EXECUTION COPY
$100,000,000
OUTSOURCING SOLUTIONS INC.
11% Senior Subordinated Notes due 2006
Purchase Agreement
October 31, 1996
Xxxxxxx, Xxxxx & Co.
Xxxxx Securities Inc.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Outsourcing Solutions Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$100,000,000 principal amount of the Company's 11% Senior Subordinated Notes due
2006 (the "Securities"), which are for resale by the Purchasers to qualified
institutional buyers (within the meaning of Rule 144A ("Rule 144A") under the
Securities Act of 1933, as amended (the "Securities Act")) ("Qualified
Institutional Buyers") in reliance upon Rule 144A and to a limited number of
institutional accredited investors (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act ("Regulation D"))("Institutional Accredited
Investors"), and the remainder of the Securities is being offered by the
Purchasers through Xxxxxxx Xxxxx International and Chase Manhattan International
Limited, as their selling agents, outside the United States in reliance on
Regulation S under the Securities Act. The Company will offer and sell the
Securities (the "Offering") in connection with the acquisition (the "Payco
Acquisition") by the Company of Payco American Corporation ("Payco"). The
Securities and the Exchange Securities (as defined below) will be fully and
unconditionally guaranteed (the "Guarantees") as to payment of principal,
interest, liquidated damages, if any, and premium, if any, on an unsecured,
senior subordinated basis, jointly and severally by each of (i) the Company's
current Subsidiaries (as defined) and Payco and each of its current wholly-owned
domestic Subsidiaries (each a "Guarantor," and collectively, the "Guarantors")
and (ii) each future Restricted Subsidiary of the Company. Upon consummation of
the Payco Acquisition, each of the Guarantors will be a wholly-owned subsidiary
of the Company or a Guarantor.
It is understood by the parties that concurrently with the Offering and
the Payco Acquisition, the Company will enter into the following additional
transactions (together with the Offering and the Payco Acquisition, the
"Transactions"): (i) the Company will repay a portion of its existing
indebtedness and terminate its existing credit agreements and (ii) the Company
will execute the New Bank Credit Facility (as defined in the Offering Circular),
which will provide borrowing availability of up to $200.0 million. Consummation
of the Offering, the Payco Acquisition and the other Transactions are
conditioned upon each other.
Capitalized terms used herein and not otherwise defined are used as
defined in the Offering Circular (as defined below).
1. The Company and each of the Guarantors represents and warrants to, and
agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated October 14, 1996 (the
"Preliminary Offering Circular") and an offering circular, dated October
31, 1996 (the "Offering Circular"), in each case including the
international supplement thereto which is attached to and made a part of
the Preliminary Offering Circular and the Offering Circular, have been
prepared in connection with the offering of the Securities. Any reference
to the Preliminary Offering Circular or the Offering Circular shall be
deemed to refer to and include any Additional Issuer Information (as
defined in Section 5(f)) furnished by the Company prior to the completion
of the distribution of the Securities. Neither the Preliminary Offering
Circular nor the Offering Circular and any amendments or supplements
thereto did or will, as of their respective dates, 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company or any Guarantor by or on behalf of the Purchasers
expressly for inclusion in the Preliminary Offering Circular or the
Offering Circular or any amendments or supplements thereto.
(b) Assuming the Securities are issued, sold and delivered under the
circumstances contemplated by the Offering Circular and this Agreement,
that the representations and warranties and covenants of the Purchasers
contained in Section 3 hereof are true, correct and complete, and that the
Purchasers comply with their covenants in Section 3 hereof, (i)
registration under the Securities Act of the Securities or qualification
of the Indenture (as defined below) in respect of the Securities under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), is
not required in connection with the offer and sale of the Securities to
the Purchasers in the manner contemplated by the Offering Circular or this
Agreement and (ii) initial resales of the Securities by the Purchasers on
the terms and in the manner set forth in the Offering Circular and Section
3 hereof are exempt from the registration requirements of the Securities
Act.
