ........................................................................................... 17
Requisite Lenders .......................................................................................... 18
Restricted Payment.......................................................................................... 18
Revolving Credit Loan....................................................................................... 18
Revolving Credit Notes...................................................................................... 18
SEC ........................................................................................................ 18
Securities ................................................................................................. 18
Security Documents.......................................................................................... 19
Standard Flood Hazard Determination Form.................................................................... 19
Subsidiary ................................................................................................. 19
Subsidiary Net Worth........................................................................................ 19
Termination Date ........................................................................................... 19
Termination Event .......................................................................................... 20
Trademarks ................................................................................................. 20
UCC ........................................................................................................ 20
UCC Financing Statements.................................................................................... 20
Valuable Transfers.......................................................................................... 20
Working Capital ............................................................................................ 21
</TABLE>
<PAGE> 8
SCHEDULES
1 Lenders
3.1 Exceptions to Mortgaged Property
5.1(a) Jurisdictions where qualified to do business
5.1(b) Capital Stock
5.1(d) Non-Subsidiary Capital Stock Ownership
5.7 Material Leases of Property
5.8 Intellectual Property
5.12(c) Pending or Threatened Audits
5.13 Affiliate Agreements
5.21 Exceptions to Flood Hazard Determination
5.22 UCC Filing Offices
5.24 Franchise Agreements
8.7(f) Permitted Liens
<PAGE> 9
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of July 1, 1998 ("Credit Agreement") is
by and among ROMACORP OPERATING COMPANY, INC., a Delaware corporation,
("Romacorp"), ROMACORP, INC., a Delaware corporation, ROMA SYSTEMS, INC., a
Delaware corporation, ROMA FRANCHISE CORPORATION, a Delaware corporation, ROMA
HOLDINGS, INC., a Delaware corporation, and ROMA DINING LP, a Delaware limited
partnership (hereinafter, together with their successors in title and assigns
called "Borrowers" and each of which is a "Borrower"), the banks and lending
institutions set forth on Schedule 1 (the "Lenders") and THE PROVIDENT BANK, an
Ohio banking corporation, ("Provident") executing this Agreement in its capacity
of Agent for the Lenders under this Agreement (hereinafter called "Provident" or
"Agent").
WHEREAS, the Borrowers have requested that Lender establish a line of
credit for Borrowers for, among other things, purposes of the Recapitalization
and for financing working capital and for general corporate purposes; and
WHEREAS, pursuant to the Recapitalization, Romacorp will change its
name to Romacorp, Inc. and Holdings will change its name to Roma Restaurant
Holdings, Inc.
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Provisions Pertaining to Definitions. For all purposes of
this Credit Agreement (except where such interpretations would be inconsistent
with the context or the subject matter):
(a) The expression "this Agreement" shall mean this Credit
Agreement (including all of the Schedules and Exhibits annexed hereto) as
originally executed, or, if supplemented, amended or restated from time to time,
as so supplemented, amended or restated;
(b) Where appropriate, words importing the singular only shall
include the plural and vice versa, and all references to dollars shall be United
States Dollars; and
(c) Accounting terms not otherwise defined herein shall have
the meanings customarily given in accordance with Generally Accepted Accounting
Principles (as hereinafter defined) and all financial computations or
determinations to be made under this Credit Agreement shall, unless otherwise
specifically provided herein, be made in accordance with the financial
statements delivered pursuant to Section 4.1(w) and shall be made on a
Consolidated basis.
Section 1.2 Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the following meanings in this
Agreement:
- 1 -
<PAGE> 10
"Accountants" mean Ernst & Young LLP, or such other nationally
recognized firm of certified public accountants selected by Holdings and
acceptable to Agent and Lenders.
"Account Debtor" means any Person obligated for the payment of an
Account.
"Accounts" mean, with respect to any Person, such Person's accounts,
rental agreements and other contract rights, rights to payment and other forms
of obligation for the payment of money, whether now existing or existing in the
future, including, without limitation, all (i) accounts receivable (whether or
not specifically listed on schedules furnished to the Agent), all accounts
created by or arising from all of such Person's sales of goods, financial
instruments, documents, permits or other items, or rendition of services,
including funds transfer services, made under any of such Person's trade names
or styles, or through any of such Person's subsidiaries or divisions, and all
accounts acquired by assignment in the ordinary course of business; (ii) unpaid
seller's rights (including rescission, replevin, reclamation and stopping in
transit) relating to the foregoing or arising therefrom; (iii) rights to any
goods represented by any of the foregoing, including returned or repossessed
goods; (iv) reserves and credit balances held by such Person with respect to any
such accounts receivable or account debtors; (v) guarantees or collateral for
any of the foregoing; and (vi) insurance policies or rights relating to any of
the foregoing.
"Affiliate" means, in relation to any Person (in this definition called
"Affiliated Person"), any Person (i) which (directly or indirectly) controls or
is controlled by or is under common control with such Affiliated Person; (ii)
which (directly or indirectly) owns or holds five percent (5%) or more of any
equity interest in any Borrower; or (iii) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or held by
such Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise.
"Agent" means Provident acting in the capacity as Agent for the Lenders
under the Loan" Documents and includes (where the context so admits) any other
Person or Persons succeeding to the functions of Agent under such documents.
"Agent Deposit Account" has the meaning set forth in Section 2.3(d)
hereof.
"Agent Disbursement Account" has the meaning set forth in Section
2.3(b) hereof.
"Assignment of Franchise Rights and Agreements" means the Assignment of
Franchise Rights and Agreements from a Borrower to Agent in the form of Exhibit
K hereto.
"Assignment of Patents" means the Grant of Security Interest in Patents
from a Borrower to Agent in the form of Exhibit A hereto.
"Assignment of Trademarks" means the Grant of Security Interest in
Trademarks from a Borrower to Agent in the form of Exhibit B hereto.
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<PAGE> 11
"Blocked Account Agreement" shall mean the Blocked Account Agreement
between a Borrower and Agent in the form of Exhibit C hereto, acknowledged by
each financial institution with which any Borrower maintains deposits, pursuant
to which such financial institutions shall agree not to permit funds in such
bank accounts to be disbursed except to the Agent Disbursement Account, or any
other account maintained at or controlled by the Agent.
"Business Day" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cincinnati, Ohio and
Dallas, Texas.
"Capital Expenditure" means any amount paid or incurred in connection
with the purchase of real estate, plant, machinery, equipment or other similar
expenditure (including all renewals, improvements and replacements thereto, and
all obligations under any lease of any of the foregoing) which would be required
to be capitalized and shown on the Consolidated balance sheet of Borrower in
accordance with GAAP.
"Capital Lease" means any lease of Property which has been or is
required to be capitalized on a Borrower's financial statements in accordance
with GAAP.
"Capital Lease Obligation" means any obligation to pay rent or other
amounts under a Capital Lease and, for the purpose of this Agreement, the amount
of such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) or corporate stock, whether
common or preferred, including, without limitation, partnership interests.
"Cash Equivalents" mean: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within three (3) months from the date of acquisition thereof;
(ii) investments in certificates of deposit or bankers' acceptances maturing
within three (3) months from the date of acquisition issued by any Lender or any
commercial bank organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at least Two
Hundred Fifty Million Dollars ($250,000,000); (iii) investments in commercial
paper of any Lender or of any other Person which, at the time of issuance, have
a rating of at least A-1 from Standard & Poor's Corporation or at least P-1 from
Moody's Investors Service, Inc. and maturing not more than six (6) months from
the date of acquisition thereof; (iv) obligations of the type described in (i),
(ii) or (iii) above purchased pursuant to a repurchase agreement obligating the
counterparty to repurchase such obligations not later than thirty (30) days
after the purchase thereof, secured by a fully perfected security interest in
any such obligation, and having a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation of
the issuing bank; and (v) time deposits or Eurodollar time deposits maturing no
more than thirty (30) days from the date of creation with commercial banks
having membership in the Federal Deposit Insurance Corporation in amounts not
exceeding the lesser of One Hundred Thousand Dollars ($100,000) or the maximum
insurance applicable to the aggregate amount of such Person's deposits in such
institution.
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<PAGE> 12
"Cash Flow" means, for any period, the following, each calculated for
such period, without duplication: (i) EBITDA, less (ii) income and franchise
taxes actually paid by a Borrower (net of any refunds received) (including
decreases in deferred income taxes resulting from tax payments actually made),
less (iv) Capital Expenditures (to the extent actually made in cash by a
Borrower and excluding the non-current portion of Capital Expenditures which
have been financed).
"Cash Flow Available for Debt Service" or "CFADS" means for any period,
the sum of Net Income from continuing operations, but without deduction of
income and franchise taxes, plus an amount equal to any non-cash expense items
and any extraordinary expense items minus an amount equal to any extraordinary
income items and any cash expended for Capital Expenditures, all of which shall
be determined and reported in accordance with GAAP.
"Cash Interest Expense" means the aggregate amount of all interest
expense of the Borrower on Indebtedness for Borrowed Money (net of interest
income) paid but not accrued.
"Casualty Loss" means any occurrence or event pursuant to which any
asset or property owned or used by Borrower is (i) damaged or destroyed, or
suffers any other loss, or (ii) condemned, confiscated or otherwise taken, in
whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise.
"Change of Control" means the time at which (i) any Person (including a
Person's Affiliates and associates) or group (as that term is understood under
Section 13(d) of the Exchange Act and the rules and regulations thereunder),
other than Sentinel, Holdings and NPC Restaurant Holdings, Inc. and their
Affiliates (the "Control Group") or a group controlled by the Control Group, has
become the beneficial owner of a percentage (based on voting power, in the event
different classes of stock shall have different voting powers) of the voting
stock of Romacorp equal to at least fifty percent (50%), (ii) there shall be
consummated any consolidation or merger of a Borrower pursuant to which any
Borrower's Capital Stock would be converted into cash, securities or other
property, other than a merger or consolidation of such Borrower in which the
holders of such Capital Stock immediately prior to the merger have the same
proportionate ownership, directly or indirectly, of Capital Stock of the
surviving corporation immediately after the merger as they had of such
Borrower's Capital Stock immediately prior to such merger, or (iii) all or
substantially all of a Borrower's assets shall be sold, leased, conveyed or
otherwise disposed of as an entirety or substantially as an entirety to any
Person (including an Affiliate or associate of such Borrower) in one or a series
of transactions.
"Chattel Paper" means any "chattel paper" as such term is defined in
Section 9-105(1)(b) of the UCC, now owned or hereafter acquired.
"Closing Date" means July 1, 1998.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any successor federal tax code, and any reference
to any statutory provision shall be deemed to be a reference to any successor
provision or provisions.
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"Collateral" means all Accounts, Inventory, Equipment, General
Intangibles, fixtures, Goods, motor vehicles, leasehold improvements, Documents,
Instruments, Pledged Interests, Chattel Paper, Intellectual Property, Inventory
subject to leases and rights under lease agreements for the leasing of
inventory, money, deposit accounts, rights to draw on letters of credit,
permits, licenses and the cash or noncash Proceeds (including insurance or other
rights to receive payment with respect thereto) of any of the foregoing and all
accessions and additions to and replacements of the foregoing, and all books and
records (including, without limitation, customer lists, credit files, computer
programs, printouts and other computer materials and records of each Borrower)
pertaining to any of the foregoing or any of the Premises herein, together with
the real property, leasehold interests, buildings and fixtures described in the
Mortgages, and all other property and rights assigned by a Borrower to Agent, on
behalf of the Lenders, to secure Borrower's obligations under the Loan
Documents, all of the above whether now owned or hereafter acquired.
"Collateral Assignment of Transitional Financial and Accounting
Services Agreement" means the Collateral Assignment of Transitional Financial
and Accounting Services Agreement from Romacorp to Agent, and consented and
acknowledged to by NPC, in the form of Exhibit L hereto.
"Commitment Fee" means a fee equal to three eighths of one percent
(0.375%) per annum (computed on the basis of a 360-day year for the actual
number of days elapsed) on the daily unused amount of the Maximum Revolving
Commitment.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Credit Agreement, and includes, without
limitation, all series and classes of such common stock.
"Compliance Certificate" means a certificate, substantially in the form
of Exhibit D hereto, which certificate evidences the compliance by each Borrower
with the covenants of this Agreement.
"Computation Date" means the last day of the Fiscal Period closest to
the last day of each March, June, September and December.
"Consolidated" means, with respect to any accounting matter or amount,
such matter or amount computed on a consolidated basis for Holdings and each
Borrower, as the case may be, and any subsidiaries in accordance with GAAP.
"Contingent Obligation" means any direct or indirect liability,
contingent or otherwise, with respect to any Indebtedness, lease, dividend,
letter of credit, banker's acceptance or other obligation of another if the
primary purpose or intent thereof in incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof.
Contingent Obligations shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (ii) any
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<PAGE> 14
liability for the obligations of another through any agreement (contingent or
otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (B) to maintain the solvency of any balance sheet
item, level of income or financial condition of another, or (C) to make
take-or-pay, pay-or-play or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, if in the case of
any agreement described under subclauses (A), (B) or (C) of this sentence the
primary purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"Credit Commitment" means, in relation to any particular Lender, the
maximum amount with respect to the Loans to be loaned by such Lender to
Borrowers as set forth on Schedule 1.
"Current Assets" and "Current Liabilities" mean at any time, all assets
or liabilities, respectively, that, in accordance with GAAP should be classified
as current assets or current liabilities, respectively, on a Borrower's balance
sheet.
"Current Ratio" means the ratio of Current Assets (excluding cash, Cash
Equivalents, and any amounts due from Affiliates) to Current Liabilities
(excluding from Current Liabilities for the purpose of this definition of
Current Ratio, the current portion of any long term Indebtedness for Borrowed
Money and any amounts due to Affiliates).
"Default" means any event or occurrence which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.
"Default Interest Rate" means an annual rate of interest which shall
(to the extent permitted by applicable law) at all times be equal to two percent
(2.0%) above the applicable Interest Rate for a Loan.
"Documents" mean any "documents," as such term is defined in Section
9-105(l)(f) of the UCC, now owned or existing or hereafter arising or acquired.
"Draw Date" means in relation to any Loan, the day on which such Loan
is made or to be made to Borrowers pursuant to this Agreement.
"EBITDA" for any period shall mean, without duplication, (i) Net
Income; plus (ii) for such period any Interest Expense deducted in the
determination of Net Income; plus (iii) any income, ad valorem, and franchise
taxes paid in cash and included in the determination of Net Income; plus (iv)
amortization and depreciation and other non-cash charges deducted in determining
Net Income for such period; plus (v) extraordinary losses, losses on sales of
assets (other than sales of inventory in the ordinary course of business) and
unrealized gains from changes in currency; plus (vi) for any fiscal year of
Borrowers commencing on or after 2000, pre-opening expenses deducted in
determining Net Income for such period relating to the opening of restaurants
not to exceed $3,000,000 in any one fiscal year; minus (vii) the sum for such
period of interest income,
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<PAGE> 15
extraordinary gains, gains from sales of assets (other than sales of inventory
in the ordinary course of business) and unrealized losses from changes in
currency.
"Employee Benefit Plan" means an "employee benefit plan" as defined in
Section 3(3) of ERISA.
"Employment Agreement" means the Management Agreement, dated as of July
1, 1998 between Romacorp and Robert B. Page.
"Environmental Laws" mean individually or collectively any local, state
or federal law, statute, rule, regulation, order, ordinance, common law, permit
or license term or condition, or state superlien or environmental clean-up or
disclosure statutes pertaining to the environment or to environmental
contamination, regulation, management, control, treatment, storage, disposal,
containment, removal, clean-up, reporting, or disclosure, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), as now or hereafter amended (including, but not limited
to, the Superfund Amendments and Reauthorization Act ("SARA")); the Resource
Conservation and Recovery Act ("RCRA"), as now or hereafter amended (including,
but not limited to, the Hazardous and Solid Waste Amendments of 1984); the Toxic
Substances Control Act ("TSCA"), as now or hereafter amended; the Clean Water
Act, as now or hereafter amended; the Safe Drinking Water Act, as now or
hereafter amended; or the Clean Air Act, as now or hereafter amended.
"Equipment" means any "equipment," as such term is defined in Section
9-109(2) of the UCC, now owned or hereafter acquired and shall include, without
limitation, any and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts
and accessories installed thereon or affixed thereto.
"Equity Interests" mean Capital Stock and all warrants, options or
other rights to acquire Capital Stock or that are measured by the value of
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for Capital Stock).
"Equity Transaction" means the cash equity investment by shareholders
of Holdings in the aggregate amount of not less than Twenty Seven Million
Dollars ($27,000,000).
"ERISA" means the Employee Retirement Income Security Act of 1974 and
regulations issued thereunder, as amended from time to time and any successor
statute.
"ERISA Affiliate" means, in relation to any Borrower, any Borrower or
Subsidiary of a Borrower (whether or not incorporated) which is a member of a
group of which that Borrower is a member and which is under common control
within the meaning of the regulations promulgated under Section 414 of the
Internal Revenue Code of 1986, as amended.
"ERISA Liabilities" mean the aggregate of all unfunded vested benefits
under any employee pension benefit plan, within the meaning of Section 3(2) of
ERISA, of a Borrower or any ERISA Affiliate of such Borrower under any Plan
covered by ERISA that is not a Multiemployer Plan and all potential withdrawal
liabilities of any thereof under all Multiemployer Plans.
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<PAGE> 16
"Event of Default" means any event or condition described in Section
9.1 of this Agreement.
"Excess Cash Flow" means, for any period, the total of the following
for Romacorp on a Consolidated basis, each calculated (without duplication) for
such period: (i) Cash Flow; minus (ii) scheduled amortization of principal and
interest and all voluntary prepayments of long term Indebtedness for Borrowed
Money actually paid (it being understood that no voluntary prepayment of the
Revolving Credit Loan shall be included in this clause (ii)); minus (iii) cash
dividends and distributions paid on Borrower's Capital Stock to the extent
permitted under this agreement; minus (iv) increases in Working Capital; and
plus (v) decreases in Working Capital.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
"Extraordinary Disposition" means, with respect to a Borrower, the
sale, lease, transfer or other disposition of assets, other than (i)
sale-leaseback transactions in the aggregate amount not to exceed $5,000,000,
and (ii) assets transferred or disposed in the ordinary course of business,
whether by way of the sale of assets or the sale of stock or other rights in
which a Borrower has any ownership interest, and whether in one transaction or a
series of related or unrelated transactions, including, without limitation, the
licensing of Intellectual Property.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free-market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of a Borrower acting
reasonably and in good faith and shall be evidenced by a board resolution
(certified by the secretary or assistant secretary of a Borrower) delivered to
the Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Mortgages" means the real estate mortgages or deeds of trust
granted from time to time by a Borrower to Agent to secure the Loans,
substantially in the form of Exhibit E hereto, and as they may be amended or
supplemented from time to time.
"FEMA" means the Federal Emergency Management Agency, or any similar
successor agency of the federal government.
"Fiscal Period" means, for each Borrower, a fiscal period of either
four or five weeks, in accordance with customary and historical reporting
practices of such Borrower.
"Fixed Charges" mean, for any period, the following, each calculated
for such period, without duplication: (i) Interest Expense paid or accrued,
minus (ii) interest income earned or
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<PAGE> 17
accrued by a Borrower as determined in accordance with GAAP, plus (iii)
scheduled payments of principal with respect to all Indebtedness for Borrowed
Money of a Borrower including the principal component of any cash payments made
on any Capital Lease.
"General Intangibles" means any "general intangibles" as such term is
defined in Section 9-106 of the UCC, now owned or hereafter acquired and, in
any event, shall include, without limitation, all right, title and interest now
in existence or hereafter arising in or to all customer lists, trademarks,
patents, rights in intellectual property, trade names, copyrights, trade
secrets, proprietary or confidential information, inventions and technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, processes, models, drawings, materials, and records now owned or hereafter
acquired, and any and all goodwill and rights of indemnification.
"Generally Accepted Accounting Principles" or "GAAP" mean generally
accepted accounting principles in the United States of America in effect from
time to time, consistently applied.
"Goods" mean any item which qualifies as "goods" as such term is
defined in Section 9-105(h) of the UCC, now owned or hereafter acquired.
"Guaranteed Pension Plan" means any pension plan maintained by a
Borrower or an ERISA Affiliate of a Borrower, or to which a Borrower or an ERISA
Affiliate contributes, some or all of the benefits under which are guaranteed by
the United States Pension Benefit Guaranty Corporation ("PBGC").
"Hazardous Substances" mean any and all hazardous and toxic substances,
wastes or materials, any pollutants, contaminants, or dangerous materials
(including, but not limited to, polychlorinated biphenyls, friable asbestos,
volatile and semi-volatile organic compounds, oils, petroleum products and
fractions, and any materials which include hazardous constituents or become
hazardous, toxic, or dangerous when their composition or state is changed), or
any other similar substances or materials which are included under or regulated
by any Environmental Law.
"Head Office" means, in relation to the Agent, the head office of The
Provident Bank located at One East Fourth Street, Cincinnati, Ohio 45202 or such
office designated in writing to Borrowers and Lenders by The Provident Bank or
any successor Agent.
"Holdings" means Romacorp, Inc., a Delaware corporation.
"Indebtedness" means, in relation to any Person, at any particular
time, all of the obligations of such Person which, in accordance with GAAP,
would be classified as indebtedness upon a balance sheet including any footnote
thereto of such Person prepared at such time, and in any event shall include,
without limitation, and without duplication:
(i) all indebtedness of such Person arising or
incurred under or in respect of (A) any guaranties (whether direct or
indirect) by such Person of the indebtedness, obligations or
liabilities of any other Person, or (B) any endorsement by such Person
of any of the indebtedness, obligations or liabilities of any other
Person (otherwise than as an
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<PAGE> 18
endorser of negotiable instruments received in the ordinary course of
business and presented to commercial banks for collection of deposit),
or (C) the discount by such Person, with recourse to such Person, of
any of the indebtedness, obligations or liabilities of any other
Person;
(ii) all indebtedness of such Person arising or
incurred under or in respect of any agreement, contingent or otherwise
made by such Person (A) to purchase any indebtedness of any other
Person or to advance or supply funds to the payment or purchase of any
indebtedness of any other Person, or (B) to purchase, sell or lease (as
lessee or lessor) Property, products, materials or supplies or to
purchase or sell transportation or services, primarily for the purpose
of enabling any other Person to make payment of any indebtedness of
such other Person or to assure the owner of such other Person's
indebtedness against loss, regardless of the delivery or non-delivery
of the Property, products, materials or supplies or the furnishing or
non-furnishing of the transportation or services, or (C) to make any
loan, advance, capital contribution or other investment in any other
Person for the purpose of assuring a minimum equity, asset base,
working capital or other balance sheet condition for or as at any date,
or to provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner
invest in any other Person;
(iii) all indebtedness, obligations and liabilities
secured by or arising under or in respect of any Lien, upon or in
Property owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness, obligations and
liabilities;
(iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person, even though the rights and remedies
of the seller or lender (or lessor) under such agreement in the event
of default are limited to repossession or sale of such Property; and
(v) all indebtedness arising or incurred under or in
respect of any Contingent Obligation.
"Indebtedness for Borrowed Money" means at any particular time, all
Indebtedness (i) in respect of any money borrowed; (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; or (iv) Capital
Lease Obligations.
"Initial Public Offering" shall mean (i) the time at which Romacorp or
Holdings becomes a registered public company under the Exchange Act subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, or (ii)
the first time at which an offering, whether primary or secondary, of Capital
Stock or options, warrants or other securities convertible into or exchangeable
or exercisable for Capital Stock, is registered pursuant to an effective
registration statement (other than a registration statement on Form S-4 or Form
S-8 or any successor forms thereto) filed by Romacorp Holdings under the
Securities Act of 1933, as amended, or (iii) the
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<PAGE> 19
merger of Romacorp Holdings into a corporation or other entity which at the time
of such merger is required to file reports, proxy statements and other
information with the Securities and Exchange Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act. An Initial Public Offering will
be deemed to be consummated (i) on the date such registration is declared
effective by the Securities and Exchange Commission and (ii) in the case of a
merger, upon the effectiveness of the merger.
"Instruments" mean any "instrument," as such term is defined in Section
9-105(1)(i) of the UCC, now owned or hereafter acquired.
"Intellectual Property" shall mean all Patents and Trademarks, together
with (a) all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other agreements granted
to any obligor with respect to any of the foregoing, in each case whether now or
thereafter owned or used including, without limitation, the licenses or other
agreements with respect to the Patents or Trademarks, on Schedule 5.8; (c) all
information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media on which or in which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data, in each case owned by a Borrower; (f) all licenses,
consents, permits, variances, certifications and approvals of governmental
agencies now or hereafter held by Borrowers; and (g) all causes of action,
claims and warranties now or hereafter owned or acquired by Borrowers in respect
of any of the items listed above.
"Interest Expense" means, for any period, the total amount of all
charges for the use of funds (whether characterized as interest, debt service or
otherwise) payable during such period with respect to all Indebtedness for
Borrowed Money of a Borrower for such period, including without limitation, the
nets costs under any interest rate swap, interest rate cap, interest rate collar
or similar arrangement designed to protect a Borrower against the effect of
fluctuations in the Interest Rate excluding any amortization or write-off of
deferred financing costs.
"Interest Period" means:
(a) For each Libor Rate Loan, the period commencing on the
Draw Date and ending one, two or three months thereafter; provided that
(i) any Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the
next preceding Business Day;
(ii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the
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<PAGE> 20
calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(iii) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date
shall end on the Termination Date; and
(b) For a Prime Rate Loan, the period ending on the earlier of
repayment by the Borrower, the date on which such Prime Rate Loan is converted
to a Libor Rate Loan pursuant to Section 2.4(a) hereof, or the Termination Date.
"Interest Rate" means for a Libor Loan or Prime Rate Loan, an annual
rate of interest which shall be determined pursuant to Section 2.6 hereto.
"Inventory" means, with respect to any Person, such Person's inventory,
including without limitation: (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in such Person's
business, wherever located and whether in the possession of such Person or any
other Person; (ii) all goods, wares and merchandise, finished or unfinished,
held for sale or lease or leased or furnished or to be furnished under contracts
of service, wherever located and whether in the possession of such Person or any
other Person; and (iii) all goods returned to or repossessed by such Person.
