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Exhibit 10.17
RALPHS GROCERY COMPANY
$100,000,000 10.45% Senior Notes due 2004
PURCHASE AGREEMENT
June 3, 1996
BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10005
Ladies and Gentlemen:
Ralphs Grocery Company, a Delaware corporation (the "Company"),
together with each of Alpha Beta Company, Bay Area Warehouse Stores, Inc., Bell
Markets, Inc., Cala Co., Cala Foods, Inc., Falley's Inc., Food 4 Less of
California, Inc., Food 4 Less Merchandising, Inc., Food 4 Less of Southern
California, Inc., Food 4 Less GM, Inc., and Crawford Stores, Inc. as guarantors
(collectively, the "Subsidiary Guarantors", and together with the Company, the
"Issuers"), hereby confirm that agreement with you (the "Initial Purchaser"),
as set forth below:
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$100,000,000 aggregate principal amount of its Senior Notes, which will be part
of the same issue as the 10.45% Senior Notes due 2004 (the "Notes"). The Notes
will be unconditionally guaranteed (the "Guarantees") on a joint and several
basis, by the Subsidiary Guarantors. The Notes and the Guarantees are
hereinafter referred to collectively as the "Securities". The Notes are to be
issued under an indenture (the "Indenture") to be dated June 6, 1996, by and
among the Company, the Subsidiary Guarantors and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchaser without
such offers and sales being registered under the Securities Act of 1933, as
amended (the "Act"), in reliance on exemptions therefrom.
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In connection with the sale of the Notes, the Company has prepared
a preliminary offering memorandum dated May 31, 1996 (the "Preliminary
Memorandum"), and a final offering memorandum dated June 3, 1996 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description
of the terms of the Notes, the terms of the offering of the Notes, a
description of the Company and its subsidiaries and any material developments
relating to the Company and its subsidiaries occurring after the date of the
most recent historical financial statements included therein.
The Company and the Subsidiary Guarantors understand that the
Initial Purchaser proposes to make an offering of the Notes only on the terms
and in the manner set forth in the Memorandum and Section 8 hereof as soon as
the Initial Purchaser deems advisable after this Agreement has been executed
and delivered, to persons in the United States whom the Initial Purchaser
reasonably believes to be qualified institutional buyers ("QIBs") 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 to a limited number of
institutional "accredited investors" ("Accredited Investors"), as defined in
Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Act in private sales
exempt from registration under the Act, and outside the United States to
certain persons in reliance on Regulation S under the Act.
The Initial Purchaser and its direct and indirect transferees of
the Notes will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Issuers have agreed,
among other things, to file (i) a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Notes or the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act or (ii) a shelf registration statement pursuant
to Rule 415 under the Act relating to the resale of the Notes by holders
thereof or, if applicable, relating to the resale of Private Exchange Notes (as
defined in the Registration Rights Agreement) by the Initial Purchaser pursuant
to an exchange of the Notes for Private Exchange Notes.
2. Representations and Warranties.
(a) Each Issuer jointly and severally represents and warrants to
and agrees with the Initial Purchaser that:
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(i) Neither the Preliminary Memorandum as of the date thereof nor
the Final Memorandum nor any amendment or supplement thereto as of the
date thereof and at all times subsequent thereto up to the Closing Date
(as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 2(a) do not
apply to statements or omissions made in reliance upon and in conformity
with information relating to the Initial Purchaser furnished to the
Company in writing by the Initial Purchaser expressly for use in the
Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(ii) Each of the Issuers has all the necessary corporate power and
authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby and by the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum). Each of the Issuers
has taken all necessary corporate action to authorize the issuance of the
Securities.
(iii) Each of the Issuers is duly incorporated and validly existing
in good standing as a corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and authority to own or
lease its properties and conduct its businesses as now conducted as
described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum), and each of the
Issuers is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its businesses requires such qualification,
except where the failure to be so qualified would not have (x) a material
adverse effect on the business, condition (financial or other) or results
of operations of the Issuers taken as a whole; or (y) an adverse effect
on the ability of any Issuer to perform any of its material obligations
under this Agreement, the Indenture or the Securities (a "Material
Adverse Effect"); the Company has in all material respects, the
authorized, issued and outstanding capitalization set forth in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum); the only direct or indirect subsidiaries
of the Company are the Subsidiary Guarantors;
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except as aforesaid, none of the Issuers owns, directly or indirectly,
any of the capital stock or other equity securities of any other person,
except that Alpha Beta Company has an investment in Certified Grocers of
California, Inc. ("Certified"), one of the Company's suppliers, and in
Adams/Vermont Renaissance Plaza, Ltd., a California limited partnership,
and Food 4 Less GM has an interest in a joint venture with Certified; the
outstanding shares of capital stock of each of the Issuers have been duly
authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights granted by
such person; and except as described in the Final Memorandum and except
as to any Indebtedness to be repaid on the Closing Date (or, if the Final
Memorandum is not in existence the most recent Preliminary Memorandum),
all of the outstanding shares of capital stock of each of the Subsidiary
Guarantors are owned beneficially by the Company free and clear of all
liens, encumbrances, security interests, mortgages, pledges, charges or
claims. No holders of securities or any of the Issuers are entitled to
have such securities registered under the Registration Statement.