(c) Subsequent to the respective dates as of which information is
given in the Offering Circular, except as set forth in the Offering
Circular, (i) neither the Company nor the Guarantors have incurred any
liabilities or obligations, direct or contingent, which are material,
individually or in the aggregate, to the Company and the Guarantors, nor
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entered into any transaction not in the ordinary course of business, (ii)
except as contemplated by the Offering Circular, there has not been any
decrease in the Company's or any Guarantor's capital stock or increase in
long-term debt or any payment of or declaration to pay any dividends or
other distribution with respect to the capital stock of the Company or any
Guarantor, (iii) neither the Company nor the Guarantors has sustained
since the date of the audited financial statements included in the
Offering Circular any material loss or interference with its business,
whether or not covered by insurance, otherwise than as set forth in or
contemplated by the Offering Circular and (iv) there has not been any
material adverse effect on the business, properties, results of
operations, prospects or condition (financial or otherwise) of the Company
and the Guarantors, taken as a whole (a "Material Adverse Effect").
(d) The Company and the Guarantors have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering
Circular or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company or the Guarantors; and any real property
and buildings held under lease by the Company or the Guarantors are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company or the
Guarantors;
(e) Each of the Company and the Guarantors has been duly
incorporated and is and (after giving effect to the Payco Acquisition)
will be validly existing in good standing under the laws of its respective
jurisdiction of incorporation, with power and authority (corporate or
partnership) to own its properties and conduct its business as described
in the Preliminary Offering Circular and the Offering Circular, is and
(after giving effect to the Payco Acquisition) will be duly qualified to
do business as a foreign corporation (or otherwise) and is in good
standing in all other jurisdictions where the ownership of its properties
or the conduct of its business requires such qualification, except where
the failure to be so qualified or in good standing would not have a
Material Adverse Effect.
(f) The Company and the Guarantors have all requisite corporate or
partnership power (as the case may be) and authority to execute, deliver
and perform their obligations under this Agreement, the Indenture, the
Securities, the Guarantees, the Registration Rights Agreement (as defined
below), the Exchange Securities and the New Bank Credit Agreement
(collectively, with the Acquisition Documents (as defined below), the
"Operative Documents") and the Agreement and Plan of Merger, dated as of
August 13, 1996, by and among the Company, Boxer Acquisition Corp. and
Payco American Corporation, and each other document entered into in
connection with the Payco Acquisition (collectively, as such documents are
amended prior to the date hereof, the "Acquisition Documents") to which
they are, or will be, a party and to consummate the transactions
contemplated hereby and thereby, including without limitation the
corporate power and authority to issue, sell and deliver the Securities
and the Exchange Securities and to issue the Guarantees of the Securities
and the Exchange Securities, as applicable, as provided herein and
therein;
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(g) Each of the Preliminary Offering Circular and the Offering
Circular, as of their respective dates, contains the information specified
in Rule 144A(d)(4) under the Securities Act.
(h) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock of
each of the Guarantors have been and (after giving effect to the Payco
Acquisition) will have been duly and validly authorized and issued, are
fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company or a Guarantor,
free and clear of all liens, encumbrances, equities or claims, except as
described in the Offering Circular;
(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the indenture to be dated the Time of Delivery (as defined below) (the
"Indenture") among the Company, the Guarantors and Wilmington Trust
Company, as trustee (the "Trustee"), under which they are to be issued,
which will be substantially in the form previously delivered to you; the
Indenture has been duly authorized and, when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and legally
binding instrument, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law); and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Circular and will be in substantially
the form previously delivered to you;
(j) This Agreement has been duly authorized, executed and delivered
by the Company and the Guarantors;
(k) The registration rights agreement (the "Registration Rights
Agreement"), to be dated the Time of Delivery, has been duly authorized by
the Company and the Guarantors and, when duly executed and delivered by
the Company and the Guarantors, will be the valid and legally binding
obligation of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and, as to
rights of indemnification or contribution, to principles of public policy
or federal or state securities laws relating thereto; pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein a registration statement under the
Securities Act relating to another series of debt securities of the
Company with terms substantially identical to the Securities (the
"Exchange Securities") to be offered in exchange for the Securities (the
"Exchange Offer"), and (ii) to the extent required by the Registration
Rights Agreement, a shelf registration statement pursuant to Rule 415
under the Securities Act relating to the resale by certain
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holders of the Securities, and to use their best efforts to cause such