"Investment" means all investments in any other Person by stock
purchase, capital contribution, loan, advance, guaranty of any Indebtedness or
creation or assumption of any other liability in respect of any Indebtedness of
such other Person (including, without limitation, any liability of any kind
described in clause (i) or (ii) of the definition of the term "Indebtedness" set
forth in this Section 1.2), or the transfer or sale of Property (otherwise than
in the ordinary course of the business) to any other Person for less than
payment in full in cash of the transfer or sale price or the fair value thereof
(whichever of such price or value is higher).
"Issuing Bank" means Provident or such other Lender as shall issue any
Letter of Credit hereunder.
"Legal Requirements" mean all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards, permits,
licenses, authorizations, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, and officials
and officers thereof, that are now or at any time in the future in effect.
"Lenders" mean collectively each of the banks or lending institutions
set forth on Schedule 1 and their respective successors and assigns; and
"Lender" means any one of the Lenders.
"Letter of Credit Fee" means the fee charged by the Issuing Bank for
the issuance of a Letter of Credit pursuant to Section 2.5(g) hereof.
"Letters of Credit" means the letters of credit issued by the Issuing
Bank at any time pursuant to Section 2.5 hereof.
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"Liabilities" mean all indebtedness, obligations and other liabilities
of a Borrower whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, secured or unsecured
arising by contract, operation of law or otherwise, classified as liabilities in
accordance with GAAP on a balance sheet of a Borrower.
"Libor" shall mean the rate (rounded upward to the next highest 1/100
of 1%) obtained by dividing (x) the rate of interest per annum determined by the
Agent equal to the offered rates for deposits in U.S. Dollars of one, two, three
or six-month periods (as the case may be) commencing of the first date of the
applicable Interest Period for which such rate is determined as such rate
appears on the Telerate system as of 11:00 a.m. (London, England time) on the
date which is two (2) Business Days preceding the first day of such Interest
Period, for a period comparable to the duration of such Interest Period and in
an amount comparable to the amount of the Libor Rate Loan to be outstanding
during such Interest Period, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserves required to be maintained against "Libor Rate
liabilities" as specified in Regulation D (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
Libor Rate Loans or loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States office of a bank to
United States residents) on such date to any member bank of the Federal Reserve
System.
"Libor Break Funding Costs" means an amount sufficient to reimburse
each Lender for any and all loss, cost or expense (including, without
limitation, any loss incurred in obtaining, liquidating or reemploying deposits
from third parties acquired to maintain any Revolving Credit Loan or part
thereof as a Libor Rate Loan) incurred or sustained by each of them as the
consequence of the occurrence of any Libor Break Funding Event. Such
indemnification shall include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid or repaid or not borrowed for the
period, beginning with the date of such payment, prepayment or repayment until
the last day of the Interest Period that would otherwise have been in effect for
such Libor Rate Loan, at the applicable rate of interest for such Libor Rate
Loan over (ii) the amount of interest (determined by Agent) that otherwise would
have accrued on such principal amount by reemploying such amount at a rate equal
to Libor for such period or nearest available period for deposits bearing a rate
equal to Libor.
"Libor Break Funding Event" means any of the events or occurrences set
forth in Sections 2.11(a) or 2.11(b).
"Libor Rate" shall mean for each Interest Period, the sum of Libor,
plus two and one quarter percent (2.25%) per annum.
"Libor Rate Loan" means a Loan which bears interest at the Libor Rate.
"Licenses and Permits" mean all licenses, permits, registrations and
recordings thereof and all applications incorporated into for such licenses,
permits and registrations now owned or hereafter acquired by a Borrower and
required from time to time for the business operations of a Borrower.
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"Lien" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest.
"Litigation" has the meaning set forth in Section 5.10 hereof.
"Loan Documents" mean this Agreement, the Revolving Credit Notes, the
Letters of Credit, the Security Documents and any other agreement, instrument,
certificate or document executed in connection with or pursuant to this
Agreement whether concurrently herewith or subsequent hereto.
"Loans" mean the Revolving Credit Loans or the Letters of Credit, where
applicable, each singly a Loan made or to be made to Borrowers by the Lenders
pursuant to this Agreement.
"Loan Year" means each period of twelve (12) consecutive months,
commencing on the Closing Date and on each anniversary thereof.
"Long-Term Lease" means any lease of real or personal property having
an original term, including any period which the lease may be renewed or
extended, at the option of the lessee, of more than three (3) years.
"Margin Ratio" means, as of any date, the ratio of (a) Indebtedness for
Borrowed Money of Borrower and its Subsidiaries as of the date of determination
to (b) Consolidated EBITDA (adjusted on a pro forma basis (including, without
limitation, pro forma adjustments for all non-recurring expenses) satisfactory
to Agent for any acquisitions during the period for which such calculation is
made and not reflected in current EBITDA as if such acquisition had occurred at
the beginning of the period for which such calculation is made, subject to
appropriate closing adjustments for such acquisitions) minus Capital
Expenditures incurred during the four fiscal quarters of Borrower immediately
prior to such date, all calculated for the four fiscal quarters ending on the
Computation Date immediately preceding the date for which such ratio is
calculated.
"Management Shareholders" means those shareholders of Romacorp or
Holdings or any Affiliate of Romacorp or Holdings who are management employees
of a Borrower on the Closing Date.
"Material Adverse Effect" means any event which will, or is reasonably
likely to, have a material adverse effect upon the financial condition,
operations or assets of a Borrower or the Collateral.
"Material Lease" means any lease under which a Borrower shall lease (as
lessee) or acquire the right to possess and/or use any Real Estate or other
Property or any other similar agreement (whether written or oral) pursuant to
which such Borrower pays an annual lease payment or rental payment equal to or
greater than Fifty Thousand Dollars ($50,000).
"Maximum Credit Liability" for any Borrower, other than Romacorp, shall
mean, as of any date of determination thereof, the sum of (i) with respect to
each Loan the proceeds of which are used to make or the issuance of which
constitutes a Valuable Transfer to such Borrower, the amount
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<PAGE> 23
of such Loan plus (ii) with respect to each Loan the proceeds of which are not
used to make or the issuance of which does not constitute a Valuable Transfer to
such Borrower, the lesser of (A) the outstanding amount of such Loan as of such
date or (B) the greater of (I) ninety-five percent (95%) of the Subsidiary Net
Worth at the time of such Loan or (II) ninety-five percent (95%) of the
Subsidiary Net Worth of such Borrower at the earliest of (x) such date, (y) the
date of the commencement of a case under Title 11 of the United States Code (or
any successor provision) in which such Borrower is a debtor or (z) the date
enforcement hereunder is sought.
"Maximum Revolving Commitment" means Fifteen Million and 00/100 Dollars
($15,000,000.00).
"Mortgages" means the Fee Mortgages, and each individually a
"Mortgage".
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of a Borrower, or any
ERISA Affiliate of a Borrower.
"Net Income" means, for any period, the aggregate of the net income (or
net loss) of a Borrower for such period, determined in accordance with GAAP, but
excluding, without duplication: (i) the income of any Person in which a Borrower
has an ownership interest, unless received by such Borrower in a cash
distribution; (ii) any after-tax gains or losses attributable to dispositions of
assets; (iii) the income of any Subsidiary of a Borrower to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at that time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary; and (iv) any after-tax
extraordinary non-cash gains or extraordinary non-cash losses.
"Net Proceeds" means the aggregate proceeds paid in cash or Cash
Equivalents received by a Borrower in respect of any Extraordinary Disposition,
net of direct costs relating to such Extraordinary Disposition (including
without limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions in any tax sharing arrangements), amounts required to be
applied in payment of Indebtedness secured by a Lien incurred in accordance with
this Agreement on the assets or assets that are subject of such Extraordinary
Disposition and which Indebtedness is required pursuant to the terms of the
instrument governing such Indebtedness or Lien or in order to obtain the
necessary consent to such sale to be repaid in connection with such
Extraordinary Disposition and any reserve for adjustment in respect of the sale
price of or other liability in respect of such asset or assets.
"Net Worth" means, at any date, Consolidated stockholders' equity
(including the par value or stated value of all outstanding capital stock,
additional paid-in capital and retained earnings) of Romacorp determined in
accordance with GAAP, except that there shall be deducted therefrom any amount
of treasury stock reflected as an asset of Romacorp or any Subsidiary of
Holdings.
"NPC" means NPC International, Inc., a Kansas corporation.
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"Obligations" means, collectively, all of the indebtedness, obligations
and liabilities existing on the date hereof or arising from time to time
hereafter, whether direct, indirect, absolute, contingent, joint or several,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, of a Borrower to the Agent or any
Lenders (i) in respect of the Loans made pursuant to this Agreement; or (ii)
under or in respect of any one or more of the Loan Documents. Obligations shall
also include all interest, charges and other fees chargeable hereunder to a
Borrower or due hereunder from a Borrower to Lenders from time to time and all
costs and expenses referred to in Section 11.6 herein.
"Participation Percentage" means, in relation to each Lender, the
percentage set forth with respect to such Lender on Schedule 1 with respect to
each Loan.
"Patents" shall mean all of the following in which a Borrower now holds
or hereafter acquires any interest: (i) all letters patent of the United States
or any country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof or any other country, and (ii) all reissues,
continuations, continuations-in-part or extensions thereof.
"Permitted Liens" means those Liens and encumbrances permitted
hereunder pursuant to Section 8.7.
"Person" shall include an individual, a company, a corporation, an
association, a partnership, a joint venture, an unincorporated trade or business
enterprise, a trust, an estate, or other legal entity or a government (national,
regional or local), court, arbitrator or any agency, instrumentality or official
of the foregoing.
"Pledge Agreement" means a pledge agreement or agreements with respect
to the Pledged Interests substantially in the form of Exhibit F-1 hereto in the
case of the pledge of common stock or Exhibit F-2 hereto in the case of the
pledge of partnership interests.
"Pledged Interests" means all of the Capital Stock of Borrowers and any
Subsidiary of a Borrower whether now existing or hereafter formed or acquired
other than Capital Stock issued to Management Shareholders pursuant to an
Employee Benefit Plan of a Borrower.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person (other than Common Stock of such Person) of any
class or classes (however designated) that rank prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Premises" means collectively, all real property and leasehold
interests now or hereinafter acquired by a Borrower, including without
limitation, all the Premises as defined in the Mortgages.
"Prime Rate" means the rate of interest announced from time to time by
Agent as its prime rate at its Head Office, whether or not Agent shall at times
lend to other borrowers at lower rates of
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<PAGE> 25
interest, or, if there is no such prime rate, then such other rate as may be
substituted by Agent for its Prime Rate.
"Prime Rate Loan" means a Loan which bears interest at the Prime Rate.
"Proceeds" means "proceeds," as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include, without limitation, (i)
any and all proceeds of any insurance, indemnity, warranty, or guaranty payable
from time to time with respect to any of the Collateral, and (ii) any and all
payments (in any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation, seizure, or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau, or agency (or any Person acting under color of governmental
authority).
"Projections" means Romacorp's forecasted Consolidated and
consolidating: (a) balance sheets, (b) profit and loss statements, and (c) cash
flow statements, consistent with Romacorp's historical financial statements,
together with, if requested by Agent, appropriate supporting details and
statements of underlying assumptions.
"Property" means all types of real, personal, tangible, intangible or
mixed property.
"Pro Rata Share" means, in relation to any particular item, the share
of any Lender in such item, which shall be in the same proportion which the
aggregate amount of all of the obligations owing to such Lender with respect to
such item at such time shall bear to the aggregate amount of all of the
obligations owing to all of the Lenders with respect to such item at such time
net of any and all charges or fees due and payable to Agent under the Loan
Documents.
"Rate Option" means the Prime Rate or the Libor Rate.
"Real Estate" means all real property owned or leased by a Borrower and
all real property hereafter acquired or leased by any Borrower, together with
all fixtures, rights of way, privileges, liberties, tenements, hereditaments,
and appurtenances belonging or in any way appertaining thereto, all easements
now or hereafter benefiting such real property and all royalties and rights
appertaining to the use and enjoyment of such real property, together with all
of the buildings, structures, and other improvements thereto.
"Recapitalization" means the recapitalization of Holdings pursuant to
the Recapitalization Agreement, dated as of April 24, 1998 by and among NPC
Restaurant Holdings, Inc., NPC, Sentinel and Holdings.
"Reference Period" means, with respect to a particular Computation
Date, the period of four (4) consecutive calendar quarters ending on such
Computation Date.
"Reimbursement Obligations" means any amounts owing by Borrowers to the
Issuing Bank on account of draws or disbursements under or with respect to the
Letters of Credit.
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<PAGE> 26
"Requisite Lenders" mean at such times as there are any Loans
outstanding, the Lenders whose aggregate Pro Rata Shares of the outstanding
Loans are greater than or equal to sixty-six and two-thirds percent (66 2/3%) of
the aggregate amount of the outstanding Loans, and at all other times, the
Lenders whose aggregate Credit Commitments are greater than or equal to
sixty-six and two-thirds percent (66 2/3%) of the aggregate Credit Commitments
of all the Lenders.
"Responsible Officer" (a) of a limited partnership means the general
partner of such limited partnership and if such limited partnership's general
partner is a corporation, then the chairman, vice-chairman, president, treasurer
or chief financial officer of such corporation; or (b) of a corporation means
any one or more of the corporation's or limited liability company's chairman,
vice-chairman, president, treasurer or chief financial officer.
"Restricted Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of Romacorp or any of its
Subsidiaries now or hereafter outstanding, except a dividend payable solely in
shares of that class of Capital Stock to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock or any notes or certificates evidencing Indebtedness of Holdings, Romacorp
or any of its Subsidiaries now or hereafter outstanding; (c) any payment or
prepayment of principal of, premium, if any, or interest on, redemption,
conversion, exchange, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, any subordinated indebtedness; and (d) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any Capital Stock of Romacorp or any of its
Subsidiaries now or hereafter outstanding.
"Revolving Credit Loan" means all Loans outstanding from time to time
made pursuant to Sections 2.2(a) and 2.3 hereof and any amounts added to the
principal balance of the Revolving Credit Loan pursuant to this Agreement.
"Revolving Credit Notes" mean, collectively, with respect to the
Revolving Credit Loan the promissory notes of Borrowers, in the face amounts of
the Revolving Credit Commitment of the respective Lenders in or substantially in
the form of Exhibit G hereto. "Revolving Credit Note" shall mean any one of the
Revolving Credit Notes.
"Romacorp" means Romacorp Operating Company, Inc., a Delaware
corporation with its chief executive office/principal place of business at 9304
Forest Lane, Suite 200, Dallas, Texas 75243.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Securities" mean any stock, shares, voting trust certificates, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participation
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
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<PAGE> 27
"Security Documents" shall mean, collectively, this Agreement, the
Mortgages, the Blocked Account Agreements, the Assignment of Patents, the
Assignment of Trademarks, the Assignment of Franchise Rights and Agreements, the
Collateral Assignment of Transitional Financial and Accounting Services
Agreement, the Pledge Agreements, and each other agreement, assignment or
instrument creating or purporting to create a lien in favor of Agent for the
ratable benefit of the Lenders.
"Senior Debt" means the Indebtedness of Romacorp acquired under the
Senior Debt Offering.
"Senior Debt Offering" means the issuance by Romacorp of approximately
$75,000,000 in aggregate principal amount of 12.0% Senior Notes due 2008.
"Sentinel" means Sentinel Capital Partners, L.P. and Sentinel Capital
Partners, L.P. II, as applicable.
"Standard Flood Hazard Determination Form" means Form 81-93 or any
successor or replacement thereof developed by FEMA pursuant to Section 528 of
the National Flood Insurance Reform Act of 1994 (42 U.S.C. 1365(a)), for
determining whether a building or structure is located in an area identified as
an area having special flood hazards, whether flood insurance is required and
whether flood insurance is available under 42 U.S.C. 4001, et seq.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of any Borrower (including each Borrower).
"Subsidiary Net Worth" of any Borrower, other than Romacorp, shall
mean, as of any date of determination thereof, the excess of (i) the amount of
the "present fair saleable value" of the assets of such Borrower as of the date
of such determination, over (ii) the amount of all "liabilities of such
Borrower, contingent or otherwise," as of the date of such determination, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors. In determining the
Subsidiary Net Worth of any Borrower for purposes of calculating the Maximum
Credit Liability, the liabilities of such Borrower to be used in such
determination pursuant to clause (ii) of the preceding sentence shall in any
event include the liabilities of such Borrower hereunder and under the other
Loan Documents in respect of all Loans other than the Loans in respect of which
such calculation is being made.
"Termination Date" means the earlier of (i) the fifth anniversary of
the Closing Date; (ii) the date upon which the entire principal of the Revolving
Credit Notes shall become due pursuant to the provisions hereof (whether as a
result of acceleration by Agent or the Requisite Lenders or
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<PAGE> 28
otherwise); or (iii) the date upon which the Credit Commitments terminate
pursuant to Section 9.2 hereof.
"Termination Event" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, but not including any such
event for which the 30 day notice requirement has been waived by applicable PBGC
regulation; or (ii) the withdrawal of a Borrower or an ERISA Affiliate of
Borrower from a Guaranteed Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or (iii) the
filing of a notice of intent to terminate a Guaranteed Pension Plan or the
treatment of a Guaranteed Pension Plan amendment as a termination under Section
4041 of ERISA; or (iv) the institution of proceedings to terminate a Guaranteed
Pension Plan by the Pension Benefit Guaranty Corporation; or (v) the withdrawal
or partial withdrawal of a Borrower or an ERISA Affiliate of a Borrower from a
Multiemployer Plan; or (vi) any other event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Guaranteed Pension Plan.
"Trademarks" shall mean all of the following in which any Borrower now
holds or hereafter acquires any interest: (i) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature, all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof or any other country, and (ii) all
reissues, extensions or renewals thereof.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Ohio; provided, however, that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of Lender's security interest in any of the Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Ohio, the term "UCC" shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection, or priority and for purposes of
definitions related to such provisions.
"UCC Financing Statements" mean the UCC financing statements naming the
Borrower, as debtors, and Agent, for the ratable benefit of Lenders, as
creditor, which UCC financing statements describe all or some portion of the
Collateral and which together perfect Agent's security interest in the
Collateral.
"Valuable Transfers" shall mean, in respect of any Borrower, (i) all
loans, advances or capital contributions made to or for the benefit of such
Borrower with proceeds of Loans, (ii) all debt securities or other obligations
of such Borrower acquired by such Borrower or retired by such Borrower with
proceeds of Loans, (iii) the fair market value of all property acquired with
proceeds of Loans, and transferred, absolutely and not as collateral, to such
Borrower, and (iv) all equity securities of such Borrower acquired by such
Borrower with proceeds of Loans.
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<PAGE> 29
"Working Capital" means the difference between (i) Current Assets,
excluding cash, Cash Equivalents, prepaid taxes and any amounts due from
Affiliates, and (ii) Current Liabilities, excluding the current portion of any
long term Indebtedness for Borrowed Money, accrued taxes and any amounts due to
Affiliates.
ARTICLE 2
THE LOANS
Section 2.1 Commitments. Each Lender, severally and not jointly,
agrees, upon the terms and subject to the conditions contained in this
Agreement, to make the Loans to Borrower from time to time prior to the
Termination Date, in a principal amount equal to such Lender's Participation
Percentage of the aggregate principal amount of such Loan request by Borrower on
each occasion.
Section 2.2 Making the Loans.
(a) Revolving Credit Loans. Each Lender will, subject to all
of the applicable terms and conditions of this Agreement, make an amount equal
to its Participation Percentage in each Revolving Credit Loan available to
Borrowers at such times and in such amount as shall be requested by Borrowers in
compliance with Section 2.3, and Borrowers may borrow on a revolving basis from
Lenders on the Closing Date and from time to time thereafter, sums not to exceed
the Maximum Revolving Commitment. Borrowers may borrow, repay and reborrow
hereunder on and after the date hereof until the Termination Date, subject to
the terms, provisions and limitations set forth herein.
Section 2.3 Draws, Advances and Settlement of Payments and Advances.
(a) On the Closing Date, and upon satisfaction of the
conditions set forth in Section 4.1, Lenders shall make available to Borrowers
the initial Revolving Credit Loan.
(b) All advances or disbursements of the Revolving Credit Loan
proceeds shall be effectuated at Borrowers' request either through wire transfer
or by receipt by Agent of a check drawn on a central disbursement account (the
"Agent Disbursement Account") of Borrowers maintained with Agent. Any request
for advance by wire transfer may be transmitted to Agent at its Head Office via
facsimile provided Borrowers immediately notify Agent by telephone of such
transmission. All such requests for wire transfer advances shall be made to and
received by Agent not later than 12:00 noon Cincinnati, Ohio time on the Draw
Date specified on such request and each such check or wire transfer request
shall be deemed to be a request for an advance on the Revolving Credit Loan on
the date when received and processed by Agent. Borrowers hereby designate the
President, Treasurer, Secretary or Chief Financial Officer of Romacorp (or any
other officer authorized by Borrowers and designated as such to Agent) acting
individually or jointly to make all requests for draws and advances.
(c) The Agent shall promptly notify each Lender of its
Participation Percentage of each requested Revolving Credit Loan and the date of
such borrowing. On the borrowing date
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specified in such notice, each Lender shall make its share of the borrowing
available at the Head Office of the Agent for deposit to such account as the
Agent shall designate, no later than 1:00 p.m. Cincinnati time in Federal or
other immediately available funds. Upon receipt of the funds to be made
available by Lenders to fund any Revolving Credit Loan hereunder, the Agent
shall disburse such funds by depositing them into the Agent Disbursement
Account.
(d) Within one hundred and twenty (120) days of the Closing
Date, each bank or other financial institution, other than Provident, with which
a Borrower maintains an account for the deposit of funds shall execute a Blocked
Account Agreement pursuant to which such bank or other financial institution
shall agree to direct all funds to an account at Agent's Head Office (the "Agent
Deposit Account"). All deposits to the Agent Deposit Account shall be the
property of Agent for the benefit of Lenders and shall not be commingled with
Borrowers' other funds or be deposited in any bank account of any Borrower, or
used in any manner except to pay the Obligations. Agent shall, at the close of
business on each Business Day, automatically debit the Agent Deposit Account and
apply the proceeds against the Loans and other Obligations pursuant to the
provisions of Section 2.8(b). So long as no Event of Default shall have occurred
and be continuing, if funds remain in the Agent Deposit Account following the
application provided for in the preceding sentence, the balance will be promptly
transferred to the Agent Disbursement Account. The crediting of items deposited
in the Agent Deposit Account to the reduction of the Loans shall be conditioned
upon final payment of the item and if any item is not so paid, the amount of any
credit given for it may be charged to the Loans or to any other deposit account
of a Borrower, whether or not the item is returned.
Section 2.4 The Revolving Credit Notes. The absolute and unconditional
obligation of Borrowers to repay to each Lender its respective Pro Rata Share of
the principal of each Revolving Credit Loan and the interest thereon shall be
evidenced by a separate Revolving Credit Note for each Lender in the amount of
its respective Credit Commitment for each Revolving Credit Loan dated as of the
Closing Date. All payments under the Revolving Credit Notes shall be made to
Agent at its Head Office, for the account of Lenders, and Agent shall allocate
all payments on each Revolving Credit Loan received from Borrower among all
Lenders in accordance with each Lender's Pro Rata Share of such Revolving Credit
Loan in accordance with Section 2.8(b).
Section 2.5 Letters of Credit.
(a) Obligation to Issue Letters of Credit. Subject to the
terms and conditions of this Agreement, prior to the maturity of the Loans
(whether by acceleration or otherwise) and so long as no Default has occurred
and is continuing, Issuing Bank agrees to issue, in accordance with Issuing
Bank's usual and customary business practices, one or more Letters of Credit at
the request of Borrowers, provided that Issuing Bank shall not issue any Letter
of Credit if: any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain Issuing Bank from
issuing such Letter of Credit or any rule, regulation or law applicable to
Issuing Bank or any request or directive from any governmental authority with
jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank
refrain from the issuance of letters of credit generally or such Letters of
Credit in particular or shall impose upon Issuing Bank with respect to such
Letters of Credit any restriction or reserve or capital requirement (for which
Issuing Bank is not otherwise compensated) not in effect on the date hereof, or
any unreimbursed loss, cost or
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expense which was not applicable, in effect or known to Issuing Bank as of the
date hereof in which Issuing Bank in good faith deems material to it; or any of
the conditions precedent for the issuance of such Letter of Credit or other
terms and provisions of this Loan or any subsequent loans hereof are not
satisfied.
(b) Expiration Date of Letters of Credit. The expiration date
of any Letter of Credit shall not be later than twelve (12) months after the
date of the issuance thereof.
(c) Letters of Credit Deemed to be Loans. All Letters of
Credit issued by Issuing Bank shall be issued in connection with this Agreement
and Borrowers' obligation to pay any amount drawn under any Letter of Credit
shall constitute an Obligation hereunder and shall be bound by and shall benefit
from all the terms, provisions and conditions hereunder, including without
limitation, Issuing Bank's rights to recover costs and expenses relating thereto
as provided in this Agreement and Issuing Bank's remedies upon the occurrence of
an Event of Default. Each Letter of Credit issued hereunder shall reduce the
amount of Loan proceeds available for disbursement under the Credit Commitment
in an amount equal to the face amount of each such Letter of Credit. No interest
shall accrue on the amount of undisbursed Loan proceeds representing the
aggregate amount of the Letters of Credit until such time as such Letters of
Credit are drawn upon.
(d) Procedure for Issuance of Letters of Credit. Borrowers
shall give Issuing Bank two (2) Business Days' prior written notice, or
telephonic or electronically transmitted notice confirmed promptly thereafter in
writing, of any requested issuance of a Letter of Credit under this Agreement.
Such notice shall specify the stated amount of the Letter of Credit requested,
the effective date (which day shall be a Business Day) of issuance of such
requested Letter of Credit, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day, the proposed beneficiaries of
such Letter of Credit, the conditions for draws under such Letter of Credit, and
any other information relevant thereto as Issuing Bank may request. Unless there
is a Default or Event of Default hereunder, or unless the amount of the Letter
of Credit exceeds the limitations set forth by Section 2.5(f) hereof, then,
subject to the terms and conditions of this Agreement, Issuing Bank shall issue,
on the requested date, a Letter of Credit for the account of Borrowers in
accordance with Issuing Bank's usual and customary business practices.