(iv) The Securities, the Exchange Securities and the Private
Exchange Securities have been duly and validly authorized by the Issuers
for issuance and conform in all material respects to the description
thereof in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum). The Securities, the
Exchange Securities and the Private Exchange Securities when executed by
the Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture, and, in the case of the Securities,
delivered to and paid for by the Initial Purchaser in accordance with the
terms hereof, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Issuers entitled
to the benefits of the Indenture and enforceable against the Issuers in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in equity or at
law), (iii) the unenforceability, under certain circumstances, of
provisions imposing penalties, forfeitures, late payment charges or an
increase in interest rate upon delinquency in payment or the
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occurrence of a default, and (iv) the unenforceability of any provision
requiring the payment of attorneys' fees, except to the extent that a
court determines such fees to be reasonable. The Issuers have all
requisite corporate power and authority to execute, deliver and perform
their respective obligations under the Indenture and the Guarantees to
issue and deliver the Securities to the Initial Purchaser as provided
herein and to issue the Exchange Securities and the Private Exchange
Securities as provided in the Registration Rights Agreement. The
Indenture has been duly authorized and, when executed and delivered by
the Issuers (assuming the due authorization, execution and delivery
thereof by the Trustee), will constitute a valid and legally binding
agreement of each of the Issuers enforceable against each of them in
accordance with its terms, except that the enforcement thereof may be
subject to (v) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws now or hereafter in effect relating
to creditors' rights generally, including, without limitation, the effect
on the Guarantees of Section 548 of the Bankruptcy Code and comparable
provisions of state law, (w) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law), (x) the unenforceability, under certain
circumstances, of provisions imposing penalties, forfeitures, late
payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default, (y) the unenforceability of any
provision requiring the payment of attorneys' fees, except to the extent
that a court determines such fees to be reasonable and (z) the
unenforceability of the provisions contained in the Indenture relating to
the waiver of (A) stay, extension or usury laws and (B) subrogation
rights or other rights and defences of the Subsidiary Guarantors. The
Indenture meets the requirement for qualification under the Trust
Indenture Act.
(v) The Guarantees endorsed on the Securities have been, and the
guarantees endorsed on the Exchange Notes and the Private Exchange Notes
will be, duly authorized and, when executed and delivered, will, upon the
execution, authentication and delivery of the Securities, Exchange
Securities and the Private Exchange Securities and, in the case of the
Securities, payment therefor, be valid and binding obligations of each
Subsidiary Guarantor enforceable against such Subsidiary Guarantor in
accordance with their respective terms, except that the
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enforcement thereof may be subject to (v) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
now or hereafter in effect relating to creditors' rights generally,
including, without limitation, the effect on such guarantees of Section
548 of the Bankruptcy Code and comparable provisions of state law, (w)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law), (x) the
unenforceability, under certain circumstances, of provisions imposing
penalties, forfeitures, late payment charges or an increase in interest
rate upon delinquency in payment or the occurrence of a default, (y) the
unenforceability of any provision requiring the payment of attorneys'
fees, except to the extent that a court determines such fees to be
reasonable and (z) the unenforceability of the provisions contained in
the Indentures relating to the waiver of (A) stay, extension or usury
laws and (B) subrogation rights or other rights and defences of the
Subsidiary Guarantors.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Issuers and, assuming the due authorization,
execution and delivery hereof by the Initial Purchaser, constitutes the
valid and legally binding obligation of the Issuers enforceable against
the Issuers in accordance with its terms, except that the enforcement
hereof may be subject to (v) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (w) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law), (x) the unenforceability, under certain
circumstances, of provisions imposing penalties, forfeitures, late
payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default, (y) the unenforceability of any
provision requiring the payment of attorneys' fees, except to the extent
that a court determines such fees to be reasonable and (z) the
unenforceability under certain circumstances under law or court decisions
of provisions for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy (clauses (v) through (z) above are referred to
collectively herein as, the "Enforceability Limitations"). Except as
described in
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the Final Memorandum (or, if the Final Memorandum is not in existence,
the most recent Preliminary Memorandum), no consent, approval,
authorization or order of any court or governmental agency or body is
required for the performance of this Agreement, the Securities, the
Guarantees, the Exchange Securities, the Private Exchange Securities or
the Indenture by any of the Issuers (to the extent each such person is a
party thereto) or the consummation by any Issuer of any of the
transactions contemplated hereby or thereby or by the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum), except such as have been obtained and such as
may be required under the Act, the Trust Indenture Act or state
securities or "Blue Sky" laws or where the failure to obtain such
consent, approval, authorization or order would not have a Material
Adverse Effect. None of the Issuers is (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation of any statute,
judgment, decree, order, rule or regulation applicable to any of the
Issuers which violation would have a Material Adverse Effect, or (iii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or other agreement or instrument to which any of the
Issuers is subject, which default would have a Material Adverse Effect.
The execution, delivery and performance by the Issuers of this
Agreement, the Securities, the Guarantees, the Exchange Securities, the
Private Exchange Securities or the Indenture (to the extent each such
person is a party thereto), and the consummation by each of the Issuers
of the transactions contemplated hereby, thereby and by the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) will not conflict with or constitute or
result in a breach or violation by any of the Issuers of any of (x) the
terms or provisions of, or constitute a default by any of the Issuers
under, any indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, or other agreement or instrument to
which any such person is a party or to which any of them or their
respective properties is subject, which conflict, breach, violation or
default would have a Material Adverse Effect, (y) the certificate of
incorporation or bylaws of any such person, or (z) any statute, judgment,
decree, order, rule or regulation (excluding state securities and "Blue
Sky" laws) of any court or governmental agency or other body
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applicable to any such person, or any of their respective properties,
which conflict, breach, violation or default would have a Material
Adverse Effect.
(vii) (x) Immediately after the consummation of the issuance of the
Securities and the consummation of the other transactions contemplated by
the Final Memorandum (or, if the Final Memorandum is not in existence,
the most recent Preliminary Memorandum), the fair value and present fair
saleable value of the assets of each Issuer will exceed the sum of its
stated liabilities and identified contingent liabilities; and (y) after
giving effect to the issuance of the Securities and the consummation of
the other transactions contemplated by the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Preliminary
Memorandum), none of the Issuers is (a) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or (c) insolvent.
(viii) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized and, when executed and delivered by the
Issuers will constitute a valid and legally binding agreement of each of
the Issuers enforceable against each of the Issuers in accordance with
its terms, except that the enforcement thereof may be subject to the
Enforceability Limitations.