registration statements to be declared effective; the Exchange Securities
have been duly and validly authorized for issuance by the Company, and
when issued and authenticated in accordance with the terms of the
Indenture and the Registration Rights Agreement, will be the valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity (whether considered in a proceeding in equity or at law);
(l) The New Bank Credit Agreement has been duly authorized and, when
duly executed and delivered by the Company, will be the valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency or other
similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(m) Each of the Acquisition Documents has been duly authorized by
the Company and the Guarantors party thereto and, when duly executed and
delivered by the Company and the Guarantors party thereto, will be the
valid and legally binding obligation of the Company and the Guarantors
party thereto, enforceable against the Company and the Guarantors party
thereto in accordance with its terms, except as the enforcement thereof
may be limited by applicable bankruptcy, reorganization, insolvency or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(n) The Guarantees of the Securities have been duly authorized by
each of the Guarantors and, when executed and delivered in accordance with
the terms of the Indenture and when the Securities have been issued and
authenticated in accordance with the terms of the Indenture and delivered
to and paid for by the Purchasers in accordance with the terms of this
Agreement, will be the valid and legally binding obligation of the
Guarantors, enforceable against the Guarantors in accordance with their
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency or other similar laws affecting
creditors' rights generally or by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law). The
Guarantees of the Securities, when issued, will conform in all material
respects to the description thereof in the Offering Circular;
(o) The Guarantees of the Exchange Securities have been duly
authorized by each of the Guarantors and, when executed and delivered in
accordance with the terms of the Indenture and when the Exchange
Securities are issued and authenticated in accordance with the terms of
the Indenture and the Registration Rights Agreement, will be the valid and
legally binding obligation of the Guarantors, enforceable against the
Guarantors in accordance with their terms, except as the enforcement
thereof may be limited by applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). The Guarantees of the
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Exchange Securities, when issued, will conform in all material respects to
the description thereof in the Offering Circular;
(p) Except as disclosed in the Preliminary Offering Circular and the
Offering Circular, there are and (after giving effect to the Payco
Acquisition) will be no outstanding (A) securities or obligations of the
Company or any of the Guarantors convertible into or exchangeable for any
capital stock of the Company or any such Guarantor, (B) warrants, rights
or options to subscribe for or purchase from the Company or any of the
Guarantors any such capital stock or any such convertible or exchangeable
securities or obligations, or (C) obligations of the Company or any of the
Guarantors to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
option;
(q) There are and (after giving effect to the Payco Acquisition)
will be no holders of securities of the Company or any of the Guarantors
who, by reason of the execution of this Agreement or any other Operative
Document by the Company or the Guarantors, as the case may be, or the
consummation of the transactions contemplated hereby and thereby, have the
right to request or demand the Company or any of the Guarantors to
register under the Securities Act or analogous foreign laws and
regulations any securities held by them (other than pursuant to the
Registration Rights Agreement);
(r) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(s) Prior to the date hereof, none of the Company, the Guarantors or
any of their affiliates has taken any action which is designed to or which
has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Securities;
(t) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities,
the Indenture, the Registration Rights Agreement, this Agreement and each
of the other Operative Documents and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, (A) any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of the
Guarantors is a party or by which the Company or any of the Guarantors is
bound or to which any of the property or assets of the Company or any of
the Guarantors is subject, (B) the provisions of the Certificate of
Incorporation, By-laws or partnership agreement (as applicable) of the
Company or any of the Guarantors or (C) (assuming compliance with all
applicable state securities or Blue Sky laws and assuming the accuracy of
the representations and warranties of the Purchasers contained herein) any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of the
Guarantors or any of their properties, except, in the case of clauses (A)
and (C), for such conflicts, breaches, violations or defaults as would not
have
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a Material Adverse Effect and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company and the Guarantors of the transactions
contemplated by this Agreement, the Indenture or any other Operative
Document, except for the filing of a registration statement by the Company
and the Guarantors with the Commission pursuant to the Securities Act
pursuant to Section 5(k) hereof and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers;
(u) Neither the Company nor any of the Guarantors is or (after
giving effect to the Payco Acquisition) will be in violation of its
Certificate of Incorporation, By-laws or partnership agreement (as
applicable) or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be bound,
except to the extent that such failure or default would not have a