(e) Reimbursement Obligations. Borrower agrees that all
Reimbursement Obligations owing to Issuing Bank under or with respect to each
such Letter of Credit issued by Issuing Bank shall be deemed to be a request for
a draw or advance hereunder and shall be deemed to have been disbursed to
Borrowers as a Loan hereunder. Borrowers hereby promise to pay to Agent any and
all Reimbursement Obligations hereunder. Interest shall begin to accrue on the
Reimbursement Obligations on the day such Reimbursement Obligations are incurred
by Borrowers as a result of disbursement under the Letter of Credit.
(f) Amount of Letters of Credit. At no time shall the
aggregate amount of all of the issued and outstanding Letters of Credit exceed
Two Million Dollars ($2,000,000), nor shall the sum of all Letters of Credit
outstanding and all Loans outstanding exceed the Maximum Revolving Commitment.
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(g) Fees. A fee in the amount of two and one-quarter percent
(2.25%) per annum (computed on the basis of a 360-day year for the days elapsed)
of the daily average undrawn face amount of each of the Letters of Credit shall
be payable by Borrower ("Letter of Credit Fee"), plus all out-of-pocket
expenses, including, but not limited to, charges for the opening, closing,
amending, reissuing and extending of letters of credit. The Letter of Credit fee
shall be paid in arrears on the last day of each month and on the Termination
Date or if such day is not a Business Day on the next succeeding Business Day
commencing on the first such date following the issuance of any Letter of
Credit. The Agent agrees to disburse such Letter of Credit Fee, promptly upon
receipt, to the Issuing Bank, a fronting fee in an amount equal to 1/4 of 1% per
annum of the daily average undrawn face amount of each of the Letters of Credit,
plus all commissions, charges, costs and expenses in the amounts customarily
charged by the Issuing Bank from time to time in like circumstances with respect
to the issuance of each Letter of Credit, and the balance thereof to each Lender
its pro rata portion of such Letter of Credit fee.
(h) Letter of Credit Participations. By issuance of a Letter
of Credit and without any further action on the part of Issuing Bank or Lenders
in respect thereof, Issuing Bank hereby grants to each Lender, and each Lender
hereby agrees to acquire from Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Pro Rata Share of the face amount of such Letter
of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to Agent on behalf of Issuing Bank, such
Lender's Pro Rata Share of any Reimbursement Obligation. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 2.5(h) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of a default or an
event of default hereunder, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Credit beyond the
Termination Date;
Section 2.6 Interest Payable on the Loans.
(a) Interest Rate. Except as otherwise provided herein, the
Loans shall bear interest on the daily outstanding principal balance thereunder
at an annual rate equal to, at Borrowers' option, the Prime Rate or Libor Rate.
Each Libor Rate Loan shall bear interest from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such Libor Rate
Loan. Borrowers shall select Interest Periods with respect to Libor Rate Loans
so that it is not necessary to pay a Libor Rate Loan prior to the last day of
the applicable Interest Period in order to repay the Loans on the Termination
Date.
(b) Notice. Except as otherwise provided herein, if, on any
day any part of the Revolving Credit Loans is outstanding with respect to which
notice has not been timely received by the Agent in accordance with this
Agreement specifying that the Libor Rate shall be applicable thereto, then for
that day such Loan shall bear interest at the Prime Rate.
(c) Conversions. Borrower may elect from time to time to
convert all or part of the outstanding principal balance of any Revolving Credit
Loan from a Prime Rate Loan to a Libor
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Rate Loan by the Borrowers' giving Agent at least three (3) Business Days prior
irrevocable notice of such an election; provided, that no Loan may be converted
to a Libor Rate Loan while a Default or an Event of Default has occurred and is
continuing. Borrowers may also elect from time to time to continue any
outstanding Libor Rate Loan (whether for a similar or a different Interest
Period) upon expiration of the Interest Period then applicable thereto by the
Borrowers' giving the Agent at least three (3) Business Days' prior irrevocable
notice of such continuation of such Libor Rate Loan; provided, that no Revolving
Credit Loan may be continued as a Libor Rate Loan while a Default or an Event of
Default has occurred and is continuing.
(d) Election. Each notice of election to convert to a Libor
Rate Loan or to continue a Libor Rate Loan shall be in the form of Exhibit J
hereto and shall specify (i) the proposed conversion or continuation date; (ii)
the amount of the Revolving Credit Loan to be converted or continued; (iii)
whether a conversion or a continuation is being requested; and (iv) the
requested Interest Period. Each such notice shall also certify that no Default
or Event of Default has occurred and is then continuing.
(e) Effectiveness. On the date upon which each conversion to a
Libor Rate Loan or continuation of a Libor Rate Loan is being made pursuant to a
notice given in accordance with this Agreement, the Agent shall take such action
as is necessary to effect such conversion or continuation. Subject to the
limitations set forth in this Section 2.6 and in the definition of Interest
Period, all or any part of the Revolving Credit Loans may be converted into
Libor Rate Loans or continued as Libor Rate Loans as provided herein; provided,
that partial conversions or continuations of any Libor Rate Loan shall be in the
minimum amount of $1,000,000 and, if in excess thereof, in integral multiples of
$100,000; provided, further, that there shall be no more than three (3)
borrowings comprised of Libor Rate Loans outstanding at any time.
(f) Determination of Prime Rate. Agent shall determine the
Prime Rate in effect from time to time. Any change in the Prime Rate shall, for
all purposes of this Agreement and any of the other Loan Documents, become
effective on the effective date of such change in the Prime Rate as announced by
Agent in accordance with Agent's customary practices.
(g) Monthly Installments. Borrowers shall pay to Agent for the
account of Lenders in accordance with their respective Pro Rata Shares, monthly
in arrears on the first Business Day of each month beginning with the month
following the month in which the Closing Date falls, interest on the outstanding
principal amount of each Loan at the annual rate equal to the Interest Rate
applicable to such Loan.
(h) Interest on Overdue Payments; Default Interest Rate. If
the Revolving Credit Notes have been accelerated pursuant to Section 9.2(b) or
if a Default or an Event of Default with respect to any monetary payment
hereunder shall have occurred and during the period in which the Default or
Event of Default is continuing, the outstanding principal and all accrued
interest as well as any other Obligations due Lenders or Agent hereunder or
under any Loan Document shall bear interest from the date on which such amount
shall have first become due and payable to Lenders or Agent to the date on which
such amount shall be paid to Lenders or Agent (whether before or after
judgment), at the Default Interest Rate. Interest at the Default Interest Rate
will continue to accrue
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and will (to the extent permitted by applicable law) be compounded daily until
the Obligations in respect of the payment are discharged (whether before or
after judgment).
Section 2.7 Repayments and Prepayments of Principal.
(a) Repayments on the Revolving Credit Loans. Borrowers shall
have the right to repay the principal of the Revolving Credit Loans in full or
in part at any time and from time to time without any penalty or premium subject
to Section 2.7(h).
(b) Revolving Loan Overadvance. If at any time the aggregate
amount of the Loans outstanding to Borrowers exceeds the Maximum Revolving
Commitment, Borrowers shall be obligated to immediately prepay the amount that
exceeds the Maximum Revolving Commitment.
(c) Prepayments from Extraordinary Dispositions. Immediately
upon receipt by Borrowers of Net Proceeds, Borrowers shall prepay the Loans in
an amount equal to the total Net Proceeds then subject to this Section 2.7(c) in
accordance with Section 2.8(b). Notwithstanding the foregoing, in the event that
a Borrower (1) has an accrued tax liability with respect to an Extraordinary
Disposition or (2) reasonably expects the proceeds of such Extraordinary
Disposition to be (i) reinvested within six (6) months of the receipt thereof in
productive assets of a kind then used or useable in the business of such
Borrower or a Subsidiary of such Borrower, or (ii) in the case of insurance and
condemnation proceeds, utilized within six (6) months of the receipt thereof (or
such longer period as the Agent may agree to, such agreement not to be
unreasonably withheld if such Borrower has timely begun and is diligently
pursuing the rebuilding or repair in question but reasonably expects that such
rebuilding or repair will not be completed within such six (6) month period) to
repair the loss or damage to or otherwise rebuild the assets in respect of which
the proceeds were paid, then, subject to the terms of the lease, such Borrower
shall deliver such proceeds or portion thereof to Agent to be held by Agent in a
cash collateral account bearing interest payable to such Borrower at a rate per
annum (meaning three hundred sixty (360) days) equal to (i) the same rate of
interest payable hereunder with respect to the Revolving Loan for that portion
of such proceeds not in excess of the balance of the Revolving Credit Loan and
(ii) the Federal Funds Rate for any amount in excess of the balance of the
Revolving Credit Loan. Upon such Borrower's request, Agent and Lenders shall
release such proceeds to such Borrower for payment of the accrued tax liability
or for reinvestment, repair or rebuilding. In the event such Borrower (1) is not
required to pay all or any portion of the accrued tax liability or (2) fails to
reinvest such proceeds or utilize them for repair or rebuilding within six (6)
months of the receipt thereof (or such longer period that may be agreed to
pursuant to this Section 2.7(c), each Borrower authorizes and directs Agent and
Lenders to apply such amount as a prepayment of the Loans to be applied in
accordance with Section 2.8(b).
(d) Prepayment from Key Man Insurance. In the event that a
Borrower or Agent receives proceeds from payment of the key man life insurance
maintained pursuant to Section 6.3, Borrowers shall prepay or Agent shall apply
such amount as a prepayment of the Loans in an amount equal to the lesser of
such insurance proceeds or the amount of the Obligations then outstanding.
Prepayments made under this Section 2.7(d) shall be applied to the Loans in
accordance with Section 2.8(b).
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(e) Maturity. Subject to the terms and conditions of this
Agreement, Borrowers will be entitled to reborrow all or any part of the
principal of the Revolving Credit Notes repaid or prepaid prior to the
Termination Date. The Credit Commitments shall terminate and all of the
indebtedness evidenced by the Revolving Credit Notes shall, if not sooner paid,
be in any event absolutely and unconditionally due and payable in full by
Borrowers on the fifth anniversary of the Closing Date, the date of the final
maturity of such Revolving Credit Notes.
(f) Application of Prepayments. Any prepayment of the
Obligations under the Revolving Credit Notes or any of the other Loan Documents
shall be applied by Agent as set forth in Section 2.8 hereof. Any amounts
received in connection with a payment, repayment or prepayment shall be applied
to the extent possible, first, to Prime Rate Loans and, then, to Libor Rate
Loans. To the extent that such payment, repayment or prepayment shall be applied
to a Libor Rate Loan, Agent shall retain such amount until the expiration of the
Interest Period applicable to such Libor Rate Loan, and apply such payment at
such time so as to minimize the Libor Break Funding Costs applicable to such
payment, repayment or prepayment, unless otherwise instructed by Borrowers, to
pay, repay or prepay such Libor Rate Loan and nonetheless incur the applicable
Libor Break Funding Cost.
(g) Libor Breakage Costs. Upon any repayment or prepayment
pursuant to this Section 2.5 of any Loan which is also a Libor Rate Loan not
made on the last day of any Interest Period for such Libor Rate Loan, Borrowers
shall pay to Agent for the ratable benefit of the Lenders, such Libor Breakage
Costs pursuant to Section 2.12 hereof.
(h) Prepayment Fees. If Borrowers voluntarily prepay the
Obligations in full at any time during the first Loan Year in connection with
any early termination of this Agreement, Borrowers shall pay to Agent, for the
ratable benefit of Lenders, as liquidated damages and compensation for the costs
of being prepared to make funds available to Borrowers under this Agreement, and
not as a penalty, an amount determined by multiplying (x) the sum of the
prepayment plus if the Revolving Credit Loans are repaid in full and the Credit
Commitments terminated, the amount of the Credit Commitment with respect to then
unfunded Revolving Credit Loans times (y) one percent (1%) provided, however,
that if such prepayment occurs as a result of (i) a sale of Borrowers to an
unrelated third party or (ii) an Initial Public Offering, no such prepayment fee
shall be required.
Section 2.8 Payments and Computations.
(a) Time and Place of Payments. Notwithstanding anything in
this Agreement or any of the other Loan Documents to the contrary, each payment
payable by Borrowers to the Agent or any Lender under this Agreement or any of
the other Loan Documents other than payments pursuant to Section 2.3(d) made as
a result of the application of funds in the Agent Deposit Account, shall be made
directly to the Agent, at Agent's Head Office, not later than 12:00 noon Eastern
Standard or Eastern Daylight Time, as applicable in Cincinnati, Ohio, on the due
date of each such payment in immediately available and freely transferrable
funds. The Agent will promptly cause to be distributed to each Lender in
immediately available and freely transferrable funds such Lender's Pro Rata
Share of each such payment received by the Agent. In order to cause timely
payment to be made to Agent of all Obligations as and when due, each Borrower
hereby authorizes
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and directs Agent, at Agent's option to debit the Agent's Disbursement Account
(by increasing the principal balance of the Revolving Credit Loan) when such
Obligations become due.
(b) Application of Funds. Notwithstanding anything herein to
the contrary, the funds received by Agent with respect to the Obligations shall
be applied as follows:
(i) No Default. If the Revolving Credit Notes have
not been accelerated pursuant to Section 9.2(b) and if no Default or
Event of Default hereunder or under the Revolving Credit Notes or any
of the other Loan Documents shall have occurred and be continuing at
the time Agent receives such funds, in the following manner: (a) first,
to the payment of all fees, charges, and other sums (with exception of
principal and interest) due and payable to Agent or Lenders under the
Revolving Credit Notes, this Agreement or the other Loan Documents at
such time; (b) second, to the payment of all of the interest which
shall be due and payable on the principal of the Revolving Credit Notes
at the time of such payment in accordance with each Lender's Pro Rata
Share; (c) third, to the payment of such amount of principal of the
Revolving Credit Notes in accordance with each Lender's Pro Rata Share;
and (f) fourth, to the Borrowers.
(ii) Default. If the Revolving Credit Notes have been
accelerated pursuant to Section 9.2(b), or if a Default or Event of
Default hereunder shall have occurred and be continuing hereunder or
under the Revolving Credit Notes or any of the other Loan Documents at
the time Agent receives such funds, in the following manner: (a) first,
to the payment or reimbursement of Lenders and Agent for all costs,
expenses, disbursements and losses which shall have been incurred or
sustained by Lenders or Agent in or incidental to the collection of the
Obligations owed by Borrowers hereunder or the exercise, protection, or
enforcement by Lenders and Agent of all or any of the rights, remedies,
powers and privileges of Lenders and Agent under this Agreement, the
Revolving Credit Notes, or any of the other Loan Documents and in and
towards the provision of adequate indemnity to the Agent and any of the
Lenders against all taxes or Liens which by law shall have, or may have
priority over the rights of the Agent or Lenders in and to such funds
and (b) second, to the payment of all of the Obligations in accordance
with Section 2.8(b)(i) above.
(c) Payments on Business Days. If any sum would (but for the
provisions of this Section 2.8(c)) become due and payable to Agent or any Lender
by Borrowers under any of the Loan Documents on any day which is not a Business
Day, then such sum shall become due and payable on the Business Day next
succeeding the day on which such sum would otherwise have become due and payable
hereunder or thereunder, and interest payable to Agent or any Lender under this
Agreement or any of the other Loan Documents shall continue to accrue and shall
be adjusted by the Agent accordingly.
(d) Computation of Interest. All computations of interest
payable under this Agreement, the Revolving Credit Notes, or any of the other
Loan Documents shall be computed by Agent on the basis of the actual principal
amount outstanding on each day during the payment period and shall be calculated
on the basis of the actual number of days elapsed during such period for which
interest is being charged, predicated on a year consisting of three hundred and
sixty (360) days. The daily interest charge shall be one three-hundred-sixtieth
(1/360th) of the annual interest
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amount. Each determination of any interest rate by Agent pursuant to this
Agreement, any Revolving Credit Note, or any of the other Loan Documents shall
be conclusive and binding on Borrowers in the absence of manifest error. Absent
manifest error, a certificate or statement signed by an authorized officer of
Agent shall be conclusive evidence of the amount of the Obligations due and
unpaid as of the date of such certificate or statement.
Section 2.9 Payments to be Free of Deductions. Each payment payable by
a Borrower to Agent or any Lender under this Agreement, any Revolving Credit
Note, or any of the other Loan Documents shall be made in accordance with
Section 2.8 hereof, without set-off or counterclaim and free and clear of and
without any deduction of any kind for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any political
subdivision or any taxing or other authority therein, unless a Borrower is
compelled by law to make any such deduction or withholding. In the event that
any such obligation to deduct or withhold is imposed upon a Borrower with
respect to any such payment payable by a Borrower to Agent or any Lender, (a)
each Borrower shall be permitted to make the deduction or withholding required
by law in respect of the said payment, and (b) there shall become and be
absolutely due and payable by such Borrower to Agent or such Lender on the date
on which the said payment shall become due and payable and each Borrower hereby
promises to pay to Agent or such Lender on such date, such additional amount as
shall be necessary to enable Agent or such Lender to receive the same net amount
which Agent or such Lender would have received on such due date had no such
obligation been imposed by law. Anything in this Section 2.9 to the contrary
notwithstanding, the foregoing provisions of this Section 2.9 shall not apply in
the case of any deductions or withholdings made in respect of taxes charged upon
or by reference to the overall net income, profits or gains of Agent or any
Lender. Borrowers shall have no obligation to make any payment pursuant to this
Section 2.9 with respect to any Lender who is not a party hereto on the Closing
Date unless (i) no such payments would be payable to any such Lender on the date
it becomes a party hereto and no such payments could be reasonably expected to
be payable to such Lender and (ii) if such Lender is organized under the laws of
a foreign jurisdiction, such jurisdiction is exempt from United States
withholding tax and such Lender has provided any Borrower with an Internal
Revenue Form 4224 or Form 1001 or other certificate of document required under
United States law to establish entitlement to such exemption.
Section 2.10 Use of Proceeds.
(a) Permitted Uses of Loan Proceeds. Each Borrower represents,
warrants and covenants to Agent and each Lender that all proceeds of the Loans
shall be used by Borrower solely for the purpose of financing working capital
and for general corporate purposes.
(b) Prohibited Uses. Each Borrower represents, warrants and
covenants to Agent and each Lender that no part of the proceeds of the Loans
will be used (directly or indirectly) so as to result in a violation under
Regulations G, T, U or X of the Board of Governors of the Federal Reserve System
or for any other purpose violative of any rule or regulation of such Board.
Section 2.11 Libor Breakage Cost. Borrowers shall pay to Agent, for the
ratable benefit of each Lender, the Libor Break Funding Costs that Agent
determines are attributable to the following events (regardless of whether such
events occur as a result of the occurrence of an Event
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of Default or the exercise of any right or remedy of the Agent or the Lenders
under this Agreement or any other agreement, or at law):
(a) any payment (including, without limitation, the
acceleration of the Loans pursuant to this Agreement or any Loan Document),
repayment, mandatory or optional prepayment, or conversion of a Libor Rate Loan
for any reason on a date other than the last day of the Interest Period for such
Libor Rate Loan; or
(b) any failure by Borrowers for any reason to borrow a Libor
Rate Loan on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to this Agreement.
Section 2.12 Additional Costs, etc. If any Lender shall reasonably
determine that any future applicable law, rule or regulation, or any change in
any present law or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital, as a
consequence of its obligations hereunder, to a level below that which such
Lender could have achieved but for such adoption, change or compliance by any
amount deemed by such Lender to be material and is not otherwise reflected in
the interest and other charges payable by Borrowers hereunder, then Borrowers
shall pay to such Lender upon demand such amount or amounts, in addition to the
amounts payable under the other provisions of this Agreement or the Revolving
Credit Notes, as will compensate such Lender for such reduction. Determinations
by any Lender of the additional amount or amounts required to compensate such
Lender in respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts, Lender may use any
reasonable averaging and attribution methods.
Section 2.13 Agent and Lender Statements. A statement signed by an
officer of Agent or any Lender (as the case may be) setting forth any additional
amount required to be paid by Borrowers to Agent or such Lender under Sections
2.9 and 2.12 hereof, and the computations made by Agent or such Lender to
determine such additional amount or amounts, shall be submitted by Agent or such
Lender to Borrowers in connection with each demand made at any time by Agent
(and copies thereof delivered to each other Lender) or such Lender under either
of such Sections. A claim by Agent or any Lender for all or any part of any
additional amounts required to be paid by Borrowers under Sections 2.9 and 2.12
hereof may be made before or after any payment to which such claim relates. Each
such statement shall, in the absence of manifest error, constitute conclusive
evidence of the additional amount required to be paid to Agent or such Lender,
provided it sets out in reasonable detail the reasons for such notice and the
averaging and attribution methods used by Agent or such Lender to determine the
amounts set forth in such notice.
Section 2.14 Allocation of Liability.
(a) Notwithstanding anything herein to the contrary, each
Borrower's liability (other than Romacorp's) under the Revolving Credit Notes
shall be limited to the Maximum Credit Liability for each Borrower as determined
at the earlier of the date of commencement of a case
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under Title 11 of the United States Code (or any successor provision) in which
such Borrower is a debtor or the date enforcement is sought hereunder or under
the Revolving Credit Notes; provided, however, that each Borrower shall be
jointly and severally liable for all advances, charges, costs and expenses,
including reasonable attorneys' fees incurred or paid by Agent or any Lender in
exercising any right, power or remedy conferred by this Agreement or any
enforcement thereof, including, without limitation, those additional costs,
claims and damages set forth in Section 11.6.
(b) Each Borrower agrees that in the event of (i) the
dissolution or insolvency of any Borrower, (ii) the inability of any Borrower to
pay its debts as they become due, (iii) an assignment by any Borrower for the
benefit of its creditors, or (iv) the institution of any bankruptcy or other
proceeding by or against any Borrower alleging that such Borrower is insolvent
or unable to pay its debts as they become due, and whether or not such event
shall occur at a time when the Obligations are not then due and payable, the
other Borrowers shall pay the Obligations promptly upon demand as if the
Obligations were then due and payable. Each Borrower agrees that upon the filing
by or against any other Borrower of any proceeding under any present or future
provision of the United States Bankruptcy Code, or any other similar federal or
state statute, other Borrowers shall have no right to contribution,
indemnification, or any recourse whatsoever against the bankrupt Borrower for
any liability incurred by the other Borrowers under the terms of the Loan
Documents. Each Borrower agrees that this provision shall continue to be
effective or be reinstated, as the case may be, if at any time any payment, or
any part thereof, of principal, interest or any other amount with respect to the
Obligations is rescinded or must otherwise be restored by Agent or the Lenders
upon the bankruptcy or reorganization of any Borrower, any other Person or
otherwise.
Each Borrower further agrees that, to the extent that any Borrower
makes a payment to Agent, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or otherwise required to be repaid to another Borrower, its estate, trustee,
receiver or any other party, including without limitation, under any bankruptcy
law, state or federal law, common law or equitable cause, then to the extent of
such payment or repayment, the obligation or part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred.
ARTICLE 3
SECURITY AGREEMENT
Section 3.1 Security Interest. To secure the prompt repayment of the
Revolving Credit Notes and the Obligations, Borrowers hereby grant, and hereby
pledge and collaterally assign, to Agent, on behalf of the Lenders, a lien and
security interest in and to the Collateral. To secure further such liabilities
and Obligations, each Borrower has granted to Agent, on behalf of the Lenders, a
first lien upon all real property owned by such Borrower; has executed and
delivered to Agent, on behalf of the Lenders, Mortgages or deeds of trust,
amendments or modifications to Mortgages and valid assignments of all other
property rights (including, without limitation, rights to receive rents and
rights with respect to judgments and claims) which now exist or which may exist
or arise hereafter from time to time; has executed and delivered to Agent, on
behalf of the Lenders,
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certificates of title and the like as necessary from time to time to secure the
Obligations hereunder; and shall deliver to Agent, on behalf of the Lenders, to
the extent required herein or upon Agent's request in accordance with the terms
of this Agreement, all instruments, documents and Chattel Paper in which such
Borrower from time to time has an interest and such other documents as Agent may
request to perfect a security interest in the Collateral. Notwithstanding the
foregoing, if any contract or General Intangible prohibits, or requires the
consent for (in accordance with the terms thereof after giving effect to any
applicable laws), the granting of a security interest therein or in the
Collateral, or if the granting of a security interest in any contract or General
Intangible shall violate applicable law, then the security interest granted
hereby shall be limited to the extent (and only to the extent) necessary so that
such contract or General Intangible shall not be so violated or no such
violation of law exist, as the case may be.
Section 3.2 Financing Statements; Additional Documents. Each Borrower
shall take all necessary action or as requested by Agent or any Lender to
continue as perfected the first lien and security interest in the Collateral of
Lenders and Agent, except for such Collateral in which a first lien can be
perfected only by possession and such possession is not required by Agent at
this time and Permitted Liens. Such filings shall be in form and substance
required by Agent, and each Borrower shall pay all costs of recording and filing
the financing statements (and any continuation or termination statements with
respect thereto), the Mortgages and any other documents, titles, statements,
assignments or the like reasonably required to create, maintain, preserve or
perfect the liens or security interests granted under the Loan Documents,
together with costs and expenses of any lien or UCC searches required by Agent
in connection with the making of the Loans. Each Borrower irrevocably hereby
makes, constitutes and appoints Agent (and all Persons designated by Agent for
that purpose) as such Borrower's true and lawful attorney and agent-in-fact to
execute such financing statements, documents and other agreements and
instruments and do such other acts and things as may be necessary to preserve
and perfect the security interest in the Collateral granted to Agent for the
benefit of the Lenders. At Agent's request, each Borrower shall execute and
deliver to Agent, on behalf of the Lenders, at any time and from time to time
hereafter, all supplemental documentation that Agent may reasonably request to
perfect, maintain, preserve or continue the security interest and liens granted
Lenders and Agent hereby and under any of the other Loan Documents, in form and
substance acceptable to Agent, and pay the costs of preparing and recording or
filing of the same. Each Borrower agrees that a carbon, photographic, or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. Except as otherwise provided in this Agreement, each
Borrower immediately on acquiring Inventory or Accounts or Proceeds thereof for
which separate perfection is necessary or reasonably considered desirable by
Agent, shall deliver to Agent, on behalf of the Lenders, any and all evidence of
ownership of any such property and shall take all such action as may be
reasonably necessary to perfect Agent's security interest in such property. Each
Lender (by any of its officers, employees or agents, but only upon authorization
of an officer of such Lender) shall have the right, at any time or times during
Borrower's usual business hours, to inspect the Collateral, all records related
thereto (and to make extracts from such records) and the premises upon which any
of the Collateral is located, to discuss Borrower's affairs and finances with
any accountant, account debtor or creditor of Borrower and to verify the amount,
quality, quantity, value and condition of, or any other matter relating to, the
Collateral. Each Borrower shall perform all reasonable acts and execute or cause
to be executed all documents, including, without limitation, the Assignment of
Patents and the Assignment of Trademarks for filing with the United States
Patent and Trademark Office, state
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offices and corresponding foreign registries as Agent reasonably deems necessary
or desirable, to establish, perfect, record and maintain the security interest
in the Intellectual Property and the goodwill symbolized thereby (whether now
existing or hereafter acquired).