(ix) The Company has delivered to the Initial Purchaser a true and
correct copy of the New Credit Facility (as defined in the Memorandum)
together with all related documents, instruments and agreements and all
schedules, exhibits, appendices and attachments thereto except as
described in the Final Memorandum (or if the Final Memorandum is not yet
in existence the most recent Preliminary Memorandum); there will have
been no material amendments, alterations, modifications or waivers of any
of the provisions of the New Credit Facility since its date of execution,
other than the first, second and third amendments thereto, the limited
waiver thereunder dated January 28, 1996 and certain releases of
collateral thereunder in connection with equipment sale-leaseback
transactions; there exists as of the date hereof and will exist on the
Closing Date, after giving effect to the issuance of the Securities and
the consummation of the other transactions contemplated by the Final
Memorandum
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(or if the Final Memorandum is not yet in existence, the most recent
Preliminary Memorandum) no event or condition which would constitute a
default or an event of default or other violation or breach of the New
Credit Agreement.
(x) Except as disclosed in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
and except as would not individually or in the aggregate have a Material
Adverse Effect (w) each of the Issuers is in compliance with all
applicable Environmental Laws (as defined below), (x) each of the Issuers
has all permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance with their
requirements, (y) there are no pending, or to the best knowledge of any
of the Issuers threatened, Environmental Claims (as defined below)
against any of the Issuers and (z) each of the Issuers does not have
knowledge of any circumstances with respect to any of their respective
properties or operations that could reasonably be anticipated to form the
basis of an Environmental Claim against any of the Issuers or any of
their respective properties or operations and the business operations
relating thereto that could reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, the following terms
shall have the following meanings: "Environmental Law" means, with
respect to any person, any federal, state, local or municipal statute,
law, rule, regulation, ordinance, code and any published judicial or
administrative interpretation thereof including any judicial or
administrative order, consent decree or judgment binding on such person
or any of its subsidiaries, relating to the environment, health, safety
or any chemical, material or substance, exposure to which is prohibited,
limited or regulated by any such governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings relating in any way to any
Environmental Law.
(xi) The audited consolidated financial statements of the Company
included in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) present fairly the
consolidated 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, except as otherwise stated
therein, and
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the unaudited consolidated financial statements of the Company and the
related notes included in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
present fairly the consolidated financial position, results of operations
and cash flows of the Company at the dates and for the periods to which
they relate, subject to year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein.
The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") and
have been properly computed on the bases described therein. The
assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
Each of Arthur Andersen LLP and KPMG Peat Marwick, which has
audited certain of such financial statements as set forth in their
reports included in the Final Memorandum (or, if the Final Memorandum is
not in existence, the most recent Preliminary Memorandum) is an
independent public accounting firm as within the meaning of the Act. The
statistical and market-related data (including, without limitation, the
estimated cost savings information) included in the Final Memorandum (or,
if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum) are based on or derived from sources which the Issuers
believe to be reliable and accurate.
(xii) Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
there is not pending or, to the knowledge of any of the Issuers,
threatened, any action, suit, proceeding, inquiry or investigation to
which any Issuer, or to which the property of any Issuer is subject,
before or brought by any court or governmental
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agency or body, which would if adversely determined have a Material
Adverse Effect.
(xiii) Each of the Issuers has (a) good and marketable title to all
the real properties and other material assets (personal, tangible,
intangible or mixed) owned by it, or purported to be owned by it, and, as
of the Closing Date, such title will be free and clear of all liens,
except for liens which would be permitted under the Indenture and (b)
peaceful and undisturbed possession under all leases to which it is a
party as lessee or sublessee, except for such defects in title or lack of
possession that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. Each of the Issuers operates all
material real and personal property leased by it under valid and
enforceable leases and has performed in all material respects the
obligations required to be performed by it with respect to each such
lease, except for such leases and obligations which, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. As
to leases with respect to which any Issuer is the lessor, the lessees and
other parties under such leases are in compliance with all terms and
conditions thereunder and such leases are in full force and effect except
for any failures to comply or remain in full force and effect which could
not reasonably be expected to have a Material Adverse Effect. All
tangible assets and properties of each Issuer are in good working order
(subject to ordinary wear and tear) and are adequate for the uses to
which they are being put or would be put in the ordinary course of
business except for such assets and properties as are not material in the
aggregate to the business, condition (financial or otherwise) or results
of operations of the Issuers taken as a whole.
(xiv) The Issuers own, or are licensed under, and have the rights to
use, all trademarks and trade names (collectively, "Intellectual
Property") used in, or necessary for the conduct of, their businesses as
currently conducted, and the consummation of the transactions
contemplated hereby and by the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
will not alter or impair any such rights, except for such alterations or
impairments as could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Issuers no claims have been
asserted by any person to the use of any such Intellectual Property or
challenging or questioning the validity or effectiveness of any license
or agreement related thereto, except for
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such claims as could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Issuers, there is no valid
basis for any such claim and the use of such Intellectual Property by the
Issuers does not infringe on the rights of any person. Each of the
Issuers has obtained all licenses, permits, franchises and other
governmental authorizations, the lack of which would have a Material
Adverse Effect.
(xv) Subsequent to the respective dates as of which information is
given in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) and except as
described therein or contemplated thereby, (x) none of the Issuers has
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions, not in the ordinary course of
business and (y) none of the Issuers has purchased any of its respective
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on their respective capital stock or
otherwise.
(xvi) All taxes, assessments, fees and other charges (including,
without limitation, withholding taxes, penalties, and interest) due or
claimed to be due from any of the Issuers that are due and payable have
been paid, other than those being contested in good faith or those
currently payable without penalty or interest and for which an adequate
reserve or accrual has been established in accordance with generally
accepted accounting principles, and except where the failure so to pay is
not reasonably likely to have, singly or in the aggregate, a Material
Adverse Effect. The Issuers know of no actual or proposed additional tax
assessments for any fiscal period against the Issuers that, singly or in
the aggregate, is reasonably likely to have a Material Adverse Effect.