Material Adverse Effect;
(v) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
the Guarantors is a party or of which any property of the Company or any
of the Guarantors is the subject which, if determined adversely to the
Company or any of the Guarantors, would individually or in the aggregate
have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(w) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system;
(x) Neither the Company nor any of the Guarantors is and (after
giving effect to the offering and sale of the Securities) will be an
"investment company", or an entity "controlled" by an "investment
company", as such terms are defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(y) None of the Company, the Guarantors or any person acting on its
or their behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or, with respect to the Securities sold outside
the United States to non-U.S. persons (as defined in Rule 902 under the
Securities Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act and the Company, any
affiliate of the Company and any person acting on its or their behalf has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902;
(z) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on behalf of the Company or any of
the Guarantors has offered or sold to any person any Securities, or any
securities of the same or a similar class as
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the Securities, other than the Securities offered or sold to the
Purchasers hereunder. The Company and the Guarantors will take reasonable
precautions designed to insure that any offer or sale, direct or indirect,
in the United States or to any U.S. person (as defined in Rule 902 under
the Securities Act) of any Securities or any substantially similar
security issued by the Company or the Guarantors, within six months
subsequent to the date on which the distribution of the Securities has
been completed (as notified to the Company by Xxxxxxx, Xxxxx & Co.), is
made under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act;
(aa) None of the Company, the Guarantors or any of their affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(ab) The consolidated historical financial statements, together with
related schedules and notes, set forth in the Preliminary Offering
Circular and the Offering Circular comply as to form in all material
respects with the requirements applicable to registration statements on
Form S-1 under the Securities Act and fairly present the consolidated
financial position of each of the Company (and Account Portfolios, L.P. as
predecessor) and its Subsidiaries and Payco and its Subsidiaries at the
respective dates indicated and the results of their operations and their
cash flows for the respective periods indicated, in accordance with
generally accepted accounting principles consistently applied throughout
such periods (except as otherwise disclosed therein). The pro forma
financial statements contained in the Offering Circular have been prepared
on a basis consistent with such historical statements, except for the pro
forma adjustments specified therein, and give effect to assumptions made
on a reasonable basis and reflect the proposed transactions contemplated
by this Agreement and the other Operative Documents. The other financial
and statistical information and data included in the Preliminary Offering
Circular and the Offering Circular, historical and pro forma, are, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company
and the Guarantors;
(ac) Deloitte & Touche LLP, Xxxxxxxxxx Xxxxx Xxxxx & Xxxxxx and
Xxxxxx Xxxxxxxx LLP, who have certified certain financial statements of
the Company and the Guarantors, are each independent public accountants as
required by the Securities Act and the rules and regulations of the
Commission thereunder;
(ad) The present fair saleable value of the assets of the Company
and the Guarantors, taken as a whole, exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including the maximum amount of liability that may reasonably
be expected to result from contingent liabilities) of the Company and the
Guarantors as they become absolute and matured. The assets of the Company
and the Guarantors, taken as a whole, do not constitute unreasonably small
capital to carry out their business as conducted or as proposed to be
conducted. The Company does not intend to, or believe that it will, incur
debts beyond its ability to pay such debts as they mature. The Company
does not intend to permit any of the Guarantors to incur debts beyond its
ability to pay such debts as they mature. Upon
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consummation of the Payco Acquisition and the closing of the New Bank
Credit Agreement and upon the issuance of the Securities and the
Guarantees, the present fair saleable value of the assets of the Company
and the Guarantors, taken as a whole, will exceed the amount that will be
required to be paid on or in respect of their existing debts and other
liabilities (including the maximum amount of liability that may reasonably
be expected to result from contingent liabilities) as they become absolute
and matured, and the assets of the Company and the Guarantors, taken as a
whole, will not constitute unreasonably small capital to carry out their
business as now conducted or as proposed to be conducted, including the
capital needs of the Company and the Guarantors, taking into account the
projected capital requirements and capital availability of the Company and
the Guarantors;
(ae) Each of the Company and the Guarantors has complied in all
respects with all laws, regulations and orders applicable to it or its
businesses the violation of which would have a Material Adverse Effect;
(af) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, (i) each of the Company and the Guarantors has
and (after giving effect to the Payco Acquisition) will have all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "Authorization") of and from,
and has and (after giving effect to the Payco Acquisition) will have made