Section 3.3 Release of Collateral. Upon Borrowers' full performance of
the Obligations Agent and Lenders shall release their interest in all
Collateral. Upon any sale of Collateral permitted pursuant to Section 8.4, Agent
shall release its interest in the portion of the Collateral being sold, without
prejudice to the continuation of its lien on any other Collateral.
ARTICLE 4
CONDITIONS PRECEDENT TO DISBURSEMENTS
Section 4.1 Conditions Precedent to Initial Closing. On or prior to the
Closing Date, each of the following conditions precedent shall have been
satisfied:
(a) Certified Copies of Charter Documents and Bylaws. (1)
Agent and each Lender shall have received from each Borrower that is a
corporation (i) a copy, certified by the Secretary or an Assistant Secretary of
such Borrower to be true and complete on and as of the Closing Date, of the
charter or other organization documents and by-laws of such Borrower as in
effect on the Closing Date (together with all, if any, amendments thereto); and
(ii) the charter or other organization documents of such Borrower certified by
the applicable Secretary of State.
(2) Agent and each Lender shall have received from
each Borrower that is a partnership (i) a copy, certified by a general partner
of such Person to be true and complete on and as of the Closing Date, of its
partnership agreement as in effect (together with all, if any, amendments
thereto) and (ii) a copy of its Certificate of Partnership, as amended to date,
certified as of a recent date by the applicable Secretary of State.
(b) Proof of Corporate Authority. (1) Agent and each Lender
shall have received from each Borrower that is a partnership copies, certified
by a Responsible Officer of such Person to be true and complete on and as of the
Closing Date, of records of all action taken by such Person, including without
limitation, all consents required by any limited partner, to authorize (i) the
execution and delivery of this Agreement and the other Loan Documents to which
it is or is to become a party as contemplated or required by this Agreement;
(ii) its performance of all of its obligations under each of such documents; and
(iii) the making by such Borrower of the borrowings contemplated hereby. Agent
shall have received from the applicable Secretary of State a Certificate of Good
Standing of recent date certifying the existence and good standing of each
Borrower under the laws of the state of such Borrower and certificates
evidencing such Borrower's good standing in each state where such Borrower is
required to qualify to conduct business.
(2) Agent and Lender shall have received from each
Borrower that is a corporation, all necessary consents to authority, copies,
certified by a Responsible Officer thereof to be true and complete on and as of
the Closing Date, of records and action taken by such Person, to authorize (i)
the execution and delivery of this Agreement and other the Loan Documents to
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which it is or is to become a party as contemplated or required by this
Agreement; (ii) its performance of all of its obligations under each of such
documents; and (iii) the making by such Borrower of the borrowings contemplated
hereby. Agent shall have received from the applicable Secretary of State a
Certificate of Good Standing of recent date certifying the existence and good
standing of each Borrower under the laws of the state where such Borrower is
incorporated and certificates evidencing each Borrower's good standing in each
state where such Borrower is required to qualify to conduct business.
(c) Authority to execute Pledge Agreements. Each Person
executing a Pledge Agreement which is not an individual shall deliver to Agent
such evidence as Agent shall reasonably deem necessary to evidence the authority
of such Person to execute and deliver each such Pledge Agreement and to perform
its respective obligations thereunder.
(d) Incumbency Certificate. Agent and each Lender shall have
received from each Borrower an incumbency certificate, dated as of the Closing
Date, signed by a Responsible Officer of such Borrower and giving the name and
bearing a specimen signature of each individual who shall be authorized (i) to
sign, in the name and on behalf of such Borrower, each of the Loan Documents to
which such Borrower is or is to become a party on the Closing Date; and (ii) to
give notices and to take other action on behalf of such Borrower under the Loan
Documents.
(e) Officers' Certificates. Agent and each Lender shall have
received from each Borrower a certificate dated as of the Closing Date, signed
by a Responsible Officer and certifying that each of the representations and
warranties made by and on behalf of such Borrower to Agent and each Lender in
this Agreement and in the other Loan Documents was true and correct when made,
and is true and correct on and as of the Closing Date.
(f) Loan Documents, etc. (i) Each of the Loan Documents shall
have been duly and properly authorized, executed and delivered by each Borrower
and shall be in full force and effect on and as of the Closing Date; (ii)
executed originals of each of the Revolving Credit Notes shall have been
delivered to each Lender in accordance with their respective Credit Commitments;
and (iii) executed originals or (as the case may be) executed counterparts of
each of the other Loan Documents shall have been delivered to Agent and/or each
Lender.
(g) Actions to Perfect Liens. Agent shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including without limitation, the filing of
duly executed financing statements on Form UCC-1, necessary or, in the opinion
of Agent, desirable to perfect the Liens created by the Security Documents shall
have been completed.
(h) Insurance. Agent shall have received copies of
certificates of insurance executed by each insurer or its authorized agent
evidencing the insurance required to be maintained by Borrower pursuant to
Section 6.2(b).
(i) Flood Hazard Determination. Agent shall have received, at
Borrowers' expense, a Standard Flood Hazard Determination Form issued or
certified by a Person satisfactory
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to Agent for each structure or improvement that is located on Real Estate owned
by a Borrower. Further, in the event such Standard Flood Hazard Determination
Form evidences that the subject structure or improvement is located in a special
flood hazard, as defined by FEMA, Borrowers shall deliver to Agent and Lenders
evidence of appropriate flood insurance in amounts and under such conditions as
identified in Section 6.2(b) hereof.
(j) Mortgage and Title Insurance. The following documents each
of which shall be executed (and, where appropriate, acknowledged) by Persons
reasonably satisfactory to the Agent:
(i) Mortgages on all Real Estate excluding those
identified on Schedule 3.1, in each case duly executed and delivered by
Borrowers (and where appropriate by the trustee thereunder) in
recordable form (in such number of copies as the Agent shall have
reasonably requested), together with such Uniform Commercial Code
financing statements as may be needed in order to perfect the security
interests granted by each of the Mortgages in any fixtures and other
property therein described which may be subject to the Uniform
Commercial Code, in each case appropriately completed and duly executed
and in proper form for filing in all offices in which required;
(ii) copies of all title insurance policies in the
name of a Borrower on any real property owned by a Borrower.
In addition, Borrowers shall have paid an amount equal to all mortgage and
mortgage recording taxes, intangibles taxes, stamp taxes and other taxes payable
in connection with the execution and delivery of the Mortgages and the
obligations secured thereby and the recording of the Mortgages in the
appropriate land offices; provided, however, that Borrowers shall not pay or be
responsible for mortgage recording taxes payable to or in jurisdictions where
such payments by Borrowers are prohibited by law.
(k) Legality of Transactions. No change in applicable law
shall have occurred as a consequence of which it shall have become and continue
to be unlawful (i) for Agent or any Lender to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date; or (ii) for any Borrower to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on the
Closing Date.
(l) Performance, Etc. Each Borrower shall have duly and
properly performed, complied with and observed each of its covenants, agreements
and obligations contained in each of the Loan Documents to which such Borrower
is a party or by which such Borrower is bound on the Closing Date. No event
shall have occurred on or prior to the Closing Date, and no condition shall
exist on the Closing Date, which constitutes a Default or an Event of Default.
(m) Proceedings and Documents. All partnership, corporate,
governmental and other proceedings in connection with the transactions
contemplated by this Agreement, each of the other Loan Documents and all
instruments and documents incidental thereto shall be in form and substance
satisfactory to Agent and Lenders, and Agent and each Lender shall have received
all such
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counterpart originals or certified or other copies of all such instruments and
documents as Agent and each Lender shall have requested.
(n) Compliance with Laws. The borrowings made under this
Agreement are and shall be in compliance with the requirements of all applicable
laws, regulations, rules and orders, including without limitation, the
Environmental Laws and the requirements imposed by the Board of Governors of the
Federal Reserve System under Regulations U, G and X, and by the SEC.
(o) Legal Opinion. Agent and Lenders shall have received a
written legal opinion, addressed to Agent and each Lender and dated as of the
Closing Date, from legal counsel for Borrowers, which shall be substantially in
the form of Exhibit H hereto and which legal opinion shall otherwise be
acceptable to Agent and each Lender.
(p) Fees and Expenses. Borrowers shall have reimbursed Agent
for all reasonable out-of-pocket fees, expenses and disbursements which shall
have been incurred by Agent through the Closing Date in connection with the
preparation, negotiation, review, execution and delivery of the Loan Documents
and the handling of any other matters incidental thereto, including, without
limitation, legal fees, recording fees, filing fees and other related expenses.
Each Lender agrees that it shall be responsible for any fees incurred by it in
connection with the negotiation, review, execution and delivery of the Loan
Documents.
(q) Payment of Closing Fee. Borrowers shall have paid to Agent
a fee equal to three-quarters of one percent (0.75%) of the Maximum Revolving
Commitment.
(r) Equity Transaction, Senior Debt Offering and
Recapitalization. Holdings and Romacorp shall have closed, or be prepared to
simultaneously close with the closing of the Loans, the Equity Transaction, the
Senior Debt Offering and the Recapitalization on terms and conditions
satisfactory to Agent and each Lender.
(s) Payment of Indebtedness. Agent shall have received from
Borrowers, reasonably satisfactory to Agent, evidence of the repayment of all of
Borrowers' Indebtedness.
(t) Employment Agreement. Agent shall have received an
executed copy of the Employment Agreement in form and substance satisfactory to
Agent.
(u) Lien Searches. Agent shall have received the results of a
recent search by a Person satisfactory to Agent, of the UCC, judgment and tax
lien filings which may have been filed with respect to personal property of
Borrowers or any Subsidiaries in the jurisdictions listed on Schedule 5.22, and
the results of such search shall be satisfactory to Agent.
(v) Changes; None Adverse. From the date of the Current
Financial Statements referred to in Section 5.5 of this Agreement to the Closing
Date, no changes shall have occurred in the assets, liabilities, financial
condition, business or operations of Borrowers which, individually or in the
aggregate, are materially adverse to any Borrower.
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(w) Financial Statements. Each Lender shall have received the
financial statements referred to in Section 5.5, certified by an officer of the
applicable Borrower and each Lender shall have been satisfied that such
financial statements accurately reflect the financial status and condition of
the applicable Borrower.
(x) Acquisition Costs. The total price of Romacorp, including
all associated fees and expenses, shall not exceed One Hundred Fifteen Million
Dollars ($115,000,000).
Section 4.2 Conditions Precedent to Subsequent Loans. The obligation of
the Lenders to make any Loan shall be subject to the satisfaction, prior thereto
or concurrently therewith, of each of the following conditions precedent:
(a) Legality of Transactions. It shall not be unlawful (a) for
any Lender or the Agent to perform any of its agreements or obligations under
any of the Loan Documents to which such Person is a party on the Draw Date of
such Loan or (b) for Borrowers to perform any of its material agreements or
obligations under any of the Loan Documents.
(b) Representations and Warranties. Each of the
representations and warranties made by or on behalf of the Borrowers to the
Lenders or the Agent in this Agreement or any other Loan Document (a) shall be
true and correct in all material respects when made and (b) shall, for all
purposes of this Agreement, be deemed to be repeated on and as of the date of
Borrower's request for such Loan, as the case may be, and shall be true and
correct in all material respects as of each of such dates, except, in each case,
as affected by the consummation of the transactions contemplated by the Loan
Documents.
(c) No Default. No event shall have occurred on or prior to
such date and be continuing on such date, and no condition shall exist on such
date which constitutes a Default or Event of Default.
(d) Maximum Credit. The making of such Loan shall not result
in the sum of all outstanding Loans exceeding the Maximum Revolving Commitment.
(e) Compliance Certificate. Agent and each Lender shall have
received from each Borrower a Compliance Certificate, dated as of the date of
such Loan and signed by a Responsible Officer.
ARTICLE 5
GENERAL REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Agent and each Lender as
follows:
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Section 5.1 Existence, Etc.
(a) Each Borrower (i) is duly organized, validly existing and
in good standing under the laws of the state of its respective organization; and
(ii) has full corporate power and authority and full legal right to own or to
hold under lease its respective Property and to carry on its respective
businesses. Each Borrower is qualified and licensed in each jurisdiction wherein
the character of the Property owned or held under lease by it, or the nature of
its business make such qualification necessary or advisable. Each Borrower that
is a corporation is currently qualified in good standing as a foreign
corporation in each jurisdiction set forth on Schedule 5.1(a) and each Borrower
that is a partnership is currently qualified in good standing as a foreign
partnership in each jurisdiction set forth on Schedule 5.1(a).
(b) The authorized Capital Stock of each Borrower and each
Subsidiary of a Borrower is as set forth on Schedule 5.1(b). All issued and
outstanding shares of Capital Stock of each Borrower and each Subsidiary of a
Borrower are duly authorized and validly issued, are fully paid and
nonassessable and such shares were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. Except for the
liens of the Pledge Agreements, there are no outstanding options, rights or
warrants issued by any Borrower for the acquisition of shares of the Capital
Stock of any Borrower, nor any outstanding securities or obligations convertible
into such shares, nor any agreements by any Borrower to issue or sell such
shares. There are no options, sale agreements, pledges (other than the Pledge
Agreements in favor of the Agent), proxies, voting trusts, powers of attorney or
any other agreements or instruments binding upon any of Borrowers' shareholders
with respect to beneficial or record ownership of or voting rights with respect
to shares of the Capital Stock of any Borrower.
(c) Borrowers have no Subsidiaries except as set forth on
Schedule 5.1(b). All the Capital Stock of each Subsidiary is free and clear of
all Liens other than those in favor of Agent. Each Subsidiary is duly organized,
validly existing and in good standing under the laws of the state of its
organization, and has full corporate power and authority and full legal right to
own or to hold under lease its Property and to carry on its business. Each
Subsidiary is qualified and licensed in each jurisdiction wherein the character
of the Property owned or held under lease by it, or the nature of its business
makes such qualification necessary or advisable. Each Subsidiary which is a
corporation is currently qualified in good standing as a foreign corporation in
each jurisdiction set forth on Schedule 5.1(b) and each Subsidiary which is a
partnership is currently qualified in good standing as a foreign partnership in
each jurisdiction set forth on Schedule 5.1(b).
(d) Except for Capital Stock of Subsidiaries and as otherwise
set forth on Schedule 5.1(d) hereto, , (i) no Borrower owns or holds of record
(whether directly or indirectly) any shares of any class in the capital of any
corporation, and (ii) no Borrower owns or holds (whether directly or indirectly)
any legal and/or beneficial equity interest in any partnership, business trust
or joint venture or in any other unincorporated trade or business enterprise.
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Section 5.2 Authority, Etc.
(a) Each Borrower has adequate power and authority and has
full legal right to enter into this Agreement and each of the other Loan
Documents, and to perform, observe and comply with all of its agreements and
obligations under each of such documents, including, without limitation the
borrowings contemplated hereby.
(b) The execution and delivery by Borrowers of each of the
Loan Documents, the performance by Borrowers of all of their agreements and
obligations under such documents, and the making by Borrowers of the borrowings
contemplated by this Agreement, have been duly authorized by all necessary
action on the part of Borrowers and do not and will not (i) violate any
provision of its charter documents or by-laws (each as in effect from time to
time); (ii) conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in the creation of any
Lien upon any of the Property of Borrower under any agreement, trust deed,
indenture, mortgage or other material instrument to which Borrower is a party or
by which Borrower or any other Property of Borrower is bound or affected; (iii)
violate or contravene any provision of any law, rule or regulation (including,
without limitation, Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System) or any order, ruling or interpretation thereunder or any
decree, order or judgment of any court or governmental or regulatory authority,
bureau, agency or official (all as from time to time in effect and applicable to
any Borrower); or (iv) require any waivers, consents or approvals by any of the
creditors or trustees for creditors of any Borrower or any other Person.
(c) Other than filings required to perfect the security
interests granted hereunder, no approval, consent, order, authorization or
license by, or giving notice to, or taking any other action with respect to, any
governmental or regulatory authority or agency is required, under any provision
of any applicable law:
(i) for the execution and delivery by Borrowers of
this Agreement, each Revolving Credit Note, and the other Loan
Documents, for the performance by Borrowers of any of the agreements
and obligations thereunder or for the making by Borrowers of the
borrowing contemplated by this Agreement or for the conduct by
Borrowers of its business; or
(ii) to ensure the continuing legality, validity,
binding effect, enforceability or admissibility in evidence of this
Agreement, the Revolving Credit Notes and the other Loan Documents.
Section 5.3 Binding Effect of Documents, Etc. Each of the Loan
Documents which each Borrower has or is to have executed and delivered as
contemplated and required to be executed and delivered as of the Closing Date by
this Agreement has been so executed and delivered by each Borrower, and each
such Loan Document is and will be in full force and effect. The agreements and
obligations of such Borrower contained in each such Loan Document constitute or
shall constitute legal, valid and binding obligations of such Borrower,
enforceable against each Borrower in accordance with its respective terms.
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Section 5.4 No Events of Default, Etc.
(a) No event has occurred and is continuing, and no condition
exists, which constitutes a Default or an Event of Default.
(b) No default by a Borrower and no accrued right of
rescission, cancellation or termination on the part of a Borrower, exists under
this Agreement or any of the other Loan Documents.
Section 5.5 Financial Statements. The balance sheets and other
financial statements of Borrowers dated March 29, 1998 previously delivered to
Agent ("Current Financial Statements") have been prepared in accordance with
GAAP except as otherwise indicated in the notes to such financial statements and
subject in the case of unaudited statements to changes resulting from year-end
adjustments. The balance sheets contained in the Current Financial Statements
present fairly the financial condition of the Borrowers as of the dates thereof
in accordance with GAAP. The statements of income contained in the Current
Financial Statements present fairly the results of operations of Borrowers for
the Fiscal Periods then ended in accordance with GAAP. There are no material
liabilities or obligations, secured or unsecured (whether accrued, absolute or
actual, contingent or otherwise), which were not reflected in the audited
balance sheets of Borrowers or that as at such date or in the footnotes thereto,
and which should, in accordance with GAAP, have been reflected in such balance
sheets.
Section 5.6 Changes; None Adverse. No changes have occurred in the
assets, liabilities or financial condition of the Borrowers from those reflected
in the most recent balance sheet referred to in Section 5.5 hereof (the "Current
Balance Sheet") which, individually or in the aggregate, have been materially
adverse. Since the date of Current Balance Sheet, there has been no material
adverse development in the business or in the operations of Borrowers.
Section 5.7 Title to Assets; Material Leases. Each Borrower has good,
sufficient and legal title to, or leasehold interest in, all the Property and
assets reflected in the Current Balance Sheet. Each Borrower enjoys peaceful and
undisturbed possession of all Property subject to Material Leases and all such
Material Leases are valid and in full force and effect. All Material Leases in
effect on the Closing Date are set forth on Schedule 5.7.
Section 5.8 Intellectual Property.
(a) Schedule 5.8 sets forth a complete and correct list of all
Patents and Trademarks owned by Borrowers on the date hereof which are material
to Borrowers' business or financial condition. Borrowers own and possess the
right to use any Patent or Trademark listed on said Schedule 5.8 and all
registrations listed on said Schedule 5.8 are valid and in full force and
effect. Borrowers own and possesses the right to use all registered Patents and
Trademarks. Borrowers have done nothing to authorize or enable any other Person
to use any Patent or Trademark listed on said Schedule 5.8 except as provided
for in the franchise agreements and the development agreements listed in
Schedule 5.24.
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(b) Schedule 5.8 sets forth a complete and correct list of all
licenses and other user agreements included in the Intellectual Property on the
date hereof.
(c) (i) There is no violation by others of any right of
Borrowers with respect to any registered Patent or Trademark listed on Schedule
5.8; (ii) to Borrowers' knowledge, Borrowers are not infringing in any respect
upon any Patent or Trademark of any other Person; (iii) no material proceedings
have been instituted or are pending against any Borrower or, to Borrowers'
knowledge, threatened, and no claim against any Borrower has been received by
Borrowers, alleging any such violation.
Section 5.9 Indebtedness for Borrowed Money. No Indebtedness of any
Borrower is secured by or otherwise benefits from any Lien on or with respect to
the whole or any part of Borrowers' properties or assets, present or future.
There exists no default or event or condition which, with the giving of notice
or passage of time, or both, would constitute a default under the provisions of
any instrument evidencing such Indebtedness or of any agreement relating thereto
which would interfere with the priority of Agent's lien on the Collateral.
Section 5.10 Litigation. There is no pending, or to Borrowers'
knowledge, threatened material action, suit, proceeding or investigation before
any court, governmental or regulatory authority, agency, commission or official,
board of arbitration or arbitrator against Borrowers or in which any Borrower is
a participant ("Litigation"). There are no proceedings pending or, to Borrowers'
knowledge, threatened against any Borrower which call into question the validity
or enforceability of any of the Loan Documents.
Section 5.11 No Materially Adverse Contracts. No Borrower is a party to
or bound by any forward purchase contract, futures contract, covenant not to
compete, unconditional purchase, take or pay or other contracts, agreements or
instruments (whether written or oral) which restricts its ability to conduct its
business or, either individually or in the aggregate has or could reasonably be
expected to have a Material Adverse Effect.
Section 5.12 Taxes and Tax Returns, Etc.
(a) Each Borrower has timely filed (inclusive of any permitted
extensions) or had filed on its behalf with the appropriate taxing authorities
all material returns (including without limitation, material information returns
and other material information) in respect of taxes required to be filed through
the date hereof. The information filed was complete and accurate in all material
respects at the time of filing. No Borrower nor any group of which Borrower is
or was the common parent has requested any extension of time within which to
file returns (including, without limitation, information returns) in respect of
any taxes other than routine extensions of time for filing returns which have
not involved the payment of material taxes (other than taxes immaterial in
amount) beyond the due date thereof.
(b) All taxes and assessments in respect of periods beginning
prior to the date hereof have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as reflected in the most recent
financial statements of Borrowers. No Borrower has any liability for taxes in
excess of the amounts so paid or reserves so established.
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(c) No deficiencies for taxes have been claimed, proposed or
assessed by any taxing authority or other governmental authority against any
Borrower nor any Subsidiary of a Borrower and no tax liens have been filed.
Except as otherwise set forth on Schedule 5.12(c) hereto, there are no pending
or threatened audits, investigations or claims for or relating to any liability
in respect to taxes, and there are no matters under discussion with any taxing
authorities or other governmental authorities with respect to taxes which are
likely to result in a additional liability for taxes. No extension of a statute
of limitations relating to taxes or assessments is in effect with respect to any
Borrower.
(d) Neither Borrowers nor any Subsidiary of a Borrower has any
obligation under any tax sharing agreement or agreement regarding payments in
lieu of taxes.
Section 5.13 Contracts with Affiliates, Etc.
(a) Except as permitted by Section 8.11 hereof, no Borrower is
a party to or otherwise bound by any written agreements, instruments or
contracts (whether written or oral) with any Affiliate other than the agreements
listed on Schedule 5.13 hereto.
(b) There is no Indebtedness for Borrowed Money owing by any
Borrower to any Affiliate nor is there Indebtedness for Borrowed Money owing by
any Affiliate to any Borrower.
Section 5.14 Employee Benefit Plans.
(a) Each Borrower and its ERISA Affiliates are in compliance
in all material respects with any applicable provisions of ERISA and the
regulations thereunder and of the Internal Revenue Code of 1986, as amended,
with respect to all Employee Benefit Plans.
(b) No Termination Event has occurred or is reasonably
expected to occur with respect to any Guaranteed Pension Plan.
(c) The actuarial present value of all benefit commitments
under each Guaranteed Pension Plan does not exceed the assets of that Plan.
(d) No Borrower nor any of its ERISA Affiliates has incurred
or reasonably expects to incur any withdrawal liability under ERISA to
Multiemployer Plans.
As used in this Section 5.14, the terms "actuarial present value" and
"benefit commitments" shall have the meanings specified in Section 4001 of
ERISA.
Section 5.15 Governmental Regulation. No Borrower is a "public utility
company", a "holding company" or a "subsidiary" or an "affiliate" of a "holding
company," as such terms are defined in the federal Public Utility Holding
Company Act of 1935, as amended. No Borrower is an "investment company" or a
company "controlled" by an "investment company," as such terms are defined in
the Federal Investment Company Act of 1940, as amended. No Borrower is subject
to regulation under the Public Utility Holding Company Act 1935, the Federal
Power Act, the
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Interstate Commerce Act or the Investment Company Act of 1940 or to any federal
or state statute or regulation limiting its ability to incur Indebtedness for
Borrowed Money.
Section 5.16 Securities Activities. No Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying any
"margin security" or "margin stock" as such terms are used in Regulation G, T, U
and X of the Board of Governors of the Federal Reserve System.
Section 5.17 Disclosure. Neither this Agreement, any other Loan
Document, nor any other document, certificate or written statement furnished to
Agent or any Lender by or on behalf of Borrowers for use in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading as of the date of such document,
certificate or other statement. There is no fact known to any Borrower which has
or which could reasonably be expected in the future to have a Material Adverse
Effect.
Section 5.18 No Material Default. No Borrower is in default under any
material order, writ, judgment, injunction, decree, statute or governmental
rule, indenture, agreement, contract, lease or other instrument or contract
applicable to it, which default would have a Material Adverse Effect or
adversely effect any Borrower's performance of any covenants or conditions
respecting any of its Indebtedness, and no holder of any Indebtedness of any
Borrower has given notice of any asserted default thereunder, and no liquidation
or dissolution of any Borrower and no receivership, insolvency, bankruptcy,
reorganization or other similar proceedings relative to any Borrower or its
Property is pending or is threatened.