(xvii) None of the Issuers, or any agent acting on behalf of any of
them has taken or will take any action that might cause this Agreement,
the issuance or sale of the Securities or the issuance of the Guarantees
to violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System as in effect on the Closing Date.
(xviii) None of the Issuers is now, nor after giving effect to the
issuance of the Securities or the consummation of the other transactions
contemplated by the Final Memorandum (or, if the Final Memorandum is not
in existence, the most recent Preliminary Memorandum) will
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any Issuer be, an "investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(xix) Except as stated in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
none of the Issuers knows of any outstanding claims for services, either
in the nature of a finder's fee, financial advisory fee, origination fee
or similar fee, with respect to the transactions contemplated hereby.
(xx) Except as stated in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
none of the Issuers nor, to the best of the Issuers' knowledge, any of
the Issuers' respective directors, officers or controlling persons has
taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result, under the Act or otherwise,
in, or which has constituted, stablization or manipulation of the price
of any security of the Issuers to facilitate the issuance of the
Securities.
(xxi) None of the Company, the Subsidiary Guarantors or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in repsect of, any
"security" (as defined in the Act) which is or could be integrated with
the sale of the Securities in a manner that would require the
registration under the Act of the Securities or (ii) assuming the
accuracy of the representations and warranties of the Initial Purchaser
in Section 8 hereof, engaged in any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Act) in connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act. Assuming (i) the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof, (ii) the due performance by
the Initial Purchaser of the covenants and agreements set forth in
Section 8 hereof, and (iii) compliance by the Initial Purchaser with the
transfer restrictions described under the caption "Transfer Restrictions"
in the Memorandum, it is not necessary in connection with the offer, sale
and deliver of the Securities to the Initial Purchaser in the manner
contemplated by this Agreement to register any of the
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Securities under the Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the "TIA").
(xxii) No securities of any Issuer are of the same class (within the
meaning of Rule 144A under the Act) as the Securities and listed on a
national securities exchange registered under Section 6 of the Exchange
Act, or quoted in a U.S. automated inter-dealter quotation system.
(xxiii) The Issuers have not (a) "incurred," as such term is used in
the Existing Indentures (as defined below), any "Indebtedness" pursuant
to, or in reliance on, the last clause of the definition of "Permitted
Indebtedness," (b) "made," as such term is used in the Existing
Indentures, any "Investments" pursuant to, or in reliance on, the last
clause of the definition of "Permitted Investments" or (c) "created,
incurred, assumed or suffered to exist," as such terms are used in the
Existing Indentures, any "Liens" pursuant to, or in reliance on, the last
full clause of the definition of "Permitted Liens". For purposes of the
preceding sentence, Existing Indentures shall mean, collectively, (i) the
13.75% Senior Subordinated Notes Indenture and the 11% Senior
Subordinated Notes Indenture, each dated as of June 1, 1995 by and
between the Issuers and United States Trust Company of New York, as
trustee and (ii) the 10.45% Senior Notes Indenture dated as of June 1,
1995 by and between the Issuers and Norwest Bank Minnesota, National
Association, as trustee. Capitalized terms in quotes used in this clause
(xxiii) shall have the meanings ascribed to such terms in the applicable
Existing Indenture.
Any certificate signed by any officer of any Issuer and delivered
pursuant to this Agreement or in connection with the payment of the purchase
price and delivery of the Securities shall be deemed a representation and
warranty by the Issuers to the Initial Purchaser as to the matters covered
thereby, and shall not be deemed a representation by such officer as an
individual.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Issuers agree to issue and sell to the Initial Purchaser, and
the Initial Purchaser agrees to purchase from the Issuers, at 92.375% of their
principal amount, the Securities. One or more certificates in definitive form
for the Securities that the
15
Initial Purchaser has agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Initial Purchaser
requests upon notice to the Issuers at least 48 hours prior to the Closing
Date, shall be delivered by or on behalf of the Company, against payment by or
on behalf of the Initial Purchaser of the purchase price therefor by wire
transfer or check of immediately available funds to the account of the Company.
Such delivery of and payment for the Securities shall be made at the offices of
Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, at 10:00
A.M., New York time, on June 6, 1996, or at such other place, time or date as
the Initial Purchaser and the Issuers may agree upon, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Issuers will make such certificate or certificates for the Securities available
for checking and packaging by the Initial Purchaser at the offices in New York,
New York of BT Securities Corporation at least 24 hours prior to the Closing
Date.
(b) The obligation of the Company and the Subsidiary Guarantors
to issue and sell the Securities hereunder shall be subject to the condition
that the Agent and the Requisite Lenders (as defined in the New Credit
Facility) shall have approved the terms thereof in accordance with the Third
Amendment, Consent and Waiver dated as of March 8, 1996 under the New Credit
Facility.
4. Offering by the Initial Purchaser. The Initial Purchaser
proposes to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of the Initial Purchaser is advisable.
5. Certain Covenants. Each Issuer jointly and severally
covenants and agrees with the Initial Purchaser that:
(i) The Issuers will not amend or supplement the Final Memorandum
or any amendment or supplement thereto of which the Initial Purchaser
shall not previously have been advised and furnished a copy for a
reasonable period of time prior to the proposed amendment or supplement
and as to which the Initial Purchaser shall not have given its consent
(which consent shall not be unreasonably withheld). The Issuers will
promptly, upon the reasonable request of the Initial Purchaser or counsel
for the Initial Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary in
connection with the resale of the Securities by the Initial Purchaser for
such Memorandum not to contain any untrue statement of a material fact or
16
omission of a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or
to comply with applicable laws, rules or regulations.
(ii) Each Issuer will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the
Securities by the Initial Purchaser; provided, however, that in
connection therewith no Issuer shall be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or, except at the expense of the Initial Purchaser, to keep
any state qualification effective after one year.