all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, necessary or required to engage in the business
currently conducted by it in the manner described in the Offering
Circular; (ii) all such Authorizations are and (after giving effect to the
Payco Acquisition) will be valid and in full force and effect and (iii)
each of the Company and the Guarantors is and (after giving effect to the
Payco Acquisition) will be in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto;
(ag) Each of the Company and the Guarantors owns or possesses or has
and (after giving effect to the Payco Acquisition) will own, possess or
have the right to use the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively, the
"Intellectual Property") presently employed by it in connection with, and
material to, individually or in the aggregate, the operation of the
businesses now operated by it, and neither the Company nor any of the
Guarantors has received any notice of infringement of or conflict with
asserted rights of others with respect to the foregoing which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
The use of suchIntellectual Property in connection with the business and
operations of the Company and the Guarantors does not and (after giving
effect to the Payco Acquisition) will not infringe on the rights of any
person, except as would not, individually or in the aggregate, result in a
Material Adverse Effect;
(ah) All tax returns required to be filed by the Company or any of
the Guarantors in all jurisdictions have been timely and duly filed, other
than those filings being contested in good faith, except where the failure
to so file any such returns could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse
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Effect. There are no tax returns of the Company or any of the Guarantors
that are currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which the Company or any of
the Guarantors has received notice), where the findings of such audit, if
adversely determined, would result in a Material Adverse Effect. All
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest;
(ai) Each of the Company and the Guarantors maintains insurance
covering its properties, operations, personnel and businesses which
insures against such losses and risks as are adequate in accordance with
its reasonable business judgment to protect the Company and the Guarantors
and their businesses. Neither the Company nor the Guarantors has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in
force on the date hereof and will be outstanding and duly in force at the
Time of Delivery;
(aj) Except as disclosed in the Preliminary Offering Circular and
the Offering Circular (including, without limitation, the documents
incorporated by reference therein), there are no business relationships or
related party transactions which would be required to be disclosed therein
by Item 404 of Regulation S-K of the Commission and each business
relationship or related party transaction described therein is a fair and
accurate description of the relationships and transactions so described;
(ak) Each of the Company and the Guarantors is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any
Guarantor would have any liability; neither the Company nor any of the
Guarantors has incurred or expects to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or
any Guarantor would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification, except, in each case, as would
not have a Material Adverse Effect;
(al) There is (i) no material unfair labor practice complaint
pending against the Company or any of the Guarantors, or, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of the Guarantors, or, to the best knowledge of
the Company, threatened against any of them, (ii) no material strike,
labor dispute, slowdown or stoppage pending against the Company or any of
the Guarantors nor, to the best knowledge of the Company, threatened
against the Company or any of the Guarantors
10
and (iii) to the best knowledge of the Company, no union representation
question existing with respect to the employees of the Company or any of
the Guarantors and, to the best knowledge of the Company, no union
organizing activities are taking place, except, in each case, as would not
have a Material Adverse Effect;
(am) Each of the Company and the Guarantors is in material
compliance with all applicable federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants;
(an) None of the Company or the Guarantors, or, to the Company's
knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of the
Guarantors, has used any corporate funds during the last five years for
any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the Foreign Corrupt Practices Act
of 1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment, except such as would not have a
Material Adverse Effect;
(ao) Each of the Company and the Guarantors maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto;
(ap) Other than as contemplated by or described in this Agreement,
any other Operative Document and the Preliminary Offering Circular and the
Offering Circular, there is no broker, finder or other party that is
entitled to receive from the Company or any of the Guarantors any
brokerage or finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement or any of the Operative
Documents;
(aq) Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Purchasers or counsel for the Purchasers
shall be deemed to be a representation and warranty by the Company or such
Guarantor, as the case may be, to the Purchasers as to the matters covered
thereby; and
(ar) The Company has delivered to the Purchasers true and correct,
executed copies of each of the Operative Documents which has been executed
prior to or on the date hereof and there have been no amendments,
alterations, modifications or waivers thereto or in the exhibits or
schedules thereto other than those as to which the Purchasers shall
previously have been advised and shall not have reasonably objected after
being furnished a copy thereof.