Section 5.19 Environmental Conditions.
(a) Each Borrower and its Affiliates have obtained all
necessary and material permits, licenses, variances, clearances and all other
necessary approvals (collectively the "EPA Permits") for use of the Real Estate
and the operation and conduct of its business from all applicable federal,
state, and local governmental authorities, utility companies or
development-related entities including, but not limited to, any and all
appropriate federal or state environmental protection agencies and other county
or city departments, public water works and public utilities in regard to the
use of the Real Estate and the operation and conduct of its business, and the
handling, transporting, treating, storage, disposal, discharge, or Release of
Hazardous Substances, if any, into, on or from the environment (including, but
not limited to, any air, water, or soil).
Each issued EPA Permit is in full force and effect, has not expired or
been suspended, denied or revoked, and is not under challenge by any Person.
Each Borrower is in compliance with each issued EPA Permit.
(b) To the knowledge of any Borrower, neither any Borrower,
the Real Estate, nor any other Property owned or leased by a Borrower is subject
to any material private or governmental litigation, threatened litigation, Lien
or judicial or administrative notice, order or action relating to Hazardous
Substances or environmental problems, impairments or liabilities with respect to
the Real Estate or such other Property.
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(c) There has been no Release (as defined in Section 101(22)
of CERCLA) into, on or from any Real Estate and no Hazardous Substances (except
"Household Waste" as that term is defined at 40 C.F.R. 261.4(b)(1) (1990)) are
located on or have been treated, stored, processed, disposed of, handled,
transported to or from, disposed of upon the Real Estate during Borrower's
ownership or into, upon or from the environment including, but not limited to,
any air, water, or soil. No Borrower has allowed any Hazardous Substance to
exist or be treated, stored, disposed, Released, located, discharged, possessed,
managed, processed, or otherwise handled on the Real Estate or in the operation
or conduct of its respective businesses in violation of Environmental Laws, and
complied in all material respects with all Environmental Laws affecting the Real
Estate.
(d) Borrowers and their Affiliates do not and shall not
transport, in any manner, any Hazardous Substances except in the ordinary course
of business in compliance with Environmental Laws.
(e) No Borrower has received written notice of any
circumstances which would result in any material obligation under any
Environmental Law to investigate or remediate any Hazardous Substances in, on or
under the Real Estate.
Section 5.20 Licenses and Permits. Each Borrower owns or possesses all
material Licenses and Permits and rights with respect thereto, necessary for the
conduct of its business as presently conducted and proposed to be conducted,
without any known conflict with the rights of others, and, in each case, free of
any Lien not permitted by Section 8.7 of this Agreement. All of the foregoing
are in full force and effect, and each Borrower is in material compliance with
the foregoing without any known material conflict with the valid rights of
others. To the Borrowers' knowledge, no event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such License or Permit, or affect the rights of such Borrower
thereunder.
Section 5.21 Special Flood Hazard Determination. Except as set forth on
Schedule 5.21 none of the Real Estate owned by Borrowers is located within a
hundred year flood plain or an area identified by FEMA as being in a special
flood hazard area.
Section 5.22 General Collateral Representation.
(a) Each Borrower is the sole owner of and has good and
marketable title to its Collateral, free from all Liens, in favor of any Person
other than the Agent and except Permitted Liens, and has full right and power to
grant the Agent a security interest therein. All information furnished to the
Agent concerning the Collateral is and will be complete, accurate and correct in
all material respects when furnished.
(b) No security agreement, UCC Financing Statement, equivalent
security or Lien instrument or continuation statement covering all or any part
of the Collateral is on file or of record in any public office, except such as
may have been filed (i) by Borrowers in favor of Agent pursuant to this
Agreement, or (ii) in respect of the items of Collateral subject to the
Permitted Liens.
(c) The provisions of this Agreement are sufficient to create
in favor of the Agent, as of the Closing Date, a valid and continuing lien on,
and first security interest in, the types of the
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Collateral hereunder in which a security interest may be created under Article 9
of the UCC. UCC Financing Statements have been duly executed on behalf of
Borrowers and the description of such Collateral set forth therein is sufficient
to perfect first priority security interests in such Collateral in which a
security interest may be perfected by the filing of UCC Financing Statements.
When such UCC Financing Statements are duly filed in the filing offices listed
on Schedule 5.22, and the requisite filing fees are paid, such filings will be
sufficient to perfect security interests in such of the Collateral described in
the UCC Financing Statements as can be perfected by filing (other than Equipment
affixed to real property so as to become fixtures), which perfected security
interests will be prior to all other Liens in favor of others and rights of
others, enforceable as such as against creditors of and purchasers from
Borrowers (other than purchasers of Inventory in the ordinary course) and as
against any owner of the Real Estate where any of the Equipment is located and
as against any purchaser of such Real Estate and any present or future creditor
obtaining a Lien on such real property.
(d) Upon delivery to and possession by Agent of the Pledged
Interests pursuant to the terms of the Pledge Agreements, Agent shall possess a
valid, first priority security interest in such Pledged Interests in accordance
with Article 9 of the UCC; and
(e) No Person now having possession or control of any of the
Collateral consisting of Inventory or Equipment has issued, in receipt therefor,
a negotiable bill of lading, warehouse receipt or other document of title.
Section 5.23 Year 2000 Compatibility. (a) Each Borrower represents and
warrants that to the best of its knowledge either it or NPC has developed and
begun to implement a plan to modify its date-sensitive hardware, software,
processes, procedures, interfaces and similar operating systems used within such
Borrower's operations so that such systems will not abruptly end or provide
invalid or incorrect results during the operation of such Borrower's business on
or after January 1, 2000, including, but not limited to date data century
recognition, calculations that accommodate same century and multi-century
formulas and date values, date data interface values that reflect the century,
and which include year 2000 leap year calculations.
Section 5.24 Franchises. Schedule 5.24 sets forth a complete and
correct list of all franchise agreements and development agreements to which any
Borrower is a party on the date hereof.
ARTICLE 6
AFFIRMATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender
that, from and after the Closing Date and until all of the Obligations are paid
and satisfied in full except as otherwise expressly consented to in writing by
the Requisite Lenders (unless the context otherwise requires):
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Section 6.1 Reports and Other Information.
(a) Borrowers shall provide to Agent as soon as available, and
in any event within thirty (30) days after the close of each Fiscal Period of
Holdings, balance sheets of Holdings as of the end of such Fiscal Period and
Consolidated statements of income and statements of cash flow of Holdings for
such Fiscal Period and for the period commencing at the end of the previous
fiscal year and ending with the end of such Fiscal Period, certified by the
chief financial officer, principal accounting officer or chief executive officer
of Holdings to the effect that such financial statements, while not examined by
independent public accountants, reflect in his opinion and in the opinion of
senior management of Holdings, all adjustments necessary to present fairly the
Consolidated financial position of Holdings as at the end of such Fiscal Period
and the results of its operations for the Fiscal Period then ended in conformity
with GAAP consistently applied, subject only to year-end and audit adjustments,
which statements shall be delivered at the end of each Fiscal Period, together
with a certificate of such officer stating that as of the date of such
certificate that, to the best of his knowledge, after reasonable inquiry, no
event has occurred which constitutes an Event of Default or would constitute an
Event of Default with the giving of notice or the lapse of time or both, or, if
an Event of Default or such an event has occurred and is continuing, a statement
as to the nature thereof and the action which Holdings has taken or proposes to
take with respect thereto.
(b) Borrowers shall provide to the Agent as soon as available,
and in any event within forty-five (45) days after the close of each quarter of
each fiscal year of Holdings, balance sheets of Holdings as of the end of such
quarter and Consolidated statements of income and statements of cash flow of
Holdings and its divisions and Subsidiaries for such quarter and for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, certified by the chief financial officer, principal accounting
officer or chief executive officer of Holdings to the effect that such financial
statements, while not examined by independent public accountants, reflect in his
opinion all adjustments necessary to present fairly the financial position of
Holdings as at the end of such quarter and the results of its operations for the
quarter then ended in conformity with GAAP consistently applied, subject only to
year-end and audit adjustments, which statements shall be delivered at the end
of each fiscal quarter, together with a certificate of such officer stating that
as of the date of such certificate that, to the best of his knowledge, after
reasonable inquiry, no event has occurred which constitutes a Default or an
Event of Default or would constitute a Default or an Event of Default with the
giving of notice or the lapse of time or both, or, if a Default or an Event of
Default or such an event has occurred and is continuing, a statement as to the
nature thereof and the action which Holdings has taken or proposes to take with
respect thereto, and further setting out in such detail as is reasonably
required by the Lenders Borrowers' compliance with the requirements of Article 7
and Sections 8.7 and 8.10 hereof.
(c) Borrowers shall provide to the Agent as soon as available
and in any event within ninety (90) days after the end of each fiscal year of
Holdings a copy of the annual financial statements for such year for Holdings,
including therein a copy of the balance sheets of Holdings as of the end of such
fiscal year and consolidated statements of income and statements of cash flow
and statements of shareholders' equity of Holdings and its divisions and
Subsidiaries, certified without qualification by the Accountants, together with
a certificate of the chief financial officer, principal accounting officer or
chief executive officer of Holdings stating that, as of the date of such
certificate, to the best of his knowledge and after reasonable inquiry, no event
has occurred which
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constitutes a Default or an Event of Default or, if a Default or an Event of
Default or such an event has occurred and is continuing, a statement as to the
nature thereof and the action which Holdings has taken or proposes to take with
respect thereto and further setting out in such detail as is reasonably required
by the Lenders Holdings's compliance with the requirements of Article 7 and
Sections 8.7 and 8.10 hereof.
(d) Together with each delivery of financial statements of
Holdings pursuant to Sections 6.1(b) or 6.1(c), Borrowers will deliver a
management report: (1) describing the operations and financial condition of
Holdings for the period then ended and the portion of the current fiscal year
then elapsed (or for the fiscal year then ended in the case of year-end
financials); (2) setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year and the corresponding
figures from the most recent Projections for the current fiscal year delivered
to the Agent pursuant to Section 6.1(f); and (3) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer or controller of
Holdings to the effect that such information fairly presents the results of
operations and financial condition of Holdings as at the dates and for the
periods indicated.
(e) Together with each delivery of financial statements of
Holdings pursuant to Sections 6.1(b) or 6.1(c), Borrowers will deliver a
management report updating Borrowers' actions during the preceding quarter to
ensure Year 2000 compatibility, and the actions they have taken with respect to
Year 2000 compatibility of all of its material suppliers.
(f) As soon as available and in any event not later than the
end of each fiscal year, Borrowers will deliver Projections for the forthcoming
fiscal year, either quarterly or for each Fiscal Period.
(g) Borrowers shall provide to the Agent, promptly after
sending or filing thereof, copies of all reports and communications which
Holdings sends to its securityholders, and copies of all reports and
registration statements which Holdings files with the Securities and Exchange
Commission.
(h) Each Borrower shall provide to the Agent as soon as
possible, and in any event within fifteen (15) days after a Borrower knows or
has reason to know that any Termination Event with respect to any Plan has
occurred, a statement of the chief financial officer or treasurer of such
Borrower describing such Termination Event and the action which such Borrower
proposes to take with respect thereto.
(i) Each Borrower shall provide to the Agent as soon as
possible, and in any event within five (5) days after the occurrence of a
Default or Event of Default, continuing on the date of such statement, a
statement of the chief financial officer or treasurer of such Borrower setting
forth the details of such Default or Event of Default, and the action which
Borrower proposes to take with respect thereto.
(j) If (and on each occasion that) any of the following events
shall occur:
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(i) any Loan Document shall at any time be
terminated, canceled or rescinded for any reason whatever; or
(ii) any action at law, suit in equity or other legal
proceeding shall at any time be commenced or threatened in writing by
any Person (A) to terminate, cancel or rescind any Loan Document, or
(B) to enforce any other Person's performance or observance of or
compliance with any covenants, agreements or obligations under any Loan
Document; or
(iii) any Person which is a party to or otherwise
bound by any Loan Document shall fail or refuse to perform, comply with
or observe or shall otherwise breach any one or more of the material
covenants, agreements or obligations under such Loan Document;
then Borrowers will promptly (and, in any event, within five (5) Business Days)
after Borrowers shall have first become aware of the occurrence of any such
event, furnish to Agent written notice setting forth brief particulars thereof.
(k) Each Borrower shall provide the Agent with the following
additional reports:
(i) as soon as available and in any event within a
reasonable time after the close of each fiscal year of Romacorp copies
of the portions of any and all auditor's letters, if any, to the board
of directors of Romacorp or to any other entity comprising Romacorp
regarding the various accounting practices and control procedures used
by any Borrower;
(ii) promptly after Borrowers become aware of the
commencement thereof, notice of all actions, suits and proceedings
before any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which may adversely
affect Borrowers and which are not fully covered by insurance without
the applicability of any co-insurance provisions or which have not been
bonded and in which either (A) the amount in controversy exceeds One
Hundred Twenty Five Thousand Dollars ($125,000) for any single
proceeding or Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate or (B) would cause a Material Adverse Effect;
(iii) as soon as practicable after becoming aware of
a claim by any Person that a Borrower is in default under any agreement
entered into in connection with Indebtedness for Borrowed Money in
excess of Two Hundred Fifty Thousand Dollars ($250,000), notice of any
such claim or default;
(iv) notice of any change in the conduct of the
business, prospects or financial condition of a Borrower promptly upon
such Borrower becoming aware of any such change which would have a
Material Adverse Effect;
(v) notice of any release of Hazardous Substances on
the Real Estate that is in material violation of Environmental laws or
would require remediation pursuant to
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applicable federal or state law or of any notification having been
filed with regard to a release of Hazardous Substances on or into Real
Estate under the Federal Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or the
Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., or any other applicable environmental law. Such notice shall
indicate the steps the responsible Borrower has or will take to
remediate all hazardous environmental conditions if any such steps are
required of it by applicable Environmental Law and the estimated costs
of such remediation; and
(vi) if (and on each occasion that) any event shall
at any time occur or any condition shall at any time develop which
constitutes a Default or an Event of Default, then, promptly (and, in
any event, within five (5) Business Days) after a Borrower shall have
first become aware of the occurrence or development of any such event
or condition, such Borrower will furnish or cause to be furnished to
Agent a written notice specifying the nature and the date of the
occurrence of such event or (as the case may be), the nature and the
period of existence of such condition and what action such Borrower is
taking or proposes to take with respect thereto.
(l) Each Borrower shall also provide the Agent with such other
information relating to any Borrower (including, without limitation, any
Employee Benefit Plan) as the Agent may from time to time reasonably request. To
the extent the Agent is obligated to do so by applicable law, rule or
regulation, it may deliver to any regulatory body having jurisdiction over it,
copies of the reports and other information provided by Borrowers to the Agent
pursuant to this Section 6.1.
Section 6.2 Maintenance of Property; Authorization; Insurance.
(a) Each Borrower covenants to keep and maintain all of its
Property in reasonably good repair, working order and condition, reasonable wear
and tear excepted, and from time to time to make, or use all reasonable legal
remedies to cause to be made, all proper repairs, renewals or replacements,
betterments and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
(b) At its own cost and expense, Borrowers shall obtain and
maintain during the term of this Agreement (i) insurance against loss,
destruction or damage to its properties as Agent may reasonably require from
time to time to fully protect the Agent's and Lenders' interests in the
Collateral; (ii) minimum flood insurance as required by FEMA or any other
government agency or when required by federal, state or local law, statute,
regulation or ordinance and as may reasonably be required by Agent and Lenders;
and (iii) insurance against public liability and third party property damage,
with such insurance companies, in such amounts and covering such risks as are at
all times reasonably satisfactory to Agent and naming Agent for the benefit of
Lenders as mortgagee, loss payee and additional insured as its interests may
appear. Borrowers agree to deliver to Agent upon request insurance certificates
or policies evidencing compliance with the above requirements. Each Borrower
covenants, warrants and represents that it will not do any act or voluntarily
suffer or permit any act to be done whereby any insurance required hereunder
shall or may be suspended, impaired or defeated. In the event that any item or
Collateral shall be lost, destroyed or irreparably
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damaged from any cause whatsoever during the term hereof, Borrowers agree to
proceed diligently and cooperate fully with Agent and Lenders in the recovery of
any and all proceeds of insurance applicable thereto, and the carriers named
therein are hereby directed by Borrower to make payment for such loss to Agent,
on behalf of the Lenders, and not to Borrowers and Lenders jointly. If any
insurance losses are paid by check, draft or other instrument payable to
Borrowers and Agent and Lenders jointly, Agent may endorse the names of
Borrowers thereon and do such other things as it may deem advisable to reduce
the same to cash. Provided Borrower is not in Default in any of its Obligations
to Agent or Lenders under any of the Loan Documents, all loss recoveries
received by Agent and Lenders upon any such insurance shall be paid by Agent and
Lenders to Borrowers so long as such proceeds promptly are reinvested in such
Borrower's business. Should any Borrower then be in default in any of its
obligations to Agent or Lenders under any of the Loan Documents, such cash
resources may be applied and credited by Agent and Lenders to any obligation,
subject to Section 2.9(a). Borrowers further covenant that each shall require
that the insurer with respect to each such insurance policy provide for thirty
(30) days' advance written notice to Agent of any cancellation or termination
of, or other change of any nature whatsoever in, the coverage provided under any
such policy.
Section 6.3 Key Man Life Insurance. Within one hundred and twenty (120)
days of the Closing Date, Borrowers shall obtain and maintain a key man life
insurance policy covering Robert B. Page in an amount not less than $2,000,000
and Borrowers shall maintain such insurance in full force and effect until the
Loans have been paid in full and all financing agreements among Borrowers, Agent
and the Lenders related thereto have been terminated. Borrowers shall assign
such policy to the Agent for the benefit of itself and the Lenders pursuant to
an assignment in form and substance satisfactory to the Agent with respect to
such policy.
Section 6.4 Entity Existence. Each Borrower that is a corporation shall
preserve and maintain its existence as a corporation in its state of its
incorporation on the Closing Date and all of its rights, franchises and
privileges as a corporation. Each Borrower that is a partnership shall preserve
and maintain its existence as a partnership in its state of its organization on
the Closing Date and all of its rights, franchises and privileges as a
partnership.
Section 6.5 Inspection Rights. At any reasonable time, upon reasonable
notice, and from time to time, each Borrower shall permit the Agent or any
Lender, or any of their respective agents, representatives or current or
prospective participants in the Loan, to inspect the Collateral, to examine and
make copies of and abstracts from the records and books of account of, to visit
the properties of, any Borrower and to discuss the affairs, finances and
accounts of such Borrower with any of their officers, employees, agents or the
Accountants.
Section 6.6 Payment of Taxes and Claims. Each Borrower shall pay or
cause to be paid all taxes, assessments and other governmental charges imposed
upon its properties or assets or in respect of any of its franchises, business,
income or profits before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have
become due and payable and which by law have become a lien or charge upon any of
its properties or assets, provided that (unless any material item of property
would be lost, forfeited or materially damaged as a result thereof) no such
charge or claim need be paid if the amount, applicability or validity
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thereof is currently being contested in good faith and if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor.
Section 6.7 Compliance with Laws.
(a) Each Borrower will materially comply with all applicable
federal, state and local laws, rules, regulations and orders pertaining to the
operation of its business, paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or its properties, and paying all lawful claims which if
unpaid might become a Lien upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(b) Each Borrower will promptly notify each Lender in the
event that such Borrower receives any notice, claim or demand from any
governmental agency which alleges that such Borrower is in material violation of
any of the terms of, or has materially failed to comply with any applicable
order issued pursuant to any Federal, state or local statute regulating its
operation and business, including, but not limited to, the Occupational Safety
and Health Act, the Federal Comprehensive Environmental Response, Compensation
and Liability Act and the Resource Conservation and Recovery Act and the Federal
Water Pollution Control Act.
Section 6.8 Notice of Other Events. Immediately upon a Borrower first
becoming aware of any of the following occurrences, such Borrower will furnish
or cause to be furnished to Agent written notice with full particulars of (i)
the business failure, insolvency or bankruptcy of Borrower; (ii) the rescission,
cancellation or termination, or the creation or adoption, of any material
agreement or contract to which Borrower is a party; (iii) any material labor
dispute, any attempt by any labor union or organization representatives to
organize or represent employees of any Borrower, or any unfair labor practices
or proceedings of the National Labor Relations Board with respect to Borrower;
or (iv) any material defaults or events of default under any material agreement
of Borrower or any material violations of any laws, regulations, rules or
ordinances of any governmental or regulatory body.
Section 6.9 Communication with Accountants. Each Borrower authorizes
Agent or any Lender to communicate directly with the Accountants in the presence
of a representative of such Borrower and authorizes the Accountants to disclose
to Agent or such Lender any and all financial statements and other information
of any kind, including copies of any management letter or the substance of any
oral information or conversation that such Accountants may have with respect to
the business, financial condition and other affairs of Borrowers.
Section 6.10 Payment of Indebtedness. Each Borrower will duly and
punctually pay or cause to be paid principal and interest on the Loans and all
fees and other amounts payable hereunder or under the Loan Documents in
accordance with the terms hereunder. Each Borrower shall pay all other
Indebtedness (whether existing on the date hereof or arising at any time
thereafter) punctually in accordance with trade practices or within any
applicable period of grace except to the extent that any such obligation is
contested in good faith by proper proceedings or such Borrower
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has provided Agent evidence that any Lien resulting from the non-payment thereof
has been bonded or with respect to which adequate reserves have been set aside
for the payment thereof.
Section 6.11 Payment of Fees.
(a) Borrowers shall pay to Agent for the ratable benefit of
Lenders, the Commitment Fee, which shall commence to accrue on the Closing Date,
in monthly installments in arrears with the first installment being due on
August 1, 1998 and the subsequent installments being due on the first Business
Day of each month thereafter until the Termination Date, at which time all
accrued amounts of the Commitment Fee shall be immediately due and payable.
Agent shall distribute the Commitment Fee to Lenders in accordance with each
Lender's Pro Rata Share.
(b) Borrowers shall reimburse Agent for all fees, expenses and
disbursements incurred by Agent in connection with the transactions contemplated
by this Agreement.
Section 6.12 Performance of Obligations Under Certain Documents. Each
Borrower will duly and properly perform, observe and comply with all of its
agreements, covenants and obligations under this Agreement and each of the other
Loan Documents.
Section 6.13 Governmental Consents and Approvals.
(a) Each Borrower will obtain or cause to be obtained all such
approvals, consents, orders, authorizations and licenses from, give all such
notices promptly to, register, enroll or file all such agreements, instruments
or documents promptly with, and promptly take all such other action with respect
to, any governmental or regulatory authority, agency or official, or any central
bank or other fiscal or monetary authority, agency or official, as may be
required from time to time under any provision of any applicable law, except
where such nonattainment shall not have a Material Adverse Effect:
(i) for the performance by such Borrower of any of
its agreements or obligations under the Revolving Credit Notes, this
Agreement or any of the other Loan Documents or for the payment by such
Borrower to the Agent at its Head Office of any sums which shall become
due and payable by such Borrower to Agent or any Lender thereunder;
(ii) to ensure the continuing legality, validity,
binding effect or enforceability of the Revolving Credit Notes or any
of the other Loan Documents or of any of the agreements or obligations
thereunder of such Borrower; or
(iii) to continue the proper operation of the
business and operations of such Borrower.
(b) Each Borrower shall duly perform and materially comply
with the terms and conditions of all such approvals, consents, orders,
authorizations and Licenses and Permits from time to time granted to or made
upon such Borrower.
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Section 6.14 Employee Benefit Plans and Guaranteed Pension Plans. Each
Borrower will and will cause each of its ERISA Affiliates to (a) comply with all
requirements imposed by ERISA and the Internal Revenue Code of 1986, as amended,
applicable from time to time to any of its Guaranteed Pension Plans or Employee
Benefit Plans, (b) make full payment when due of all amounts which, under the
provisions of Employee Benefit Plans or under applicable law, are required to be
paid as contributions thereto, (c) not permit to exist any accumulated funding
deficiency, whether or not waived, (d) file on a timely basis all reports,
notices and other filings required by any governmental agency with respect to
any of its Employee Benefit Plans, (e) make any payments to Multiemployer Plans
required to be made under any agreement relating to such Multiemployer Plans, or
under any law pertaining thereto, (f) not amend or otherwise alter any
Guaranteed Pension Plan if the effect would be to cause the actuarial present
value of all benefit commitments under each Guaranteed Pension Plan to be less
than the current value of the assets of such Guaranteed Pension Plan allocable
to such benefit commitments, (g) furnish to all participants, beneficiaries and
employees under any of the Employee Benefit Plans, within the periods prescribed
by law, all reports, notices and other information to which they are entitled
under applicable law, and (h) take no action which would cause any of the
Employee Benefit Plans to fail to meet any qualification requirement imposed by
the Internal Revenue Code of 1986, as amended. As used in this Section 6.14, the
term "accumulated funding deficiency" has the meaning specified in Section 302
of ERISA and Section 412 of the Internal Revenue Code, and the terms "actuarial
present value", "benefit commitments" and "current value" have the meaning
specified in Section 4001 of ERISA.
Section 6.15 Further Assurances. Each Borrower will execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all such further assurances and other agreements or instruments, and
take or cause to be taken all such other action, as shall be reasonably
requested by the Agent from time to time in order to give full effect to any of
the Loan Documents.
Section 6.16 Bank Services.
(a) To the extent compliance with this section is not
unreasonable, within one hundred and twenty (120) days Borrowers shall
concentrate all of their bank and depository accounts with Provident, including
without limitation, all demand deposit, time deposit, concentration and zero
balance accounts except that any Borrower may maintain operating accounts with
any local financial institution, provided such Borrower shall use its best
efforts to maintain such accounts with one or more of the Lenders;
(b) To the extent compliance with this section is not
unreasonable, after the earlier of one hundred eighty (180) days after the
Closing Date or one hundred twenty (120) days from the hiring of a Chief
Financial Officer of Holdings, Borrowers shall maintain all credit card accounts
and 401(k) services with Provident, provided all fees for such services are
reasonable and customary.
Section 6.17 Use of Proceeds. Borrowers shall use all Loan proceeds
disbursed only in accordance with the purposes set forth in Section 2.10 of this
Agreement.