(iii) If, at any time prior to the completion of the initial resale
by the Initial Purchaser of the Securities, any event shall occur as a
result of which it is necessary, in the opinion of counsel for the
Initial Purchaser, to amend or supplement the Final Memorandum in order
to make the Final Memorandum not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, or if for any other
reason it shall be necessary to amend or supplement the Final Memorandum
in order to comply with applicable law, the Issuers shall (subject to
Section 5(i)) forthwith amend or supplement the Final Memorandum (in form
and substance reasonable satisfactorily to counsel for the Initial
Purchaser and in compliance with applicable law) so that, as so amended
or supplemented, the Final Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances
existing at the time it is delivered to a purchaser, not misleading and
will comply with applicable law, and the Issuers will furnish to the
Initial Purchaser a reasonable number of copies of such amendment or
supplement.
(iv) The Issuers will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto as the Initial Purchaser may reasonably request.
(v) For so long as any of the Securities remain outstanding, the
Company will furnish to the Initial
17
Purchaser copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee or to the holders of
the Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of
securities of the Company may be listed.
(vi) Neither the Company nor any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any "security" (as defined in the Act) which could be integrated with the
sale of the Securities in a manner which would require the registration
under the Act of the Securities.
(vii) The Company will not and will not permit any of its
subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner involving
a public offering within the meaning of Section 4(2) of the Act.
(viii) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, upon request, to any holder
of Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(ix) The Company will use its best efforts to (i) permit the
Securities to be designated PORTAL securities in accordance with the
rules and regulations adopted by the NASD relating to trading in the
Private Offerings, Resales and Trading through Automated Linkages market
(the "Portal Market") and (ii) permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(x) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(xi) Prior to the Closing Date, the Issuers will furnish to the
Initial Purchaser, as soon as they have been prepared by or are available
to the Issuers, a copy of any unaudited interim consolidated financial
statements of the Company and its subsidiaries, for any period subsequent
to the period covered by the most recent financial statements appearing
in the Final Memorandum.
18
6. Expenses. The Issuers jointly and severally agree to pay all
costs and expenses incident to the performance of their respective obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing, word processing
or other production of documents with respect to such transactions, including
any costs of printing the Preliminary Memorandum and the Final Memorandum and
any amendment or supplement thereto, and any "Blue Sky" memoranda, (ii) all
arrangements relating to the delivery to the Initial Purchaser of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by any Issuer, (iv) the
preparation, issuance and delivery to the Initial Purchaser of any certificates
evidencing the Securities and the Guarantees, including trustees' fees, (v) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and reasonable fees and disbursements of counsel for the
Initial Purchaser relating thereto, (vi) expenses of the Issuers in connection
with any meetings with prospective investors in the Securities, (viii) fees and
expenses of the Trustee including fees and expenses of its counsel, (ix) all
expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL Market, and (x) any fees charged by
investment rating agencies for the rating of the Securities. Notwithstanding
any of the foregoing, the Company will not be responsible for any of the fees
and expenses of the Initial Purchaser (including, without limitation, fees and
disbursements of counsel for the Initial Purchaser) incurred in connection with
the transactions contemplated hereby.
7. Conditions of the Initial Purchaser's Obligations. The
obligation of the Initial Purchaser to purchase and pay for the Securities are
subject to the accuracy of the representations and warranties contained herein,
to the performance by each Issuer of its covenants and agreements hereunder and
to the following additional conditions:
(i) The Initial Purchaser shall have received opinions in form and
substance satisfactory to the Initial Purchaser, dated the Closing Date,
of (a) Latham & Watkins, special counsel for the Issuers, substantially
in the form of Exhibit B hereto and (b) Irwin, Clutter & Severson,
special Kansas counsel to the Issuers, substantially in the form of
Exhibit C hereto.
(ii) The Initial Purchaser shall have received an opinion, dated
the Closing Date, of Cahill Gordon &
19
Reindel, counsel for the Initial Purchaser, with respect to the
sufficiency of certain corporate proceedings and other legal matters
relating to this Agreement, and such other related matters as the Initial
Purchaser may require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and other
documents and information as they may reasonably request to pass upon
such matters. In addition, in rendering their opinion, Cahill Gordon &
Reindel may state that their opinion is limited to matters of New York,
Delaware corporate and federal law.
(iii) The Initial Purchaser shall have received, from Arthur
Andersen LLP, independent public accountants for the Issuers, letters
dated, respectively, the date hereof and the Closing Date, in form and
substance satisfactory to the Initial Purchaser and Cahill Gordon &
Reindel, counsel for the Initial Purchaser.
(iv) The Initial Purchaser shall have received from KPMG Peat
Marwick, independent public accountants for RSI and RGC, letters dated,
respectively, the date hereof and the Closing Date, in form and substance
satisfactory to the Initial Purchaser and Cahill Gordon & Reindel,
counsel for the Initial Purchaser.
(v) The representations and warranties of each Issuer contained in
this Agreement shall be true and correct in all material respects on and
as of the Closing Date (other than to the extent any such representation
or warranty is expressly made as to a certain date); each Issuer shall
have complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date; and subsequent to the date of the most recent financial statements
in the Final Memorandum, there shall have been no material adverse change
in the business, condition (financial or other) or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Change"), or any development involving a prospective Material Adverse
Change, except as set forth in, or contemplated by, the Final Memorandum.
(vi) Neither the issuance and sale of the Securities pursuant to
this Agreement nor any of the other transactions contemplated by the
Final Memorandum shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued or any
action, suit or proceeding shall have been commenced with respect to this
Agreement or any of the transactions
20
contemplated by the Final Memorandum, before any court or governmental
authority.