11
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agree, to purchase from the Company, at a purchase price of 97% of the principal
amount thereof, plus accrued interest, if any, from October 31, 1996 to the Time
of Delivery hereunder, the principal amount of the Securities set forth opposite
the name of such Purchaser in Schedule I hereto.
3. Upon authorization by you of the release of the Securities, the
Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company and the
Guarantors that:
(a) It will offer and sell the Securities only to (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Securities Act in transactions meeting
the requirements of Rule 144A or, (ii) institutions which it reasonably
believes are "accredited investors" ("Institutional Accredited Investors")
within the meaning of Rule 501 under the Securities Act, which
institutions shall execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A to the
Offering Circular prior to their purchase of the Securities or, (iii) upon
the terms and conditions set forth in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor;
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Securities Act; and
(d) It is not acquiring the Securities with a view to any
distribution thereof that is part of a plan or scheme to evade the
registration requirements of the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian; provided, however, that such
Securities, if any, as Xxxxxxx, Xxxxx & Co. may request upon at least
forty-eight hours' prior to notice to the Company (such request to include the
authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form. The Company will deliver the
Securities to Xxxxxxx, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Company
in Federal (same day) funds by causing DTC to credit the Securities to the
account of Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Sachs & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"), or in the case of Securities in definitive certificated form, at the
offices of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
time and date of such delivery and payment shall be 9:30 a.m., New York City
time, on November 6, 1996 or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing. Such time and date are herein called
the "Time of Delivery."
12
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Sections 7(o) and 7(p) hereof, will be delivered at such
time and date at the offices of White & Case, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 4:00 p.m., New York City time, on the New
York Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. The Company and the Guarantors agree with each of the Purchasers:
(a) To prepare the Preliminary Offering Circular and the Offering
Circular in a form approved by you and not to amend or supplement the
Preliminary Offering Circular and the Offering Circular and any amendments or
supplements thereto unless the Purchasers shall previously have been advised
thereof and shall not have reasonably objected thereto within two business days
after being furnished a copy thereof, and to furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Company nor
any of the Guarantors shall be required to qualify as a foreign corporation, to
file a general consent to service of process or to subject itself to taxation in
excess of a nominal dollar amount in any jurisdiction;
(c) If, at any time prior to the expiration of nine months after the
date of the Offering Circular, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the Securities;
(e) Not to be or become, at any time prior to the expiration of
three years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end
13
investment company or face-amount certificate company that is or is required to
be registered under Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders from time to time of the
Securities, to furnish at its expense, upon request, to holders of the
Securities and prospective purchasers of Securities information (the "Additional
Issuer Information") satisfying the requirements of subsection (d)(4)(i) of Rule
144A under the Securities Act;
(g) To use its best efforts to cause such Securities to be eligible
for the PORTAL trading system of the National Association of Securities Dealers,
Inc.;
(h) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and cash flows of
the Company and the Guarantors certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and the Guarantors for such quarter in reasonable detail;
(i) During a period of five years from the date of the Offering
Circular (so long as any of the Securities or Exchange Securities remain
outstanding) to furnish to you copies of all reports or other communications
(financial or other) furnished to shareholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities or any class of securities of the Company or any
Guarantor is listed; and (ii) such additional information concerning the
business and financial condition of the Company or any Guarantor as you may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and the Guarantors
are consolidated in reports furnished to its shareholders generally or to the
Commission);
(j) During the period of three years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(k) The Company shall file and use its best efforts to cause to be
declared or become effective under the Securities Act, on or prior to 45 days
after the Time of Delivery, a registration statement on Form S-4 providing for
the registration of the Exchange Securities, and the exchange of the Securities
for the Exchange Securities, all in a manner which will permit persons who
acquire the Exchange Securities to resell the Exchange Securities pursuant to
Section 4(1) of the Securities Act; and
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds."