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ARTICLE 7
FINANCIAL COVENANTS
Each Borrower covenants with and warrants to Agent and each Lender
that, from and after the Closing Date and until all of the Obligations are paid
and satisfied in full except as otherwise expressly consented to in writing by
the Requisite Lenders (unless the context otherwise requires):
Section 7.1 EBITDA. Borrowers shall not permit their consolidated
EBITDA for any Reference Period to be less than Fifteen Million Dollars
($15,000,000).
Section 7.2 Interest Coverage Ratio. Holdings shall not permit the
ratio of its Consolidated EBITDA to Consolidated Cash Interest Expense for any
Reference Period to be less then 1.40 to 1.00.
ARTICLE 8
NEGATIVE COVENANTS OF BORROWER
Each Borrower covenants with and warrants to Agent and each Lender that
from and after the Closing Date and until all of the Obligations are paid and
satisfied in full except as otherwise expressly consented to in writing by the
Requisite Lenders:
Section 8.1 Limitation on Nature of Business. No Borrower will at any
time make any material change in the nature of its business as carried on at the
date hereto or reasonably related, ancillary or supplemental thereto, or
undertake, conduct or transact any business in a manner prohibited by applicable
law.
Section 8.2 Limitation on Fundamental Changes. No Borrower or any
Subsidiary of a Borrower shall at any time consolidate with or merge into or
with any Person or Persons or enter into or undertake any plan or agreement of
consolidation or merger with any Person except mergers of Borrowers with or into
other Borrowers and mergers the sole purpose of which is to change the merging
Borrower's jurisdiction of incorporation. No Borrower shall liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of Borrower's business or property whether now or
hereafter acquired. Neither Borrower nor any Subsidiary shall make or permit any
amendment or modification to its charter documents or by-laws.
Section 8.3 Restricted Payments. Following the Closing Date, Borrowers
will not and will not permit any of their Subsidiaries to directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Payments
except that:
(a) So long as no Default or Event of Default exists, Romacorp
may make the scheduled periodic payments of interest on the Senior Debt in
accordance with the terms thereof or otherwise as approved in writing by
Requisite Lenders; and
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(b) Borrowers may make Restricted Payments with respect to
their Capital Stock to the extent necessary to permit Borrowers to pay the
Obligations, to make any Restricted Payments permitted under clause (a) above,
to permit Borrowers to pay expenses incurred in the ordinary course of business
and, after , 200 , to permit Romacorp to pay the Senior Debt.
Section 8.4 Limitation on Disposition of Assets.
(a) Neither Borrowers nor any Subsidiary will,
without the express prior written consent of Agent, which consent shall not be
unreasonably withheld, sell, lease, transfer or otherwise dispose of any of its
property, business or assets, other than Real Estate or Intellectual Property
(but only to the extent required or necessary in connection with the grant of
area development rights), ("Asset Dispositions"), or grant any Person an option
to acquire any such property, business or assets except for (x) bona fide sales
of Inventory to customers in the ordinary course of business and dispositions of
obsolete equipment not used or useful in the business, (y) sale-leaseback
transactions in the aggregate amount not to exceed $5,000,000, and (z) asset
dispositions which satisfy the following conditions:
(i) the market value of assets sold or otherwise
disposed of in any single transaction or series of related transactions
does not exceed One Hundred Thousand Dollars ($100,000) and the
aggregate market value of assets sold or otherwise disposed of in any
Fiscal Year does not exceed Five Hundred Thousand Dollars ($500,000);
(ii) the consideration received is at least equal to
the fair market value of such assets;
(iii) if the consideration received is not solely in
cash, all non-cash consideration is pledged to the Agent pursuant to
documents satisfactory to the Agent so that the Agent has received a
first priority perfected security interest in such non-cash
consideration to secure the Obligations;
(iv) the Net Proceeds of such asset disposition are
applied as required by Section 2.7(c);
(v) after giving effect to the sale or other
disposition of the assets included within the asset disposition and the
repayment of Indebtedness with the proceeds thereof, Borrower is in
compliance on a pro forma basis with the covenants set forth in Article
7, recomputed for the most recently ended month for which information
is available and is in compliance with all other terms and conditions
contained in this Agreement;
(vi) no Default or Event of Default shall result from
such sale or other disposition; and
(vii) such assets include only tangible personal
property.
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(b) Except as permitted elsewhere in this Agreement, Borrowers
will not and will not permit any of its Subsidiary directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of Capital
Stock or other equity securities in any Borrower or any such Subsidiary
including warrants, rights or options to acquire shares or other equity
securities of any Subsidiary except to a Borrower or another Subsidiary of a
Borrower.
Section 8.5 Limitation on Investments. No Borrower shall at any time
make any Investments of any kind whatever in any Person or Persons; excluding,
however from the operation of the foregoing provisions of this Section 8.5:
(a) Assets to be used in the ordinary course of business of
such Borrower;
(b) Assets arising from the sale of goods and services in the
ordinary course of business of such Borrower; and
(c) Investments in cash and Cash Equivalents.
Section 8.6 Acquisition of Margin Securities. No Borrower shall own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by any regulation of the Federal Reserve Board as
now in effect or as the same may hereafter be in effect unless, prior to any
such purchase or acquisition or entering into any such contract, Agent and each
Lender shall have received an opinion of counsel satisfactory to Agent and each
Lender to the effect that such purchase or acquisition will not cause this
Agreement or the Revolving Credit Notes to be in violation of Regulation G, T,
U, X or any other regulation of the Federal Reserve Board then in effect.
Section 8.7 Limitation on Mortgages, Liens and Encumbrances. No
Borrower shall at any time create, assume, incur or permit to exist, any
mortgage, Lien or other encumbrance in respect of any of the Collateral, whether
heretofore or hereafter acquired by it without the express prior written consent
of Agent, such consent not to be unreasonably withheld; excluding, however, from
the operation of the foregoing provisions of this Section 8.7 (each a "Permitted
Lien"):
(a) Any Liens for taxes, assessments or governmental charges
or claims the payment of which is not at the time required by Section 6.7 of
this Agreement;
(b) Any statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent;
(c) Any Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security;
(d) Any easements, rights-of-way, encroachments, leases,
royalties, restrictions and other similar title exceptions or encumbrances
provided such do not, in the aggregate, materially
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interfere with the ordinary conduct of the business of a Borrower or materially
reduce or impair the value of the Real Estate so encumbered;
(e) Any interest or title of a lessor under any Material Lease
listed on Schedule 5.7 annexed to this Agreement;
(f) Liens granted to Agent for the benefit of Lenders and the
additional existing mortgages, Liens and encumbrances of Borrowers, listed and
described, but only to the extent indicated, on Schedule 8.7(f) annexed to this
Agreement; and
(g) The Indebtedness of a Borrower under or in respect to any
conditional sales agreements, security agreements, equipment leases in the
nature of title retention agreements or security agreements or other similar
title retention agreements entered into by a Borrower on, prior to or after the
date of this Agreement in order to secure the payment of the purchase price of
any equipment purchased, leased or otherwise acquired by such Borrower for use
in the ordinary course of its business; provided, however, that such Borrower
is, by the terms of each of Sections ? or 8.11 hereof, expressly permitted to
enter into such agreement or lease.
(h) Liens granted to a third party pursuant to a lease
financing arrangement or agreement for the acquisition of real property other
than Real Estate owned or leased by a Borrower on the Closing Date or the
development of restaurants situated on real property other than Real Estate
owned or leased by a Borrower on the Closing Date.
Section 8.8 No Additional Negative Pledges. Other than prohibitions
contained in the indentures covering the Senior Debt, no Borrower will create or
otherwise cause or suffer to exist or become effective, directly or indirectly,
(a) any prohibition or restriction (including any agreement to provide equal or
ratable security to any other Person in the event a Lien is granted to or for
the benefit of the Agent) on the creation or existence of any Lien upon the
assets of a Borrower, or (b) any contractual obligation which may restrict or
inhibit the Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
Section 8.9 No Restrictions on Subsidiary Distributions to Borrowers.
Except as provided herein, Borrowers will not and will not permit any Subsidiary
directly or indirectly to create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to: (1) pay dividends or make any other distribution on any of
a Subsidiary's Capital Stock owned by a Borrower or any Subsidiary of a
Borrower; (2) subject to subordination provisions, pay any indebtedness owed to
a Borrower or any other Subsidiary; (3) make loans or advances to a Borrower or
any other Subsidiary; or (4) transfer any of its property or assets to a
Borrower or any other Subsidiary.
Section 8.10 Limitation on Indebtedness. No Borrower shall at any time
create, incur or assume, or become or be liable (directly or indirectly) in
respect of, any Indebtedness for Borrowed Money, other than Indebtedness arising
under this Agreement and the other Loan Documents and the Senior Debt.
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Section 8.11 Transactions with Affiliates. No Borrower shall at any
time enter into or participate in any agreements or transactions of any kind
with any Affiliates of any Borrower (except that a Borrower shall be permitted
to enter into such agreements or transaction with any other Borrower), except
(i) agreements or transactions that produce annual payments of less than Twenty
Thousand Dollars ($20,000) individually or One Hundred Thousand Dollars
($100,000) in the aggregate, (ii) agreements or transactions entered into in the
ordinary course of business upon fair and reasonable terms no less favorable to
Borrower than could be obtained in a comparable arms-length transaction with an
unaffiliated Person, or (iii) obligations under the agreements listed on
Schedule 5.13 hereto.
Section 8.12 Changes Relating to Senior Debt. Neither Holdings nor
Borrowers will or permit any of its Subsidiaries to change or amend the terms of
any Senior Debt.
Section 8.13 No Additional Bank Accounts. Except as provided in Section
6.16, no Borrower shall open, maintain or otherwise have any bank accounts.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
Section 9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) Principal and Interest. Any principal, interest or any
other sum payable under this Agreement or the Revolving Credit Notes shall not
be paid when due;
(b) Representation and Warranties. Any representation or
warranty at any time made by or on behalf of a Borrower in this Agreement, any
Loan Document or in any certificate, written report or statement furnished to
Agent or any Lender pursuant hereto or thereto shall prove to have been untrue,
incorrect or breached in any material respect on or as of the date on which such
representation or warranty was made or deemed to have been made or repeated;
(c) Certain Covenants. Any Borrower shall fail to comply with
the covenants set forth in Sections 6.2(b), Article 7 or Article 8;
(d) Other Covenants. Any Borrower shall fail to perform,
comply with or observe or shall otherwise breach any other covenant or agreement
contained in this Agreement and such failure or breach shall continue for more
than thirty (30) days after the earlier of the date on which a Borrower shall
have first become aware of such failure or breach or Agent or any Lender shall
have first notified Borrower of such failure or breach;
(e) Loan Documents. The breach or a failure of a Borrower to
perform, comply with or observe any Loan Document or any other agreement,
document, instrument or certificate executed on delivered in connection with
this Agreement and if such failure shall continue for more than thirty (30) days
after the earlier of the date on which a Borrower shall have first become aware
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of such failure or breach or Agent or any Lender shall have first notified a
Borrower of such failure or breach, or any Loan Document shall cease to be
legal, valid, binding or enforceable in accordance with the terms thereof;
(f) Litigation. Any action at law, suit in equity or other
legal proceeding to amend, cancel, revoke or rescind any Loan Document shall be
commenced by or on behalf of a Borrower or any other Person bound thereby, or by
any court or any other governmental or regulatory authority or agency of
competent jurisdiction; or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or shall issue a judgment, order, decree or ruling to the effect that, any one
or more of the covenants, agreements or obligations of a Borrower under any one
or more of the Loan Documents are illegal, invalid or unenforceable in
accordance with the terms thereof;
(g) Default by a Borrower under other Agreements. Any default
by any Borrower or any event of default shall occur under any agreement,
instrument or contract relating to Indebtedness individually or in the aggregate
in excess of Five Hundred Thousand Dollars ($500,000) to which such Borrower is
at any time a party or by which such Borrower is at any time bound or affected,
or any Borrower shall fail to perform or observe any of its agreements or
covenants thereunder, and such default, event of default or failure shall
continue for such period of time as would permit, or as would have permitted
(assuming the giving of appropriate notice), holders of Indebtedness of any
Borrower to accelerate the maturity of all or any part of such Indebtedness
under any such document;
(h) Insolvency. Any action shall be taken by or on behalf of
any Borrower for the termination, winding up, liquidation or dissolution of such
Borrower; or a Borrower shall make an assignment for the benefit of creditors,
become insolvent or be unable to pay its debts as they mature; or a Borrower
shall file a petition in voluntary liquidation or bankruptcy; or a Borrower
shall file a petition or answer or consent seeking the reorganization of such
Borrower, or the readjustment of any of the Indebtedness of such Borrower; or a
Borrower shall commence any case or proceeding under applicable insolvency or
bankruptcy laws now or hereafter existing; or a Borrower shall consent to the
appointment of any receiver, administrator, custodian, liquidator or trustee of
all or any part of the Property or assets of such Borrower; or any corporate
action shall be taken by a Borrower for the purpose of effecting any of the
foregoing; or by order or decree of any court of competent jurisdiction, a
Borrower shall be adjudicated as bankrupt or insolvent; or any petition for any
proceedings in bankruptcy or liquidation or for the reorganization or
readjustment of Indebtedness of such Borrower shall be filed, or any case or
proceeding shall be commenced, under any applicable bankruptcy or insolvency
laws now or hereafter existing, against such Borrower, or any receiver,
administrator, custodian, liquidator or trustee shall be appointed for a
Borrower or for all or any part of the Property of a Borrower and such case or
proceeding shall remain undismissed for a period of sixty (60) days, or any
order for relief shall be entered in a proceeding with respect to such Borrower
under the provisions of the United States Bankruptcy Code, as amended;
(i) Judgment. Any judgment, order or decree for the payment of
money in excess of Two Hundred Fifty Thousand Dollars ($250,000) if not bonded
or insured, or Fifty Thousand Dollars ($50,000) otherwise, shall be rendered
against a Borrower, and such Borrower shall not
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discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, within Thirty (30) days after the date of
the entry thereof;
(j) ERISA. (i) Any Termination Event shall occur and as of the
date thereof or any subsequent date, the sum of the various liabilities of
Borrowers and their ERISA Affiliates (such liabilities to include, without
limitation, any liability to the Pension Benefit Guaranty Corporation (or any
successor thereto) or to any other party under Sections 4062, 4063, or 4064 of
ERISA or any other provision of law and to be calculated after giving effect to
the tax consequences thereof) resulting from or otherwise associated with such
event exceeds Fifty Thousand Dollars ($50,000); or Borrowers of any of their
ERISA Affiliates as an employer under any Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plans and the plan
sponsors of such Multiemployer Plans shall have notified such withdrawing
employer that such employer has incurred a withdrawal liability requiring a
payment in an amount exceeding Fifty Thousand Dollars ($50,000);
(k) Change of Control. Any Change of Control shall occur;
(l) Material Adverse Change. Unless and until Provident has
been acquired by another financial institution, any event or occurrence which
has a Material Adverse Effect.
Section 9.2 Termination of Commitments and Acceleration of Obligations.
If any one or more of the Events of Default shall at any time occur:
(a) The Agent may, and upon the request of the Requisite
Lenders, shall, by giving notice to Borrowers, immediately terminate the Credit
Commitments of all of the Lenders in full and each Lender shall thereupon be
relieved of all of its obligations to make any Loans thereunder; except that if
there shall be an Event of Default under Section 9.1(h) hereof, the Credit
Commitments of all of the Lenders shall automatically terminate in full, and
each Lender shall thereupon be relieved of all of its obligations to make any
Loans hereunder.
(b) The Agent, upon the request of the Requisite Lenders,
shall, by giving notice to Borrowers (in this Agreement and in the other Loan
Documents called a "Notice of Acceleration"), declare all of the Obligations,
including the entire unpaid principal of the Revolving Credit Notes, all of the
unpaid interest accrued thereon, and all other sums (if any) payable by
Borrowers under this Agreement, the Revolving Credit Notes, or any of the other
Loan Documents, to be immediately due and payable; except that if there shall be
an Event of Default under Section 9.1(h), all of the Obligations, including the
entire unpaid balance of all of the Revolving Credit Notes, all of the unpaid
interest accrued thereon and all other sums (if any) payable by Borrowers under
this Agreement, the Revolving Credit Notes or any of the other Loan Documents
shall automatically and immediately be due and payable without notice to
Borrowers. Thereupon, all of such Obligations which are not already due and
payable shall forthwith become and be absolutely and unconditionally due and
payable, without any further notice or any other formalities of any kind, all of
which are hereby expressly and irrevocably waived.
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Section 9.3 Remedies. From and after the occurrence of an Event of
Default which is continuing and which has not been waived by the Agent at the
direction of the Requisite Lenders, the Agent may, and, upon the request of the
Requisite Lenders, shall:
(a) Subject always to the provisions of Section 10.9 hereof,
proceed to protect and enforce all or any of its or the Lenders' rights,
remedies, powers and privileges under this Agreement, the Revolving Credit Notes
or any of the other Loan Documents by action at law, suit in equity or other
appropriate proceedings, whether for specific performance of any covenant
contained in this Agreement, any Revolving Credit Note or any of the other Loan
Documents, or in aid of the exercise of any power granted to Agent herein or
therein. In the event the Agent shall fail or refuse to so proceed, the
Requisite Lenders shall be entitled to take such action as they shall deem
appropriate to enforce their rights hereunder and under the other Loan
Documents.
(b) remove from any premises where same may be located any and
all Inventory or any and all documents, instruments, files and records
(including the copying of any computer records), and any receptacles or cabinets
containing same, relating to the Accounts of the Borrowers, or the Agent may use
(at the expense of the Borrowers) such of the supplies or space of the
Borrowers, at any Borrowers' place of business or otherwise, as may be necessary
to properly administer and control the Accounts of the Borrowers or the handling
of collections and realizations thereon;
(c) bring suit, in the name of any Borrower or the Lenders,
and generally shall have all other rights respecting said Accounts, including,
without limitation, the right to: accelerate or extend the time of payment,
settle, compromise, release in whole or in part any amounts owing on any such
Accounts and issue credits in the name of any Borrower or the Lenders;
(d) sell, assign and deliver such Inventory and Accounts and
any returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise, at
the Agent's sole discretion, and any Lender may bid-or become a purchaser at any
such sale, free from any right of redemption, which right is hereby expressly
waived by the Borrowers;
(e) (i) notify the Account Debtor on any Account or Chattel
Paper of Lenders' security interest therein; (ii) demand that monies due or to
become due be paid directly to Agent for the account of Lenders; (iii) open
Borrowers' mail and to collect any and all amounts due Borrowers from account
debtors; (iv) enforce payment of the accounts receivable or Chattel Paper by
legal proceedings or otherwise; (v) exercise all of Borrowers' rights and
remedies with respect to the collection of the accounts receivable or Chattel
Paper; (vi) settle, adjust, compromise, modify, extend or renew the accounts
receivable or Chattel Paper; (vii) settle, adjust or compromise any legal
proceedings brought to collect the accounts receivable or Chattel Paper; (viii)
to the extent permitted by applicable law, sell or assign the accounts
receivable or Chattel Paper upon such terms, for such amounts and at such time
or times as Agent deems advisable; (ix) grant waivers or indulgences with
respect to, accept partial payments from, discharge, release, surrender,
substitute any customer security for, make compromise with or release, any other
party liable on, any account receivable or Chattel Paper; (x) take control, in
any manner, of any item of payment or proceeds from any account debtor; (xi)
prepare, file, and sign Borrowers' name on any proof of claim in Bankruptcy or
similar
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document against any account debtor; (xii) prepare, file, and sign the
appropriate Borrower's name on any notice of lien, assignment or satisfaction of
lien or similar document in connection with the accounts receivable or Chattel
Paper; (xiii) endorse the name of the appropriate Borrower upon any Chattel
Paper, document, instrument, invoice, freight bill, bill of lading or similar
document or agreement relating to the accounts receivable or Chattel Paper or
inventory; (xiv) use the appropriate Borrower's stationery and sign the
appropriate Borrower's name to verifications of the accounts receivable or
Chattel Paper and notices thereof to account debtors; and (xv) use the
information recorded on or contained in any data processing Equipment or
computer hardware or software relating to the accounts receivable, Chattel
Paper, inventory, or proceeds thereof to which such Borrower has access; and
(f) foreclose the security interests created pursuant to the
Loan Documents by any available judicial procedure, or take possession of any or
all of the Inventory and Equipment of any Borrower without judicial process and
enter any premises where any such Inventory and Equipment may be located for the
purpose of taking possession of or removing the same.
The Agent shall have the right, without notice of advertisement, to
sell, lease, or otherwise dispose of all or any part of the Inventory and
Equipment of any Borrower, whether in its then condition or after further
preparation or processing, in the name of such Borrower, or the Lenders, or in
the name of such other party as the Agent may designate, either at public or
private sale or at any broker's board, in lots or in bulk, for cash or for
credit, with or without warranties or representations, and upon such other terms
and conditions as the Agent in its sole discretion may deem advisable, and the
Agent or any other Lender shall have the right to purchase at any such sale. If
any such Inventory and Equipment shall require rebuilding, repairing,
maintenance or preparation, the Agent shall have the right, at its option, to do
such of the aforesaid as is necessary, for the purpose of putting such Inventory
and Equipment in such saleable form as the Agent shall deem appropriate. The
Borrowers agree, at the request of the Agent, to assemble such Inventory and
Equipment and to make it available to the Agent at places which the Agent shall
reasonably select, whether at the premises of such Borrower or elsewhere, and to
make available to the Agent the premises and facilities of such Borrower for the
purpose of the Agent's taking possession of, removing or putting such Inventory
and Equipment in saleable form. However, if notice of intended disposition of
any Collateral is required by law, it is agreed that five (5) Business Days
notice shall constitute reasonable notification and full compliance with the
law. The Agent shall be entitled to use all intangibles and computer software
programs and data bases used by a Borrower in connection with its business or in
connection with the Collateral. The net cash proceeds resulting from the Agent's
exercise of any of the foregoing rights (after deducting all charges, costs and
expenses including reasonable attorneys' fees) shall be applied by the Agent to
the payment of the Obligations, whether due or to become due, in such order as
the Agent may elect. Each Borrower shall remain liable to the Lenders for any
deficiencies, and the Lenders in turn agree to remit to the appropriate Borrower
or its successors or assigns, any surplus resulting therefrom. The enumeration
of the foregoing rights is not intended to be exhaustive and the exercise of any
right shall not preclude the exercise of any other rights, all of which shall be
cumulative.
Section 9.4 No Implied Waiver; Rights Cumulative. No delay on the part
of the Agent or any Lender in exercising any right, remedy, power or privilege
under any of the Loan Documents or provided by statute or at law or in equity or
otherwise shall impair, prejudice or constitute a
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waiver of any such right, remedy, power or privilege or be construed as a waiver
of any Default or Event of Default or as an acquiescence therein. No right,
remedy, power or privilege conferred on or reserved to Agent or any Lender under
any of the Loan Documents or otherwise is intended to be exclusive of any other
right, remedy, power or privilege. Each and every right, remedy, power and
privilege conferred on or reserved to Agent or any Lender under any of the Loan
Documents or otherwise shall be cumulative and in addition to each and every
other right, remedy, power or privilege so conferred on or reserved to Agent or
any such Lender and may be exercised at such time or times and in such order and
manner as Agent or any such Lender shall (in its sole and complete discretion)
deem expedient.
Section 9.5 Set-Off; Pro Rata Sharing. If any principal, interest or
other sum payable by a Borrower to Agent or any Lender under the Revolving
Credit Notes or any of the Loan Documents is not paid to Agent or such Lender
punctually when the same shall first become due and payable, or if any Event of
Default shall at any time occur, any deposits, balances or other sums credited
by or due from Agent or such Lender or any of the offices or branches of Agent
or any Lender to any Borrower, may, without any prior notice of any kind to such
Borrower, or compliance with any other conditions precedent now or hereafter
imposed by statute, rule or law or otherwise (all of which are hereby expressly
and irrevocably waived by Borrowers), be immediately set off, appropriated and
applied by Agent or such Lender toward the payment and satisfaction of the
Obligations (but not to any other obligations of any Borrower to Agent or such
Lender until all of the Obligations have been paid in full) in such order and
manner as Agent or such Lender (in its sole and complete discretion) may
determine, subject, however, to the provisions of Section 10.13.
ARTICLE 10
CONCERNING THE AGENT AND THE LENDERS
The Agent and the Lenders agree as follows:
Section 10.1 Appointment of the Agent. Each of the Lenders hereby
appoints Provident to serve as Agent, under this Agreement and the other Loan
Documents, and in such capacity, to administer this Agreement, and the other
Loan Documents.
Section 10.2 Authority. Each of the Lenders hereby irrevocably
authorizes the Agent (i) to take such action on such Lender's behalf under this
Agreement and the other Loan Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are delegated to or required of
the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (ii) to take such action on such Lender's
behalf as the Agent shall consider necessary or advisable for the protection,
collection or enforcement of any of the Obligations. The Agent will promptly
notify each of the Lenders as soon as it becomes aware of any Default or Event
of Default or any failure by the Borrowers to make any payment in respect of any
of the Revolving Credit Notes, provided, however, that Agent shall not be deemed
to have knowledge of any item until such time as Agent's officers responsible
for administration of the Loans shall receive written notice thereof or have
actual knowledge of such event. If any Lender becomes aware of any Default or
Event of Default by Borrowers, it shall promptly notify Agent thereof provided,
however, that
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Lenders shall not be deemed to have knowledge of any item until such time as
Lenders' officers responsible for administration of the Loans shall receive
written notice thereof or have actual knowledge of such event.
Section 10.3 Acceptance of Appointment. The Agent hereby accepts its
appointment as Agent for each of the Lenders under this Agreement and the other
Loan Documents, but only on the terms set forth in this Agreement, including the
following:
(a) Agent makes no representation as to the value, validity or
enforceability of this Agreement or of any of the other Loan Documents or as to
the correctness of any statement contained in this Agreement or in any of the
other Loan Documents;
(b) Agent may exercise its powers and perform its duties under
this Agreement and the other Loan Documents either directly or through its
agents or attorneys;
(c) Agent shall be entitled to obtain from counsel selected by
it with reasonable care advice with respect to legal matters pertaining to this
Agreement, or any of the other Loan Documents and shall not be liable for any
action taken, omitted to be taken or suffered in good faith in accordance with
the advice of such counsel;
(d) Agent shall not be required to use its own funds in the
performance of any of its duties or in the exercise of any of its rights or
powers, and Agent shall not be obligated to take any action which, in its
reasonable judgment, would involve it in any expense or liability unless it
shall have been furnished security or indemnity in an amount and in form and
substance satisfactory to it; and
(e) Agent, in performing its duties and functions under this
Agreement and the other Loan Documents on behalf of the Lenders, will exercise
the same care which it normally exercises in making and handling loans in which
it alone is interested, but does not assume further responsibility.