(vii) The Initial Purchaser shall have received a certificate, dated
the Closing Date, of the Vice Chairman, President or any Vice President
(and with respect to (B) below, the Chief or Principal Financial Officer)
of the Company to the effect that:
(A) The representations and warranties of each Issuer in
this Agreement are true and correct in all material respects as if made on and
as of the Closing Date, and each Issuer has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date after giving effect to the
transactions contemplated hereby and the Final Memorandum;
(B) Subsequent to the respective dates as of which
information is given in the the Final Memorandum, there has not
been any Material Adverse Change;
(C) Neither the sale of the Securities by the Issuers nor
any of the other transactions contemplated hereby or by the Final
Memorandum has been enjoined (temporarily or permanently); and
(D) The Issuers have complied in all material respects with
all agreements and covenants in the New Credit Facility and
performed in all material respects all conditions to borrowing
specified therein.
(viii) On the Closing Date, the Initial Purchaser shall have received
the Registration Rights Agreement executed by the Issuers and such
agreement shall be in full force and effect at all times from and after
the Closing Date.
(ix) The Agent and the Requisite Lenders shall have approved the
sale and issuance of the Securities in accordance with the Third
Amendment, Consent and Waiver dated as of March 8, 1996 under the New
Credit Facility.
On or before the Closing Date, the Initial Purchaser and counsel
for the Initial Purchaser shall have received such further documents, opinions,
certificates and schedules or instruments relating to the business, corporate,
legal and financial affairs of the Issuers as they shall have heretofore
reasonably requested from the Issuers.
21
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchaser and counsel for the Initial Purchaser. The
Issuers shall furnish to the Initial Purchaser such conformed copies of such
opinions, certificates, letters, schedules, documents and instruments in such
quantities as the Initial Purchaser shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. The
Initial Purchaser represents and warrants that it is a QIB. The Initial
Purchaser agrees with the Issuers that (i) it has not and will not solicit
offers for, or offer or sell, the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act; and (ii) it has and will solicit offers for the
Securities only from, and will offer the Securities only to (A) in the case of
offers inside the United States (x) persons whom the Initial Purchaser
reasonably believes to be QIBs 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 the Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A or (y) a limited number of other institutional investors reasonably
believed by the Initial Purchaser to be Accredited Investors that, prior to
their purchase of the Securities, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Annex A to the Final
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("foreign purchasers," which term shall include
dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that, in the case of this clause (B), in purchasing
such Securities such persons are deemed to have represented and agreed as
provided under the caption "Transfer Restrictions" contained in the Final
Memorandum.
9. Indemnification and Contribution. (a) Each Issuer jointly
and severally agrees to indemnify and hold harmless the Initial Purchaser, and
each person, if any, who controls the Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such controlling
22
person may become subject under the Act, the Exchange Act or otherwise, insofar
as any such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by any Issuer or based upon
written information furnished by or on behalf of any Issuer filed in any
jurisdiction in order to qualify the Securities under the securities or
"Blue Sky" laws thereof or filed with any securities association or
securities exchange (each an "Application") or
(ii) the omission or alleged omission to state, in any Memorandum
or any amendment or supplement thereto, or any Application, a material
fact required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such
controlling person for any legal or other expenses reasonably incurred by the
Initial Purchaser or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that none of
the Issuers will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Memorandum or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to any
Issuer by the Initial Purchaser specifically for use therein; and provided,
further, that neither the Company nor the Subsidiary Guarantors will be liable
to the Initial Purchaser or any person controlling the Initial Purchaser with
respect to any such untrue statement or omission made in the Preliminary
Memorandum that is corrected in the Offering Memorandum (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from the Initial Purchasers in reliance upon the
Preliminary Memorandum but was not sent or given a copy of the Offering
Memorandum (as amended or supplemented) at or prior to the written confirmation
of the sale of such Notes to such person, unless such failure to deliver the
Offering Memorandum (as amended or supplemented) was a result of noncompliance
by the Company or the Subsidiary Guarantors with Section 5(iv) of this
Agreement. This
23
indemnity agreement will be in addition to any liability that any Issuer may
otherwise have to the indemnified parties. None of the Issuers will, without
the prior written consent of the Initial Purchaser, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification from the Initial
Purchaser may be sought hereunder (whether or not the Initial Purchaser or any
person who controls the Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Initial Purchaser and each such controlling person
from all liability arising out of such claim, action, suit or proceeding.
(b) The Initial Purchaser will indemnify and hold harmless each
Issuer, their respective directors, their respective officers and each person,
if any, who controls any Issuer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which any Issuer or any such director, officer or controlling
person may become subject under the Act, the Exchange Act, or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any Memorandum or any
amendment or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to any Issuer by the Initial
Purchaser specifically for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by any Issuer or any such director,
officer or controlling person in connection with investigating or defending
against or appearing as a third- party witness in connection with any such
loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that the Initial Purchaser may
otherwise have to the indemnified parties. The Initial Purchaser will not,
without the prior written consent of the Company and any affected Subsidiary
Guarantor settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification from the Company or any
24
affected Subsidiary Guarantor may be sought hereunder (whether or not the
Company or any such affected Subsidiary Guarantor or any person who controls
the Company or any such affected Subsidiary Guarantor within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of the Company or any such affected
Subsidiary Guarantor and each such controlling person from all liability
arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 9. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, then
the indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same
25
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchaser in the case of paragraph (a) of this
Section 9 or the Issuers in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party, unless
such indemnified party waived its rights under this Section 9, in which case
the indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the 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 party or parties on
the one hand and the indemnified party 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).