6. The Company and the Guarantors covenant and agree with each Purchaser
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and
14
expenses of the Company's and the Guarantors' counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation, printing and filing of the Preliminary Offering Circular
and the Offering Circular and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the
cost of printing or producing any agreement among Purchasers, this Agreement,
the Indenture, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; (vii) any
cost incurred in connection with the designation of the Securities for trading
in PORTAL and (viii) all other costs and expenses incident to the performance of
its obligations hereunder and under the Indenture, Registration Rights Agreement
and each other Operative Document which are not otherwise specifically provided
for in this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Purchasers will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Guarantors herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company and the Guarantors
shall have performed all of their respective obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and Xxxxxx & Xxxxxxx
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters.
(b) White & Case, counsel for the Company, shall have furnished to
you their written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
i. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as currently conducted;
ii. The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
iii. Each of the Guarantors has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of
15
incorporation and, to such counsel's knowledge, (except for (a) directors'
qualifying shares and (b) liens granted in connection with the New Bank
Credit Facility are owned directly or indirectly by the Company or a
Guarantor) free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or the Guarantors, provided
that such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
iv. The Company and each of the Guarantors has corporate or
partnership power and authority, as applicable, to execute, deliver and
perform this Agreement and the agreements contemplated herein, as
applicable, the Company has corporate power and authority to authorize,
issue, sell and deliver the Securities as contemplated by this Agreement
and each Guarantor has corporate or partnership power and authority to
authorize, issue and deliver its Guarantee as contemplated by this
Agreement;
v. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors;
vi. The Securities have been duly authorized by the Company,
and when duly executed, authenticated, issued and delivered by the Company
and paid for by the Purchasers in accordance with the terms of this
Agreement (assuming the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and delivery of the
Securities by the Trustee in accordance with the terms of the Indenture)
will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture and enforceable against
the Company in accordance with their terms, except as the enforcement
thereof may be limited by applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
vii. The Indenture has been duly authorized, executed and
delivered by the parties thereto and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes a valid and
legally binding instrument, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
viii. The Registration Rights Agreement has been duly
authorized by the Company and the Guarantors and is the valid and legally
binding obligation of the Company and the Guarantors, enforceable against
the Company and the Guarantors in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
16
ix. The Exchange Securities have been duly and validly
authorized for issuance by the Company, and when issued and authenticated
in accordance with the terms of the Indenture and the Registration Rights
Agreement, will be the valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, except as the enforcement
thereof may be limited by applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
x. The Guarantees of the Securities have been duly authorized
by each of the Guarantors and are the valid and legally binding obligation
of the Guarantors, enforceable against the Guarantors in accordance with
their terms, except as the enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or other similar laws
affecting creditors' rights generally or by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law);
xi. The Guarantees of the Exchange Securities have been duly
authorized by each of the Guarantors and, when executed and delivered in
accordance with the terms of the Indenture and when the Exchange
Securities are issued and authenticated in accordance with the terms of
the Indenture and the Registration Rights Agreement, will be the valid and
legally binding obligation of the Guarantors, enforceable against the
Guarantors in accordance with their terms, except as the enforcement
thereof may be limited by applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
xii. The New Bank Credit Agreement has been duly authorized
and is the valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
xiii. Each of the Acquisition Documents has been duly
authorized by the Company and the Guarantors party thereto and is the
valid and legally binding obligation of the Company and the Guarantors
party thereto, enforceable against the Company and the Guarantors party
thereto in accordance with its terms, except as the enforcement thereof
may be limited by applicable bankruptcy, reorganization, insolvency or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
xiv. The issue and sale of the Securities and the compliance
by the Company and the Guarantors with all of the provisions of the
Securities, the Guarantees, the Indenture, this Agreement, the
Registration Rights Agreement and each of the other Operative Documents