Section 10.4 Collateral Matters.
(a) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any property covered by the Security Documents
(i) upon termination of the Credit Commitments and payment and satisfaction of
all Obligations; or (ii) constituting property being sold or disposed of if
Borrower certifies to Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and Agent may rely in good faith
conclusively on any such certificate, without further inquiry); or (iii)
constituting property leased to Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by Borrower to be, renewed or
extended. Upon request by Agent at any time, any Lender will confirm in writing
Agent's authority to release particular types or items of property covered by
the Security Documents pursuant to this Section 10.4(a).
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(b) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent's authority to act without any specific or further
authorization or consent by Requisite Lenders (as set forth in Section 10.4(a)),
each Lender agrees to confirm in writing, upon request by Borrower, the
authority to release any property covered by the Security Documents conferred
upon Agent under clauses (i) through (iii) of Section 10.4(a). So long as no
Event of Default is then continuing, upon receipt by Agent of confirmation from
the Requisite Lenders of its authority to release any particular item or types
of property covered by the Security Documents, and upon at least five (5)
Business Days prior written request by Borrower, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as may be necessary
to evidence the release of the Liens granted to Agent for the benefit of Lenders
herein or pursuant hereto upon such Collateral; provided, however, that (i)
Agent shall not be required to execute any such document on terms which, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of Borrower, in respect
of), all interests retained by Borrower, including (without limitation) the
proceeds of any sale, all of which shall continue to constitute part of the
property covered by the Security Documents.
(c) Absence of Duty. Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by the
Security Documents exists or is owned by Borrower or is cared for, protected or
insured or has been encumbered or that the Liens granted to Agent herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent in this Section 10.4 or in
any of the Loan Documents, it being understood and agreed that in respect of the
property covered by the Security Documents or any act, omission or event related
thereto, Agent may act in any manner it may deem appropriate, it its discretion,
given Agent's own interest in property covered by the Security Documents as one
of the Lenders and that Agent shall have no duty or liability whatsoever to any
of the other Lenders; provided that Agent shall exercise the same care which it
would in dealing with loans for its own account.
Section 10.5 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Lenders' security interest
in assets which, in accordance with Article 9 of the Uniform Commercial Code in
any applicable jurisdiction, can be perfected only by possession. Should any
Lender (other than Agent) obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent's request therefor, shall
deliver such Collateral to Agent or in accordance with Agent's instructions.
Each Lender agrees that it will not have any right individually to enforce or
seek to enforce any Security Document or to realize upon any collateral security
for the Loans, it being understood and agreed that such rights and remedies may
be exercised only by Agent.
Section 10.6 Application of Moneys. All moneys realized by the Agent
under the Loan Documents shall be held by Agent to apply in accordance with
Section 2.8(b) hereof.
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Section 10.7 Reliance by the Agent. Agent shall be entitled to rely on
any notice, consent, certificate, affidavit, letter, telegram, telecopy,
facsimile or teletype message, statement, order, instrument or other document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons. Agent shall deem and treat the payee of any Revolving
Credit Note as the absolute owner thereof for all purposes hereof until such
time as it receives actual notice of an assignment permitted hereunder of such
payee's interest, together with the written agreement of the assignee in form
and substance satisfactory to Agent that such assignee is bound by this
Agreement as a "Lender" hereunder.
Section 10.8 Exculpatory Provisions. Neither Agent nor any of its
shareholders, directors, officers, employees or agents shall be liable in any
manner to any of the Lenders for any action taken, omitted to be taken or
suffered in good faith by it or them under any of the Loan Documents or in
connection therewith, or be responsible for the consequences of any oversight or
error of judgment, except for losses due to gross negligence or willful
misconduct of such Agent, shareholder, director, officer, employee or agent.
Without limiting the generality of the foregoing sentence of this Section 10.8,
under no circumstances shall the Agent be subject to any liability to any Lender
on account of any action taken or omitted to be taken by such Agent in
compliance with the direction of the Requisite Lenders or all of the Lenders, as
the case may be as provided for hereunder.
Agent shall not be responsible in any manner to any of the Lenders for
the due execution, effectiveness, genuineness, validity or enforceability,
perfection or recording of this Agreement, any of the Revolving Credit Notes,
any of the other Loan Documents or for any certificate, report or other document
used under or in connection with this Agreement or any of the other Loan
Documents, or for the truth or accuracy of any recitals, statements, warranties
or representations contained herein or in any certificate, report or other
document at any time hereafter furnished or purporting to have been furnished to
it by or on behalf of a Borrower, or any other Person, or be under any
obligation to any of the Lenders to ascertain or inquire as to the performance
or observance by a Borrower, or any other Person of any of the covenants,
agreements or conditions set forth in this Agreement, the Revolving Credit Notes
or any of the other Loan Documents or as to the use of any moneys lent hereunder
or thereunder.
Agent shall not be obligated to take any action or refrain from taking
any action under any Loan Document that might, in its judgment, involve it in
any expense or liability until it shall have been indemnified to its
satisfaction by or received an agreement to indemnify from each Person which
such Agent reasonably believes may be an intended recipient of such
distribution. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
Section 10.9 Action by the Agent. Except as otherwise expressly
provided under this Agreement or in any other of the Loan Documents, Agent will
take such action, assert such rights and pursue such remedies under this
Agreement and the other Loan Documents as the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder shall direct. Except as
otherwise expressly provided in any of the Loan Documents, Agent will not (and
will not be
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obligated to) take any action, assert any rights or pursue any remedies under
this Agreement or any of the other Loan Documents in violation or contravention
of any express direction or instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. Agent may refuse (and
will not be obligated) to take any action, assert any rights or pursue any
remedies under this Agreement or any of the other Loan Documents without the
express written direction and instruction of the Requisite Lenders or all of the
Lenders, as the case may be as provided for hereunder. In the event Agent fails,
within a commercially reasonable time, to take such action, assert such rights,
or pursue such remedies as the Requisite Lenders or all of the Lenders, as the
case may be as provided for hereunder, direct, the Requisite Lenders or all of
the Lenders, as the case may be as provided for hereunder, shall have the right
to take such action, to assert such rights, or pursue such remedies on behalf of
all of the Lenders unless the terms hereof otherwise require the consent of all
the Lenders to the taking of such actions. All notices and other material
information required to be delivered by Borrower to Agent hereunder shall be
delivered within a reasonable time (and in any event not more than five (5)
days) after Agent's receipt of same by Agent to each Lender. No Lender (other
than the Agent, acting in its capacity as Agent) shall be entitled to take any
enforcement action of any kind under any of the Loan Documents, except as
expressly provided in this Agreement. Action that may be taken by Requisite
Lenders or all of the Lenders, as the case may be as provided for hereunder may
be taken pursuant to a vote at a meeting (which may be held by telephone
conference call) of all of the Lenders, or pursuant to the written consent of
such Lenders.
Section 10.10 Amendments, Waivers and Consents. Any provision of this
Agreement, the Revolving Credit Notes or the other Loan Documents may be amended
or waived upon the consent of the Requisite Lenders, and after such consent,
Agent, on behalf of the Lenders, may execute and deliver to Borrowers a written
instrument waiving or amending such provision; provided, however, that neither
this Agreement, the Revolving Credit Notes, nor any of the other Loan Documents
may be amended, waived or a variation therefrom or forbearance with respect to
such variation consented to without the written consent of the Agent and all of
Lenders which effect (i) a change in the Maximum Revolving Commitment; (ii) a
change in any Lender's Credit Commitment; (iii) a reduction in the interest
rates or reduction of the principal set forth in the Revolving Credit Notes;
(iv) the extension of the maturity date on the Notes or expiration date of any
Letter of Credit beyond the Termination Date; (v) a change in the payment
schedule or scheduled date for the payment of or amount of any interest or
principal; (vi) any change in Article 7; (vii) a change in this Section 10.10,
the definition of Requisite Lender or any provision of this Agreement which
requires consent or action of all the Lenders for action thereunder; (viii) a
change in the obligations and liabilities of Agent; (ix) a change which
increases the obligations of any Lender; or (x) a change in any fees or charges
hereunder or in Sections 2.12 or 11.6 hereof.
Section 10.11 Indemnification. Each Lender agrees to indemnify Agent
(to the extent Agent is not promptly reimbursed by Borrowers), in accordance
with its Participation Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, interests, actions, judgments and suits
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent relating to or arising out of this Agreement or any of
the other Loan Documents or relating to any action taken or omitted by such
Agent under this Agreement or any of the other Loan Documents, provided that no
Lender shall be liable for any portion of such liabilities, obligations,
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losses, damages, penalties, interest, actions, judgments or suits resulting from
Agent's own gross negligence or willful misconduct.
Section 10.12 Reimbursement of the Agent. Each Lender further agrees to
reimburse Agent, in accordance with its Participation Percentage, for any
reasonable out-of-pocket costs or expenses incurred by Agent in connection with
its duties under this Agreement (including, but not limited to, reasonable fees
and disbursements of counsel, travel and living expenses away from home of
employees or agents of the Agent and compensation of agents or of experts
employed by the Agent to render services for the Lenders hereunder), but only to
the extent such fees, disbursements, expenses and compensation have not been
promptly reimbursed to the Agent by Borrowers. If any such sums are reimbursed
to the Agent by Borrowers after one or more of the Lenders have reimbursed the
Agent for such sums, the Agent will refund such sums ratably to the Lenders who
contributed such sums.
Section 10.13 Sharing of Funds Received. Each Lender and Agent agrees
with Agent and each of the other Lenders that if such Lender shall receive from
a Borrower or any other Person or Persons, whether by payment received otherwise
than in accordance with the terms of the Loan Documents, exercise of the right
of set-off, counterclaim, cross-claim, enforcement of any claim, or proceedings
against any Borrower or any other Person or Persons, proof of claim in
bankruptcy, reorganization, liquidation, receivership or other similar
proceedings, or otherwise, and shall retain and apply to the payment of any of
the Obligations owing to such Lender any amount in excess of its Pro Rata Share
of the payments received by all of the Lenders and the Agent in respect of all
of the Obligations, such Lender will promptly make such dispositions and
arrangements with the other Lenders and the Agent with respect to such excess,
either by way of distribution, pro tanto assignment of claim, subrogation or
otherwise, as shall result in each of the Lenders receiving in respect of the
Obligations owing to it, its Pro Rata Share of such payments.
Section 10.14 Dealing with Lenders. Agent may at all times deal solely
with the several Lenders for all purposes of this Agreement and the protection,
enforcement and collection of the Revolving Credit Notes, including, without
limitation, the acceptance and reliance upon any certificate, consent or other
document executed on behalf of one or more of the Lenders and the division of
payments pursuant to Sections 2.6, 2.7, 2.8, 10.6, and 10.14 hereof. The Agent
shall not have a fiduciary relationship in respect of any Lender by reason of
this Agreement. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action hereunder except any action
specifically provided by this Agreement to be taken by the Agent.
Section 10.15 Agent as Lender. Provident shall have, in its capacity as
a Lender under the Loan Documents, the same obligations and the same rights,
remedies, powers and privileges under this Agreement and the other Loan
Documents as it would have were it not also an Agent.
Section 10.16 Duties Not to be Increased. The duties and liabilities of
Agent under this Agreement and the other Loan Documents shall not be increased
or otherwise changed without its express prior written consent. The Agent shall
have no duty to provide information to the Lenders except as expressly set forth
herein.
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Section 10.17 Lender Credit Decisions. Each Lender acknowledges that it
has, independently of and without reliance upon Agent or any of the other
Lenders, made its own credit analysis and decision to enter into this Agreement
and the other Loan Documents to which it is a party. Each Lender also
acknowledges that it will, independently of and without reliance upon Agent or
any of the other Lenders, continue to make its own credit decisions in taking or
not taking action under this Agreement or any of the other Loan Documents and in
determining the compliance or lack thereof by any Borrower and any other Person
with any provision of any Loan Document or other document or agreement.
Section 10.18 Resignation of Agent. Provident and any successor Agent
may resign as such at any time by giving thirty (30) days' prior written notice
of resignation to each Lender and the Borrowers, such resignation to be
effective on the date which is specified in such notice. Upon any such
resignation by Provident as Agent, or in the event the office of Agent shall
thereafter become vacant for any other reason, the Requisite Lenders shall
appoint a successor Agent, by an instrument in writing signed by such Lenders
and delivered to such successor Agent and the Borrowers whereupon, such
successor Agent shall succeed to all of the rights and obligations of the
retiring Agent as if originally named. The retiring Agent shall duly assign,
transfer and deliver to such successor Agent all moneys at the time held by the
retiring Agent hereunder after deducting therefrom its expenses for which it is
entitled to be reimbursed. Upon such succession of any such successor Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder,
except for its gross negligence or willful misconduct arising prior to its
retirement or removal hereunder. After any Agent's resignation, the provisions
of this Article 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 10.19 Assignment of Revolving Credit Notes; Participation.
(a) Each Lender may, with concurrent notice to Agent, assign
all or a portion of its rights and obligations under this Credit Agreement and
the Revolving Credit Notes; provided that (i) for each such assignment, the
parties thereto shall execute and deliver to an assignment and assumption
agreement, in form and substance acceptable to Agent, together with any
Revolving Credit Notes subject to such assignment; (ii) no such assignment shall
reduce the assigning Lender's Credit Commitment to less that Fifty-One Percent
(51%) of such Lender's original Credit Commitment without the consent of Agent;
and (iii) no such assignment shall be for less than Five Million Dollars
($5,000,000) of the aggregate of the Lender's Credit Commitment, unless such
assignment is to a then-current holder of a Revolving Credit Note. Upon such
execution and delivery of such assignment and assumption agreement to Agent,
substantially in the form of Exhibit I hereto, from and after the date specified
as the effective date in such Agreement (the "Acceptance Date"), (x) the
assignee thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such agreement, such
assignee shall have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such agreement, relinquish its rights
(other than any rights it may have pursuant to Section 11.6 which will survive)
and be released from its obligations under this Agreement (and, in the case of
an assignment covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
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(b) Each Lender may sell participations of up to forty-nine
percent (49%) of its rights and obligations under the Loan Documents (including,
without limitation, up to such portion of its Credit Commitment, the Loans owing
to it and the Revolving Credit Note held by it); provided, however, that (i)
such Lenders' obligations under the Loan Documents (including, without
limitation, its Credit Commitment to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Revolving Credit Note for all purposes of the Loan
Documents, (iv) the participating banks or other entities shall be entitled to
the cost protection provisions of Sections 2.12 and 11.6 hereof, but a
participant shall not be entitled to receive pursuant to such provisions an
amount larger than its share of the amount to which the Lender granting such
participation would have been entitled, (v) the Borrowers, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents,
and (vi) no such transfer shall include the transfer of any of such Lender's
rights to grant consents or approve amendments or modifications to the Loan
Documents except with respect to those items requiring the action of or consent
by all of the Lenders or affecting the rights and obligations of Agent. It is
understood and agreed that each Lender may share any and all information
received by it from or on behalf of the Borrowers pursuant to this Agreement or
any of the other Loan Documents with any participant or prospective participant
of such Lender.
ARTICLE 11
PROVISIONS OF GENERAL APPLICATION
Section 11.1 Term of Agreement. This Agreement shall continue in full
force and effect and the duties, covenants, and liabilities of Borrowers
hereunder and all the terms, conditions, and provisions hereof relating thereto
shall continue to be fully operative until all Obligations to Agent and each
Lender have been satisfied in full.
Section 11.2 Notices.
(a) All notices and other communications pursuant to this
Agreement shall be in writing, either delivered in hand or sent by first-class
mail, postage prepaid, or sent by telex, telecopier, facsimile transmission or
telegraph, addressed as follows:
(i) If to Borrowers, at:
Romacorp, Inc.
9304 Forest Lane, Suite 200
Dallas, Texas 75243
Attn: David Short
Fax Number: (214) 343-9203
with copies to:
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Sentinel Capital Partners
777 Third Avenue, 32 Floor
New York, New York 10017
Fax Number: (212) 688-6513
and
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022
Attn: Frederick Tanne
Fax Number: (212) 446-4900
(ii) If to Agent, at:
The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202
Attn: Nick Jevic
Fax Number: (513) 579-2858
with a copy to:
Keating, Muething & Klekamp, P.L.L.
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attn: J. David Rosenberg
Fax Number: (513) 579-6457
(iii) If to a Lender, at such address set forth on
Schedule 1;
or to such other addresses or by way of such telex and other numbers as any
party hereto shall have designated in a written notice to the other parties
hereto.
(b) Except as otherwise expressly provided herein, any notice
or other communication pursuant to this Agreement or any other Loan Document
shall be deemed to have been duly given or made and to have become effective
when delivered in hand to the party to which it is directed, or, if sent by
first-class mail, postage prepaid, or by telex, telecopier, facsimile
transmission or telegraph, and properly addressed in accordance with Section
11.2(a), (i) when received by the addressee; or (ii) if sent by first class
mail, postage prepaid, on the third (3rd) Business Day following the day of the
dispatch thereof, whichever of (i) or (ii) shall be the earlier.
Section 11.3 Survival of Representations. All representations and
warranties made by or on behalf of each Borrower in this Agreement, or any of
the other Loan Documents shall be deemed
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to have been relied upon by Agent and each Lender notwithstanding any
investigation made by Agent or any Lender and shall survive the making of each
of the Loans.
Section 11.4 Power of Attorney. Each Borrower acknowledge and agree
that their appointments of Agent as their attorney and agent-in-fact for the
purposes specified in this Agreement is an appointment coupled with an interest
and shall be irrevocable until all of the Obligations are satisfied and this
Agreement is terminated.
Section 11.5 Amendments. Each of the Loan Documents may be modified,
amended or supplemented in any respect whatever, only with the prior written
consent or approval of Agent and the Requisite Lenders or all of the Lenders (as
the case may be) and each other Person (other than a Lender) which is a party to
such Loan Document, all in accordance with the terms of Section 10.10 hereof.
Section 11.6 Costs, Expenses, Taxes and Indemnification.
(a) Borrowers absolutely and unconditionally agree to pay to
the Agent, for the respective pro rata account of the Agent and each Lender,
upon demand by Agent or any Lender at any time and as often as the occasion
therefor may require, whether or not all or any of the transactions contemplated
by any of the Loan Documents are ultimately consummated (i) all reasonable
out-of-pocket costs and expenses which shall at any time be incurred or
sustained by Agent or any of its directors, officers, employees or agents as a
consequence of, on account of, in relation to or any way in connection with the
preparation, negotiation, execution and delivery of the Loan Documents and the
perfection and continuation of the rights of the Lenders and Agent in connection
with the Loans, as well as the preparation, negotiation, execution, or delivery
or in connection with the amendment or modification of any of the Loan Documents
or as a consequence of, on account of, in relation to or any way in connection
with the granting by Agent or any of the Lenders of any consents, approvals or
waivers under any of the Loan Documents including, but not limited to,
reasonable attorneys' fees and disbursements; (ii) all reasonable out-of-pocket
costs and expenses which shall be incurred or sustained by Agent or any of the
Lenders or any of their directors, officers, employees or agents as a
consequence of, on account of, in relation to or any way in connection with the
exercise, protection or enforcement (whether or not suit is instituted) any of
its rights, remedies, powers or privileges under any of the Loan Documents or in
connection with any litigation, proceeding or dispute in any respect related to
any of the relationships under, or any of the Loan Documents (including, but not
limited to, all of the reasonable fees and disbursements of consultants, legal
advisers, accountants, experts and agents for Agent or any of the Lenders, the
reasonable travel and living expenses away from home of employees, consultants,
experts or agents of Agent or any of the Lenders, and the reasonable fees of
agents, consultants and experts not in the full-time employ of Agent or any of
the Lenders for services rendered on behalf of Agent or any of the Lenders); and
(iii) Upon the failure of Borrowers to provide or cause to be provided the
insurance required under Section 6.2(b), Agent, on behalf of the Lenders, shall
have the option to procure and maintain such insurance without notice to
Borrowers.
(b) Borrowers shall absolutely and unconditionally indemnify
and hold harmless Agent and each Lender against any and all claims, demands,
suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses and all other liabilities
- 72 -
<PAGE> 81
whatsoever which shall at any time or times be incurred or sustained by Agent or
any Lender or by any of their shareholders, directors, officers, employees,
subsidiaries, Affiliates or agents on account of, or in relation to, or in any
way in connection with, any of the arrangements or transactions contemplated by,
associated with or ancillary to this Agreement or any of the other Loan
Documents, whether or not all or any of the transactions contemplated by,
associated with or ancillary to this Agreement, or any of such Loan Documents
are ultimately consummated.
(c) Borrowers hereby covenant and agree that any sums expended
by Agent or any Lender which Agent or any Lender is entitled to be reimbursed
for pursuant to this Section 11.6, shall be immediately due and payable upon
demand by Agent or any Lender, and shall bear interest at the Default Interest
Rate applicable to Term Lease from the date Agent or any such Lender incurred
such expense until the date such payment is made in full to Agent or such
Lender.
Section 11.7 Language. All notices, applications, certificates,
reports, financial statements and other financial information, correspondence
and all other communications from any Borrower to Agent or any Lender pursuant
to this Agreement or any of the other Loan Documents shall be in the English
language or shall be accompanied by an English translation thereof completely
satisfactory to Agent or such Lender.
Section 11.8 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors in title and assigns; provided, however, that (i) no Borrower may
assign or delegate any of its rights or obligations hereunder to any Person or
Persons without the express prior written consent of the Agent and all of the
Lenders; and (ii) no Lender may assign or delegate its rights or obligation
hereunder to any Person or Persons except in accordance with Section 10.19
hereof.
Section 11.9 Governing Law; Jurisdiction and Venue. ANY DISPUTE BETWEEN
ANY BORROWERS AND THE AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED
OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE INTERNAL LAWS
AND STATUTES OF LIMITATION (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
The Agent, each Lender and each Borrower hereby designate all courts of
record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Agreement, the
Revolving Credit Notes, Loan Documents, or the transactions contemplated by this
Agreement shall be prosecuted as to all parties, their successors and assigns,
and by the foregoing designations the Agent, each Lender, and each Borrower
consents to the jurisdiction and venue of such courts. In the event such
litigation is commenced, each Borrower agrees that service of process may be
made and personal jurisdiction over each Borrower obtained by service of a copy
of the summons, complaint and other pleadings required to commence such
litigation upon Borrower's appointed Agent for Service of Process in the State
of Ohio, which the undersigned hereof designates to be: CT Corporation Systems,
Cincinnati, Ohio. Each
- 73 -
<PAGE> 82
Borrower recognizes and agrees that the agency has been created for the benefit
of each Borrower, Agent and each Lender and agree that this agency shall not be
revoked, withdrawn, or modified without the consent of the Agent.
Section 11.10 Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR THE LENDERS TO EXTEND CREDIT TO EACH BORROWER, AND AFTER HAVING
THE OPPORTUNITY TO CONSULT COUNSEL, EACH BORROWER HEREBY EXPRESSLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT
OR ARISING IN ANY WAY FROM THE OBLIGATIONS.
Section 11.11 Waivers. Each Borrower waives notice of nonpayment,
demand, notice of demand, presentment, protest and notice of protest with
respect to the Obligations, or notice of acceptance hereof, notice of the Loans
made, issued, credit extended, or any other action taken in reliance hereon, and
all other demands and notices of any description, except such as are expressly
provided for herein.
Section 11.12 Interpretation and Proof of Loan Documents. Whenever
possible, the provisions of each Loan Document will be construed in such a
manner as to be consistent with this Agreement and each other Loan Document. If
any of the provisions of any Loan Document are inconsistent with this Agreement,
such provisions of this Agreement will supersede such provisions of such Loan
Document. This Agreement, the Loan Documents and all documents relating hereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by the Agent or any Lender at the
closing or otherwise, and (c) financial statements, certificates and other
information previously or hereafter furnished to the Agent or any Lender, may be
reproduced by the Agent or such Lender by an photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and the
Agent or such Lender may destroy any original document so reproduced. The
Borrowers agree and stipulate that 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 the Agent of such Lender in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 11.13 Integration of Schedules and Exhibits. The Exhibits and
Schedules annexed to this Agreement are an integral part of this Agreement and
are incorporated herein by reference.
Section 11.14 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
Section 11.15 Counterparts. This Agreement may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart hereof signed by each of the
parties hereto.
- 74 -
<PAGE> 83
Section 11.16 Severability. Any provision of this Agreement which is
prohibited and 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.17 One General Obligation. All Loans and advances by Lenders
to Borrowers under this Agreement constitute one loan, and all Obligations of
Borrowers to Agent and the Lenders under this Agreement constitute one general
obligation. It is expressly understood and agreed that all of the rights of
Agent and each Lender contained in this Agreement shall likewise apply insofar
as applicable to any modification of or supplement to this Agreement.
[Remainder of page intentionally left blank. Signature page follows.]
- 75 -
<PAGE> 84
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by or on behalf of each of the parties as of the day and in the year first above
written in Cincinnati, Ohio.
SIGNED IN THE PRESENCE OF: Borrower:
ROMACORP OPERATING COMPANY, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMACORP, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA SYSTEMS, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA FRANCHISE CORPORATION
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
<PAGE> 85
ROMA HOLDINGS, INC.