The relative benefits received by the Issuers on the one hand and the Initial
Purchaser on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (before deducting expenses other than
discounts and commissions) received by the Company bear to the total discounts
and commissions received by the Initial Purchaser. 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 Company or the Subsidiary Guarantors on the one hand, or the Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
26
statement or omission, and any other equitable considerations appropriate in
the circumstances. Each Issuer and the Initial Purchaser agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Issuers on the one hand and the Initial
Purchaser on the other hand were treated as one entity for such purpose) or by
any other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial
Purchaser shall not be obligated to make contributions hereunder that in the
aggregate exceed the total discounts and commissions received by the Initial
Purchaser under this Agreement, less the aggregate amount of any damages that
the Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and 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. For purposes of this paragraph (d), each person, if any,
who controls the Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
the Initial Purchaser, and each director of each Issuer, each officer of each
Issuer and each person, if any, who controls any Issuer within the meaning of
Section 15 of the Act of Section 20 of the Exchange Act, shall have the same
rights to contribution as each such Issuer.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of each Issuer, their
respective officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of any Issuer, any of their respective officers or directors, the
Initial Purchaser or any controlling person referred to in Section 9 hereof and
(ii) delivery of and payment for the Securities, and shall be binding upon and
shall inure to the benefit of, any successors, assigns, heirs, personal
representatives of the Issuers, the Initial Purchaser, RSI and indemnified
parties referred to in Section 9 hereof. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 9 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchaser by
27
notice to the Issuers given prior to the Closing Date in the event that any
Issuer shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on their respective part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Date:
(i) Any Issuer shall have sustained any loss or interference with
respect to its businesses or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, which loss or interference has had or has a Material Adverse
Effect or there shall have been any Material Adverse Change, or any
development involving a prospective Material Adverse Change (including
without limitation a change in management or control of any Issuer),
except as described in or contemplated by the Final Memorandum (exclusive
of any amendment or supplement thereto);
(ii) trading in securities generally on the New York or American
Stock Exchange shall have been suspended or minimum or maximum prices
shall have been established on any such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (c) any material change in the financial
markets of the United States which, in the sole judgment of the Initial
Purchaser, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the Final
Memorandum, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided
in Section 10 hereof.
12. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchaser, shall be mailed or delivered or
telecopied and confirmed in writing to the Initial Purchaser c/o BT Securities
Corporation, One Bankers Trust Plaza, New York, New York 10005, Attention:
Gerald McConnell, and with a copy to Cahill Gordon & Reindel, 80 Pine Street,
New York, New York 10005, Attention: William M. Hartnett, Esq. If sent to any
Issuer, shall be mailed,
28
delivered or telegraphed and confirmed in writing to Ralphs Grocery Company,
1100 West Artesia Blvd., Compton, California 90220, Attention: Jan Charles
Gray, Esq., Senior Vice President, General Counsel and Secretary, with a copy
to Latham & Watkins, 633 West Fifth Street, Suite 4000, Los Angeles, California
90071, Attention: Thomas C. Sadler, Esq.
13. Successors. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchaser, each Issuer and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of each Issuer contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control
the Initial Purchaser within the meaning of Section 15 of the Act or Section 20
of the Exchange Act and (ii) the indemnities of the Initial Purchaser contained
in Section 9 of this Agreement shall also be for the benefit of the directors
of each Issuer, their respective officers and any person or persons who control
any Issuer within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from the Initial Purchaser will be
deemed a successor because of such purchase.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among each of the
Issuers and the Initial Purchaser.
Very truly yours,
RALPHS GROCERY COMPANY
By:
Name: Jan Charles Gray
Title: Senior Vice President
General Counsel &
Secretary
ALPHA BETA COMPANY,
BAY AREA WAREHOUSE STORES, INC.
BELL MARKETS, INC.,
CALA CO.,
CALA FOODS, INC.,
FALLEY'S, INC.,
FOOD 4 LESS OF CALIFORNIA, INC.,
FOOD 4 LESS MERCHANDISING, INC.,
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.,
FOOD 4 LESS GM, INC.
CRAWFORD STORES, INC.
as Subsidiary Guarantors
By:
Name: Jan Charles Gray
Title: Senior Vice President
General Counsel &
Secretary
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
By: _____________________________
Name: Gerald McConnell
Title: Vice President
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Exhibit B
Form of Opinion of Latham & Watkins
1. Each of Ralphs Grocery Company (the "Company") and the
Subsidiary Guarantors (other than Falley's ) (collectively, the "Corporations")
has been duly incorporated and is validly existing and in good standing under
the laws of its state of incorporation with corporate power and authority to
own or lease its properties and to conduct its business as now conducted as
described in the Final Memorandum.
2. Each of the Company, Cala Co. and Food 4 Less of Southern
California, Inc. is duly qualified to do business as a foreign corporation in
California and is in good standing in California.
3. The Company or a subsidiary or subsidiaries of the Company
own of record in the aggregate 100% of the capital stock of each corporation
that is a Subsidiary Guarantor (other than Falley's) and all such capital stock
has been duly authorized and validly issued and is fully paid and
nonassessable.
4. Each of the Corporations has full corporate power and
authority to execute, deliver and perform each of its obligations under the
Purchase Agreement, the Indenture, the Notes, the Exchange Notes, the Private
Exchange Notes and the Guarantees and to issue the Notes, the Exchange Notes,
the Private Exchange Notes and the Guarantees to be issued by it pursuant to
the Indenture.
5. Except as set forth in the Final Memorandum, to the best of
such counsel's knowledge, no holder of securities of the Corporations is
entitled to have such securities registered under a registration statement
filed by the Company pursuant to the Registration Rights Agreement.
6. To the best of our knowledge, there is no action, suit,
proceeding or investigation pending or threatened against or affecting any of
the Corporations or any of their respective properties or assets in any court
or before any governmental authority or arbitration board or tribunal that
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the Purchase Agreement, the Registration Rights Agreement, the Indenture or the
issuance, sale and delivery of the Notes or the Guarantees.
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7. The Indenture has been duly authorized, executed and
delivered by the Corporations and (assuming due authorization, execution and
delivery by the Trustee) is the legally valid and binding agreement of the
Corporations, enforceable against the Corporations in accordance with its
terms; the Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended.
8. The Notes have been duly authorized by the Company for
issuance and, when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of the Purchase Agreement, will be legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms.
9. The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company and when the Exchange Notes and the
Private Exchange Notes have been duly executed and delivered by the Company in
accordance with the terms of the Registration Rights Agreement and the
Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and delivery of the Exchange
Notes and the Private Exchange Notes by the Trustee in accordance with the
Indenture), will constitute the valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture, and enforceable against the
Company in accordance with their terms.