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
ROMA DINING LP
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
_______________________________ By:_________________________________
Name:_______________________________
_______________________________ Title:______________________________
THE LENDERS:
THE PROVIDENT BANK
_______________________________ By:_________________________________
Name: Nick Jevic
_______________________________ Title: Vice President
AGENT:
THE PROVIDENT BANK, as Agent
_______________________________ By:_________________________________
Name: Nick Jevic
_______________________________ Title: Vice President
<PAGE> 86
SCHEDULE 1
CREDIT PARTICIPATION
LENDER COMMITMENT PERCENTAGE
THE PROVIDENT BANK Revolving Credit Loan
One East Fourth Street
7th Floor $ 100%
Cincinnati, Ohio 45202
(513) 579-2337
<PAGE> 87
EXHIBITS
Exhibit A Form of Grant of Security Interest in Patents
Exhibit B Form of Grant of Security Interest in Trademarks
Exhibit C Form of Blocked Account Agreement
Exhibit D Form of Compliance Certificate
Exhibit E Form of Fee Mortgage
Exhibit F-1 Form of Pledge Agreement (Stock)
Exhibit F-2 Form of Pledge Agreement (Partnership Interests)
Exhibit G Form of Revolving Credit Promissory Note
Exhibit H Form of Borrower's Counsel Opinion Letter
Exhibit I Form of Lender Assignment and Assumption Agreement
Exhibit J Form of Notice of Election to Convert or Continue a Libor Rate
Loan
Exhibit K Form of Assignment of Franchise Rights and Agreements
Exhibit L Form of Collateral Assignment of Transitional Financial and
Accounting Services Agreement
<PAGE> 1
Exhibit 12.1
------------
ROMACORP, INC.
STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
-------------------------------------------------------------- -----------------
THIRTEEN THIRTEEN
WEEKS YEAR WEEKS
YEAR ENDED ENDED ENDED ENDED
----------------------------------------------------------------------------------
June 28, June 28,
1994 1995 1996(1) 1997 1998 1998 1998 1998
----------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income before taxes 494 2,894 896 5,493 6,480 2,225 (1,268) 348
Capitalized interest 75 339 332 14 332 14
----------------------------------------------------------------------------------
Subtotal 494 2,894 971 5,832 6,812 2,239 (936) 362
FIXED CHARGES
Interest charges 454 335 876 1,550 2,412 663 9,860 2.465
Capitalized interest - - 75 339 332 14 332 14
Interest factor of operating rents 807 858 1,003 1,137 1,293 326 1,293 326
----------------------------------------------------------------------------------
Total fixed charges 1,261 1,193 1,954 3,026 4,037 1,003 11,485 2,805
EARNINGS, AS ADJUSTED 1,755 4,087 2,925 8,858 10,849 3,242 10,549 2,887
RATIO OF EARNINGS TO FIXED CHARGES 1.39x 3.43x 1.50x 2.93x 2.69x 3.23x 0.92x 1.13x
</TABLE>
(1) Absent the $3.5 million charge recorded during fiscal 1996, the ratio of
earnings to fixed charges would have been 3.3x.
<PAGE> 1
Exhibit 21.1
SUBSIDIARIES OF ROMACORP, INC.
Roma Ribs, Ltd.
Roma Franchise Corporation
Roma Fort Worth, Inc.
Roma Holdings, Inc.
Roma Systems, Inc.
Roma Bar Management Corporation
Roma Huntington Beach, Inc.
Roma Dining LP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Prospectus Summary
- -- Summary Historical and Unaudited Pro Forma and Operating Data," "Selected
Historical Financial Data" and "Experts" and to the use of our report dated
April 30, 1998, in the Registration Statement (Form S-4) and related Prospectus
of Romacorp, Inc. for the registration of $75,000,000 of 12% Senior Notes due
2006.
Ernst & Young LLP
Kansas City, Missouri
August 26, 1998
<PAGE> 1
EXHIBIT 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
=====================
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
=====================
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
NEW YORK 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036-1532
(Address of principal (Zip Code)
executive offices)
NONE
(Name, address and telephone number of agent for service)
========================
ROMACORP, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-4010466
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
9304 FOREST LANE
SUITE 200
DALLAS, TEXAS 75243
(Address of principal executive offices) (Zip Code)
$75,000,000 SENIOR NOTES DUE 2006, SERIES A
(Title of the indenture securities)
<PAGE> 2
- 2 -
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
The obligor is currently not in default under any of its outstanding
securities for which United States Trust Company of New York is Trustee.
Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and
15 of Form T-1 are not required under General Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the
State of New York Banking Department to transact
business as a Trust Company, is incorporated by
reference to Exhibit T-1.1 to Form T-1 filed on
September 15, 1995 with the Commission pursuant to
the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990 (Registration No.
33-97056).
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
<PAGE> 3
- 3 -
16. List of Exhibits
(cont'd)
T-1.4 -- The By-Laws of United States Trust Company of New York, as
amended, is incorporated by reference to Exhibit T-1.4 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of
the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
As of August 20, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States Trust
Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 20th of
August 1998.
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By:____________________________
Gerard F. Ganey
Senior Vice President
<PAGE> 4
EXHIBIT T-1.6
The consent of the trustee required by Section 321(b) of the Act.
UNITED STATES TRUST COMPANY OF NEW YORK
114 WEST 47TH STREET
NEW YORK, NY 10036
August 20, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
_______________________________
By: /S/Gerard F. Ganey
Senior Vice President
<PAGE> 5
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
JUNE 30, 1998
($ IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
Cash and Due from Banks $ 99,322
Short-Term Investments 171,315
Securities, Available for Sale 626,426
Loans 1,857,795
Less: Allowance for Credit Losses 16,708
----------
Net Loans 1,841,087
Premises and Equipment 59,304
Other Assets 122,476
----------
Total Assets $2,919,930
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 648,072
Interest Bearing 1,646,049
----------
Total Deposits 2,294,121
Short-Term Credit Facilities 306,807
Accounts Payable and Accrued Liabilities 144,419
----------
Total Liabilities $2,745,347
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 49,541
Retained Earnings 107,703
Unrealized Gains on Securities
Available for Sale (Net of Taxes) 2,344
----------
Total Stockholder's Equity 174,583
----------
Total Liabilities and
Stockholder's Equity $2,919,930
==========
</TABLE>
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
July 31, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001067457
<NAME> ROMACORP, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-24-1996
<PERIOD-START> MAR-27-1995
<PERIOD-END> MAR-24-1996
<CASH> 352
<SECURITIES> 0
<RECEIVABLES> 848
<ALLOWANCES> 0
<INVENTORY> 2,029
<CURRENT-ASSETS> 4,789
<PP&E> 52,082
<DEPRECIATION> 0
<TOTAL-ASSETS> 74,676
<CURRENT-LIABILITIES> 5,507
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 29,497
<TOTAL-LIABILITY-AND-EQUITY> 74,676
<SALES> 51,499
<TOTAL-REVENUES> 59,069
<CGS> 17,541
<TOTAL-COSTS> 46,634
<OTHER-EXPENSES> 257
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 876
<INCOME-PRETAX> 876
<INCOME-TAX> 545
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 351
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001067457
<NAME> ROMACORP, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-23-1997
<PERIOD-START> MAR-25-1996
<PERIOD-END> MAR-23-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,473
<ALLOWANCES> 0
<INVENTORY> 661
<CURRENT-ASSETS> 4,183
<PP&E> 46,516
<DEPRECIATION> 0
<TOTAL-ASSETS> 68,724
<CURRENT-LIABILITIES> 5,866
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 27,137
<TOTAL-LIABILITY-AND-EQUITY> 68,724
<SALES> 68,778
<TOTAL-REVENUES> 77,304
<CGS> 22,921
<TOTAL-COSTS> 61,027
<OTHER-EXPENSES> (42)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,550
<INCOME-PRETAX> 5,493
<INCOME-TAX> 2,017
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,476
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001067457
<NAME> ROMACORP, INC
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-29-1998
<PERIOD-START> MAR-24-1997
<PERIOD-END> MAR-29-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,351
<ALLOWANCES> 0
<INVENTORY> 1,509
<CURRENT-ASSETS> 4,514
<PP&E> 52,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 74,747
<CURRENT-LIABILITIES> 6,339
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 31,292
<TOTAL-LIABILITY-AND-EQUITY> 74,747
<SALES> 86,408
<TOTAL-REVENUES> 94,890
<CGS> 29,011
<TOTAL-COSTS> 76,743
<OTHER-EXPENSES> (9)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,412
<INCOME-PRETAX> 6,480
<INCOME-TAX> 2,315
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,165
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001067457
<NAME> ROMACORP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1998
<PERIOD-START> MAR-24-1997
<PERIOD-END> JUN-22-1997
<CASH> 529
<SECURITIES> 0
<RECEIVABLES> 1,689
<ALLOWANCES> 0
<INVENTORY> 910
<CURRENT-ASSETS> 5,985
<PP&E> 49,870
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,072
<CURRENT-LIABILITIES> 11,347
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 27,992
<TOTAL-LIABILITY-AND-EQUITY> 72,072
<SALES> 20,225
<TOTAL-REVENUES> 22,275
<CGS> 6,584
<TOTAL-COSTS> 17,851
<OTHER-EXPENSES> 21
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 476
<INCOME-PRETAX> 1,623
<INCOME-TAX> 568
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,055
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001067457
<NAME> ROMACORP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-28-1998
<PERIOD-START> MAR-30-1998
<PERIOD-END> JUN-28-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,386
<ALLOWANCES> 0
<INVENTORY> 2,127
<CURRENT-ASSETS> 5,111
<PP&E> 53,294
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,776
<CURRENT-LIABILITIES> 6,440
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 32,738
<TOTAL-LIABILITY-AND-EQUITY> 75,776
<SALES> 22,513
<TOTAL-REVENUES> 24,627
<CGS> 7,833
<TOTAL-COSTS> 19,712
<OTHER-EXPENSES> (194)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 663
<INCOME-PRETAX> 2,225
<INCOME-TAX> 779
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,446
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
12% SENIOR NOTES DUE 2006
OF
ROMACORP, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998 UNLESS EXTENDED
(THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to the Exchange Agent:
<TABLE>
<S> <C> <C>
By Overnight Courier: By Hand: By Registered or Certified Mail:
United States Trust Company United States Trust Company United States Trust Company
of New York of New York of New York
770 Broadway, 13th Floor 111 Broadway P.O. Box 844
New York, New York 10003 Lower Level Cooper Station
Attn: Corporate Trust Services New York, New York 10006 New York, New York 10276-0844
Attn: Corporate Trust Services Attn: Corporate Trust Services
</TABLE>
By Facsimile:
212-780-0592
Attn: Corporate Trust Services
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
800-548-6565 OR BY FACSIMILE AT 212-780-0592.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1998 (the "Prospectus") of Romacorp, Inc., a Delaware corporation
(the "Issuer"), and this Letter of Transmittal (the "Letter of Transmittal"),
that together constitute the Issuer's offer (the "Exchange Offer") to exchange
$1,000 in principal amount of its 12% Senior Notes due 2006 (the "Exchange
Notes"), which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement, for each $1,000 in
principal amount of its outstanding 12% Senior Notes due 2006 (the "Notes"), of
which $75,000,000 aggregate principal amount is outstanding. Capitalized terms
used but not defined herein have the meanings ascribed to them in the
Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial Owners")
a duly completed and executed form of "Instruction to Registered Holder and/or
Book-Entry Transfer Facility Participant from Beneficial Owner" accompanying
this Letter of Transmittal, instructing the undersigned to take the action
described in this Letter of Transmittal.
<PAGE> 2
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns, and transfers to, or upon the
order of, the Issuer, all right, title, and interest in, to, and under the
Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as appropriate)
to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver the Tendered Notes to the Issuer or cause ownership of the Tendered
Notes to be transferred to, or upon the order of, the Issuer, on the books of
the registrar for the Notes and deliver all accompanying evidences of transfer
and authenticity to, or upon the order of, the Issuer upon receipt by the
Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the
undersigned is entitled upon acceptance by the Issuer of the Tendered Notes
pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise
exercise all rights of beneficial ownership of the Tendered Notes, all in
accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer-Withdrawal of
Tenders." All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any Beneficial Owner(s), and
every obligation of the undersigned or any Beneficial Owners hereunder shall be
binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the Tendered
Notes and that the Issuer will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges, encumbrances, and adverse claims
when the Tendered Notes are acquired by the Issuer as contemplated herein. The
undersigned and each Beneficial Owner will, upon request, execute and deliver
any additional documents reasonably requested by the Issuer or the Exchange
Agent as necessary or desirable to complete and give effect to the transactions
contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired by
the undersigned and any Beneficial Owner(s) in the ordinary course of business
of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each
Beneficial Owner are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Issuer, and
(iv) the undersigned and each Beneficial Owner acknowledge and agree that any
person participating in the Exchange Offer with the intention or for the purpose
of distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), in connection with a secondary resale of the Exchange Notes acquired by
such person and cannot rely on the position of the Staff of the Securities and
Exchange Commission (the "Commission") set forth in the no-action letters that
are discussed in the section of the Prospectus entitled "The Exchange Offer." In
addition, by accepting the Exchange Offer, the undersigned hereby (i) represents
and warrants that, if the undersigned or any Beneficial Owner of the Notes is a
Participating Broker-Dealer, such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other trading
activities and has not entered into any arrangement or understanding with the
Company or any affiliate of the Company (within the meaning of Rule 405 under
the Securities Act) to distribute the New Notes to be received in the Exchange
Offer, and (ii) acknowledges that, by receiving New Notes for its own account in
exchange for Notes, where such Notes were acquired as a result of market-making
activities or other trading activities, such Participating
2
<PAGE> 3
Broker-Dealer will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"Use of Guaranteed Delivery" BELOW (Box 4).
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE "Use of Book-Entry Transfer" BELOW (Box 5).
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
BOX 1
DESCRIPTION OF NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED NOTE HOLDER(S), CERTIFICATE PRINCIPAL AMOUNT AGGREGATE
EXACTLY AS NAME(S) APPEAR(S) ON NOTE CERTIFICATE(S) NUMBER(S) OF REPRESENTED BY PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED**
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
TOTAL
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Notes. All
other tenders must be in integral multiples of $1,000 of principal
amount. Unless otherwise indicated in this column, the principal amount
of all Note Certificates identified in this Box 1 or delivered to the
Exchange Agent herewith shall be deemed tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------------------
BOX 2
BENEFICIAL OWNER(S)
- -------------------------------------------------------------------------------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES
BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED NOTES
ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE UNDERSIGNED AT
AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Tax Identification or
Social Security No.:
BOX 4
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-ENTRY
TRANSFER.
Name of Tendering Institution:
Account Number:
Transaction Code Number:
4
<PAGE> 5
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
X Signature Guarantee
- ----------------------------------------------- (If required by Instruction 5)
X
- ----------------------------------------------- Authorized Signature
(SIGNATURE OF REGISTERED X
HOLDER(S) OR AUTHORIZED SIGNATORY) -----------------------------------------------
Note: The above lines must be signed by the
registered holder(s) of Notes as their name(s) Name:
appear(s) on the Notes or by persons(s) -----------------------------------------------
authorized to become registered holder(s) (PLEASE PRINT)
(evidence of which authorization must be
transmitted with this Letter of Transmittal). Title:
If signature is by a trustee, executor, -----------------------------------------------
administrator, guardian, attorney-in-fact,
officer, or other person acting in a fiduciary Name of Firm:
or representative capacity, such person must -----------------------------------------
set forth his or her full title below. See (MUST BE AN ELIGIBLE INSTITUTION AS DEFINED IN
Instruction 5. INSTRUCTION 2)
Name(s): Address:
- ---------------------------------------------- -----------------------------------------------
- ----------------------------------------------- -----------------------------------------------
-----------------------------------------------
Capacity: (INCLUDE ZIP CODE)
- -----------------------------------------------
- ----------------------------------------------- Area Code and Telephone Number:
-----------------------------------------------
Street Address:
- ---------------------------------------- Dated:
- ----------------------------------------------- -----------------------------------------------
- -----------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- -----------------------------------------------
Tax Identification or Social Security Number:
- -----------------------------------------------
</TABLE>
BOX 7
BROKER-DEALER STATUS
- --------------------------------------------------------------------------------
[ ] Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for
its own account as a result of market-making activities or other trading
activities.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: ROMACORP, INC.
- ----------------------------------------------------------------------------------------------------------------------------
Name (if joint names, list first and circle the name of the person or entity whose
number you enter in Part 1 below. See instructions if your name has changed.)
-----------------------------------------------------------------------------------------
Address
-----------------------------------------------------------------------------------------
SUBSTITUTE City, State and ZIP Code
-----------------------------------------------------------------------------------------
FORM W-9 List account number(s) here (optional)
-----------------------------------------------------------------------------------------
DEPARTMENT OF THE PART 1 -- PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION Social Security
TREASURY NUMBER ("TIN") IN THE BOX AT RIGHT AND CERTIFY BY Number or TIN
SIGNING AND DATING BELOW
INTERNAL REVENUE SERVICE
-----------------------------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have
not been notified that you are subject to backup withholding as a result of failure to
report all interest or dividends or (2) the Internal Revenue Service has notified you
that you are no longer subject to backup withholding. [ ]
- ----------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I PART 3 --
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE. Awaiting TIN [ ]
SIGNATURE ------------------------ DATE--------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
6
<PAGE> 7
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute Form
W-9, and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant to
the procedures for book-entry transfer described in the Prospectus under the
caption "Exchange Offer -- Book-Entry Transfer" (and a confirmation of such
transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New
York City time, on the Expiration Date. The method of delivery of certificates
for Tendered Notes, this Letter of Transmittal and all other required documents
to the Exchange Agent is at the election and risk of the tendering holder and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is recommended
that the Holder use an overnight or hand delivery service. In all cases,
sufficient time should be allowed to assure timely delivery. No Letter of
Transmittal or Notes should be sent to the Company. Neither the Issuer nor the
registrar is under any obligation to notify any tendering holder of the Issuer's
acceptance of Tendered Notes prior to the closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Notes according to
the guaranteed delivery procedures set forth below, including completion of Box
4. Pursuant to such procedures: (i) such tender must be made by or through a
firm which is a member of a recognized Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution") and the Notice
of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by mail or hand delivery) setting forth the name and address of the
holder, the certificate number(s) of the Tendered Notes and the principal amount
of Tendered Notes, stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading days after the
Expiration Date, this Letter of Transmittal together with the certificate(s)
representing the Notes and any other required documents will be deposited by the
Eligible Institution with the Exchange Agent; and (iii) such properly completed
and executed Letter of Transmittal, as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all Tendered
Notes in proper form for transfer, must be received by the Exchange Agent within
five New York Stock Exchange trading days after the Expiration Date. Any holder
who wishes to tender Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery relating to such Notes prior to 5:00 p.m., New York City
time, on the Expiration Date. Failure to complete the guaranteed delivery
procedures outlined above will not, of itself, affect the validity or effect a
revocation of any Letter of Transmittal form properly completed and executed by
an Eligible Holder who attempted to use the guaranteed delivery process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may execute
and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes
who is not the registered holder must arrange promptly with the registered
holder to execute and deliver this Letter of Transmittal on his or her behalf
through the execution and delivery to the registered holder of the Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner form accompanying this Letter of Transmittal.
4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should fill
in the principal amount tendered in the column labeled "Aggregate Principal
Amount Tendered" of the box entitled "Description of Notes Tendered" (Box 1)
above. The entire principal amount of Notes delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Notes held by the holder is not tendered, then Notes for
the principal amount of Notes not tendered and Exchange Notes issued in exchange
7
<PAGE> 8
for any Notes tendered and accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, as soon as practicable following the
Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names, it will be necessary to complete, sign and
submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued
(and any untendered principal amount of Notes is to be reissued) in the name of
the registered holder(s), then such registered holder(s) need not and should not
endorse any Tendered Notes, nor provide a separate bond power. In any other
case, such registered holder(s) must either properly endorse the Tendered Notes
or transmit a properly completed separate bond power with this Letter of
Transmittal, with the signature(s) on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be endorsed
or accompanied by appropriate bond powers, in each case, signed as the name(s)
of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Issuer, evidence satisfactory to the Issuer of their authority to so act must be
submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in
the applicable box (Box 3), the name and address to which the Exchange Notes
and/or substitute Notes for principal amounts not tendered or not accepted for
exchange are to be sent, if different from the name and address of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the taxpayer identification or social security number of the person named must
also be indicated.
7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Tendered Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Tendered Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or on any
other person) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Notes listed in this Letter of
Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
holder(s) of any Tendered Notes which are accepted for exchange must provide the
Issuer (as payor) with its correct taxpayer identification number ("TIN"),
which, in the case of a holder who is an individual, is his or her social
security number. If the Issuer is not provided with the correct TIN, the Holder
may be subject to backup withholding and a $50 penalty imposed by the Internal
Revenue Service. (If withholding results in an over-payment of taxes, a refund
may be obtained.) Certain holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting
8
<PAGE> 9
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
To prevent backup withholding, each holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
failure to report all interest or dividends or (ii) the Internal Revenue Service
has notified the holder that such holder is no longer subject to backup
withholding. If the Tendered Notes are registered in more than one name or are
not in the name of the actual owner, consult the "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for information on
which TIN to report.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligation regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of Tendered
Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the right to reject
any and all Notes not validly tendered or any Notes the Issuer's acceptance of
which would, in the opinion of the Issuer or their counsel, be unlawful. The
Issuer also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Notes as to any ineligibility of any
holder who seeks to tender Notes in the Exchange Offer. The interpretation of
the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Issuer shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within such time as the Issuer
shall determine. Neither the Issuer, the Exchange Agent nor any other person
shall be under any duty to give notification of defects or irregularities with
respect to tenders of Notes, nor shall any of them incur any liability for
failure to give such notification. Tenders of Notes will not be deemed to have
been made until such defects or irregularities have been cured or waived. Any
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
amend, waive or modify any of the conditions in the Exchange Offer in the case
of any Tendered Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will be
accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder
whose Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated herein for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF
NOTES. Subject to the terms and conditions of the Exchange Offer, the Issuer
will accept for exchange all validly tendered Notes as soon as practicable after
the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be
deemed to have accepted tendered Notes when, as and if the Issuer has given
written or oral notice (immediately followed in writing) thereof to the Exchange
Agent. If any Tendered Notes are not exchanged pursuant to the Exchange Offer
for any reason, such unexchanged Notes will be returned, without expense, to the
undersigned at the address shown in Box 1 or at a different address as may be
indicated herein under "Special Delivery Instructions" (Box 3).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer."
9
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
12% SENIOR NOTES DUE 2006
OF
ROMACORP, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
This form must be used by a holder of 12% Senior Notes due 2006 (the
"Notes") of Romacorp, Inc., a Delaware corporation (the "Company"), who wishes
to tender Notes to the Exchange Agent pursuant to the guaranteed delivery
procedures described in "The Exchange Offer -- Guaranteed Delivery Procedures"
of the Company's Prospectus, dated , 1998 (the "Prospectus") and in
Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Notes pursuant to such guaranteed delivery procedures must ensure that
the Exchange Agent receives this Notice of Guaranteed Delivery prior to the
Expiration Date of the Exchange Offer. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Prospectus or the Letter of
Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998 UNLESS EXTENDED
(THE "EXPIRATION DATE").
United States Trust Company
(the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Overnight Courier: By Hand: By Registered or Certified Mail:
United States Trust Company United States Trust Company United States Trust Company
of New York of New York of New York
770 Broadway, 13th Floor 111 Broadway P.O. Box 844
New York, New York 10003 Lower Level Cooper Station
Attn: Corporate Trust Services New York, New York 10006 New York, New York 10276-0844
Attn: Corporate Trust Services Attn: Corporate Trust Services
</TABLE>
By Facsimile:
212-780-0592
Attn: Corporate Trust Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS NOTICE OF GUARANTEED DELIVERY OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
800-548-6565, OR BY FACSIMILE AT 212-780-0592.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Notes listed below:
<TABLE>
<S> <C> <C>
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Signatures of Registered Holder(s) or Date:
Authorized Signatory: -----------------------------------------------,
- ------------------------------------ 1998
- -------------------------------------------------
- ------------------------------------------------- Address:
Name(s) of Registered Holder(s): -------------------------------------------------
- ------------------------------------------------- -------------------------------------------------
- -------------------------------------------------
- ------------------------------------------------- Area Code and Telephone No.:
--------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become Holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal
(or facsimile thereof), together with the Notes tendered hereby in proper form
for transfer (or confirmation of the book-entry transfer of such Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility described in the
prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures" and in the Letter of Transmittal) and any other required documents,
all by 5:00 p.m., New York City time, on the fifth New York Stock Exchange
trading day following the Expiration Date.
<TABLE>
<S> <C>
Name of firm:
------------------------------------------
-----------------------------------------------
(AUTHORIZED SIGNATURE)
Address: Name:
- ----------------------------------------------- -----------------------------------------------
(PLEASE PRINT)
Title:
- ----------------------------------------------- -----------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Tel. No.: Dated: , 1998
- -----------------------------------------------
</TABLE>
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
3
<PAGE> 4
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail, the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Notes referred
to herein, the signature must correspond with the name(s) written on the face of
the Notes without alteration, enlargement, or any change whatsoever. If this
Notice of Guaranteed Delivery is signed by a participant of the Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of the Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Notes or signed as the name of the participant shown on the Book-Entry
Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
4
<PAGE> 1
EXHIBIT 99.3
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
ROMACORP, INC.
12% SENIOR NOTES DUE 2006
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated
, 1998 (the "Prospectus") of Romacorp, Inc., a Delaware corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 12% Senior Notes due 2006 (the "Notes") held by you
for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 12% Senior Notes due 2006
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[ ] TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
$
[ ] NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representation and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations that (i) the
undersigned's principal residence is in the state of (FILL IN
STATE) , (ii) the undersigned is acquiring the Exchange Notes in
the ordinary course of business of the undersigned, (iii) the undersigned is not
participating, does not participate, and has no arrangement or understanding
with any person to participate in the distribution of the Exchange Notes, (iv)
the undersigned acknowledges that any person participating in the Exchange Offer
for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "Act"), in connection with a secondary resale transaction of the
Exchange Notes acquired by such person and cannot rely on the position of the
Staff of the Securities and Exchange Commission set forth in no-action letters
that are discussed in the section of the Prospectus entitled "The Exchange
Offer -- Resales of the Exchange Notes," and (v) the undersigned is not an
"affiliate," as defined in Rule 405 under the Act, of the Company; (b) to agree,
on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c)
to take such other action as necessary under the Prospectus or the Letter of
Transmittal to effect the valid tender of such Notes.
<PAGE> 2
SIGN HERE
Name of beneficial owner(s):
- --------------------------------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
Name (please print):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:
- ----------------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
2