10. Each of the Purchase Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Corporations;
the execution and delivery of the Purchase Agreement, the Registration Rights
Agreement, the Indenture, the Notes and the Guarantees by the Corporations, to
the extent each is a party thereto, and the issuance and sale of the Notes
pursuant to the Purchase Agreement and the making of the Guarantees pursuant to
the Indenture will not result in the violation by any Corporation of its
certificate or articles of incorporation or bylaws or any federal, New York,
California, or Delaware General Corporation Law statute, rule or regulation
known to us to be applicable to the Corporations (other than federal or state
securities laws, which are specifically addressed elsewhere herein) or in the
breach of or a default by any Corporation under any of the material agreements
or court orders specifically directed to the Corporations (which material
agreements have been identified to us by an officer of such person as material
to such person), which conflict, violation, breach or default would have a
material adverse effect on the Company and the Subsidiary Guarantors, taken as
a whole.
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11. The Company and the Subsidiary Guarantors have all requisite
corporate power and authority to execute, deliver and perform their obligations
under the Registration Rights Agreement; the Registration Rights Agreement has
been duly and validly authorized, executed and delivered by the Company and the
Subsidiary Guarantors and (assuming due authorization, execution and delivery
thereof by the Initial Purchaser) constitutes the valid and legally binding
agreement of the Company and the Subsidiary Guarantors and is enforceable
against the Company and the Subsidiary Guarantors and in accordance with its
terms.
12. To the best of our knowledge, no consent, approval,
authorization or order of, or filing with, any federal, New York, California,
or Delaware court or governmental agency or body is required for the issuance
and sale of the Notes by the Company pursuant to the Purchase Agreement and the
making of the Guarantees by the respective Subsidiary Guarantors (other than
Falley's) pursuant to the Indenture, except such as may be required under state
securities laws in connection with the purchase and distribution of such Notes
and Guarantees by the Initial Purchaser.
13. We call your attention to the fact that the Purchase
Agreement, the Registration Rights Agreement, the Indenture, the Notes and the
Guarantees select the internal laws of the State of New York as the governing
law. It is our opinion that a New York State court or a federal court sitting
in New York will honor the parties' choice of the internal laws of the State of
New York as the law applicable to such documents.
14. The statements set forth in the Offering Memorandum under the
caption "Description of Notes", insofar as they purport to summarize certain
provisions of the Notes and the Indenture, provide fair summaries thereof and
are accurate in all material respects.
15. No registration under the Act of the Notes is required in
connection with the sale of the Notes to the Initial Purchaser as contemplated
by this Agreement and the Final Memorandum or in connection with the initial
resale of the Notes by the Initial Purchaser in accordance with Section 8 of
this Agreement, and prior to the commencement of the Exchange Offer (as defined
in the Registration Rights Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Indenture is not required to be qualified under the TIA, in each case assuming
(i) that the Initial Purchaser and the purchasers who buy such Notes in the
initial resale thereof are qualified institutional
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buyers as defined in Rule 144A promulgated under the Act ("QIBs") or, in the
case of purchasers who buy Notes in the initial resale, are a limited number of
accredited investors as defined in Rule 501(a)(1), (2), (3) or (7) promulgated
under the Act ("Accredited Investors"), (ii) the accuracy of the Initial
Purchaser's representations in Section 8 and those of the Corporations
contained in this Agreement regarding the absence of a general solicitation in
connection with the sale of such Notes to the Initial Purchaser and the initial
resale thereof, (iii) the due performance by the Initial Purchaser of the
agreements set forth in Section 8 hereof (iv) compliance by the Initial
Purchaser with the transfer restrictions described under the caption "Transfer
Restrictions" in the Memorandum and (v) the accuracy of the representations
made by each Accredited Investor who purchases Notes in the initial resale as
set forth in the Memorandum.
16. In addition, we have participated in conferences with
officers and other representatives of the Company and the Subsidiary
Guarantors, representatives of the independent public accountants for the
Company and the Subsidiary Guarantors and your representatives, at which the
contents of the Memorandum and related matters were discussed and, although we
are not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Memorandum and have
not made any independent check or verification thereof, during the course of
such participation (relying as to materiality to a large extent upon the
statements of officers and other representatives of the Company and the
Subsidiary Guarantors), no facts came to our attention that caused us to
believe that the Memorandum, at the date thereof or at the Closing Date,
contained an untrue statement of a material fact or omitted 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; it
being understood that we express no belief with respect to the financial
statements, schedules and other financial and statistical data included in the
Final Memorandum.
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Exhibit C
Form of Opinion of Irwin, Clutter & Severson
(1) Falley's is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Kansas, and has the
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as now conducted.
(2) The authorized capital stock of Falley's is 1,000 shares of
common stock, ten cents par value. As of the date herein, 1,000 shares of such
common stock are issued and outstanding, all of which are owned of record by
the Company. All such outstanding shares of stock have been duly authorized
and validly issued and are fully paid and nonassessable.
(3) Falley's has full corporate power and authority to execute,
deliver and perform its obligations under the Purchase Agreement, the
Registration Rights Agreement, the Indenture and the Guarantees pursuant
thereto.
(4) Each of the Purchase Agreement, the Registration Rights
Agreement, the Indenture and the Guarantees has been duly authorized by all
necessary corporate action, executed and delivered by Falley's.
(5) The execution and delivery of the Purchase Agreement, the
Registration Rights Agreement, the Indenture and the issuance of the Guarantees
by Falley's pursuant to the Indenture will not result in the violation of any
Kansas statute, rule or regulation (other than state securities laws) known to
us to be applicable to Falley's, which violation would have a material adverse
effect on the Company and the Subsidiary Guarantors, taken as a whole. To the
best of our knowledge, no consent, approval, authorization or order of, or
filing with, any Kansas court or governmental agency or body is required for
the making of the Guarantees by Falley's pursuant to the Indenture, except such
as may be required under state securities laws.