and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (A) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company or any of the Guarantors is a
party or by which the Company or any of the
17
Guarantors is bound or to which any of the property or assets of the
Company or any of the Guarantors is subject, (B) the Certificate of
Incorporation, By-laws (or similar organizational documents) of the
Company or any of the Guarantors or (C) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of the Guarantors or any of their properties,
except in the case of clauses (A) and (C), for such conflicts, breaches,
violations or defaults as would not have a Material Adverse Effect;
xv. To the knowledge of such counsel, no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company and the Guarantors of
the transactions contemplated by this Agreement, the Indenture, the
Registration Rights Agreement and each of the other Operative Documents,
except for the filing of a registration statement by the Company and the
Guarantors with the Commission pursuant to the Securities Act pursuant to
Section 5(k) hereof and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Purchasers;
xvi. The statements set forth in the Offering Circular under
the captions "Certain Relationships and Related Transactions--Acquisition
Arrangements," "--Advisory Services Agreement," "--Arrangements with
Certain Affiliates," "--Master Services Agreement," "Description of Notes"
and "Description of New Bank Credit Facility; Other Indebtedness," insofar
as they purport to constitute a summary of the terms of the Securities and
insofar as they purport to describe the provisions of legal documents, are
accurate summaries thereof in all material respects;
xvii. No registration of the Securities under the Securities
Act, and no qualification of an indenture under the Trust Indenture Act
with respect thereto, is required for the offer, sale and initial resale
of the Securities by the Purchasers in the manner contemplated by this
Agreement, in each case assuming (a) that the persons who buy the
Securities in the initial resale thereof are QIBs or Institutional
Accredited Investors or purchase such Securities outside the United States
in reliance on Regulation S under the Securities Act, (b) the accuracy of
the Purchasers' representations contained herein and those of the Company
contained in this Agreement regarding the absence of a general
solicitation in connection with the sale of the Securities to the
Purchasers and the initial resale thereof, and (c) the accuracy of the
representations and warranties made by each accredited investor as set
forth in the letters of representation executed by such accredited
investors in the form of Annex A to the Offering Circular;
xviii. Each of the Preliminary Offering Circular and the
Offering Circular, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and meets
the requirements of, Rule 144A(d)(4) under the Securities Act;
xix. Prior to the Exchange Offer or the effectiveness of the
Shelf Registration Statement, the Indenture is not required to be
qualified under the Trust Indenture Act;
18
xx. Neither the Company nor any of the Guarantors is an
"investment company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act; and
xxi. Although such counsel has not independently verified the
accuracy, completeness or fairness of such statements, such counsel does
not believe that the Preliminary Offering Circular and the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial statements
therein, as to which such counsel need express no opinion) contained as of
its date or contains as of the Time of Delivery an untrue statement of a
material fact or omitted or omits, as the case may be, to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, Deloitte & Touche LLP, Xxxxxx
Xxxxxxxx LLP and Xxxxxxxxxx Xxxxx Xxxxx & Xxxxxx shall have furnished to you
letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to you and your counsel.
(d) (i) Neither the Company nor any of the Guarantors shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of the Guarantors or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and the
Guarantors, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering of the Securities on
the terms and in the manner contemplated in this Agreement and in the Offering
Circular.
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities.
(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the NASDAQ National Market
("NASDAQ"); (ii) a general moratorium on commercial banking activities declared
by either federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iii) in the judgment of the Purchasers makes it
impracticable or inadvisable to proceed with the
19
offering of the Securities on the terms and in the manner contemplated hereby
and in the Offering Circular.
(g) The Securities have been designated for trading on PORTAL.
(h) The Company and the Guarantors shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the
Company and the Guarantors satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Guarantors herein at and
as of such Time of Delivery, as to the performance by the Company and the
Guarantors of all of their respective obligations hereunder to be performed at
or prior to such Time of Delivery, as to the matters set forth in the first
paragraph of this Section 7 and in subsections (d) and (e) of this Section 7 and
as to such other matters as you may reasonably request.
(i) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Purchasers shall have received counterparts,
conformed as executed thereof.
(j) The Company, the Guarantors and the Purchasers shall have
entered into the Registration Rights Agreement and the Purchasers shall have
received counterparts, conformed as executed, thereof.
(k) The Company and each other party thereto shall have entered into
the New Bank Credit Facility and the Purchasers shall have received
counterparts, conformed as executed, thereof and of all other documents and
agreements executed in connection therewith.
(l) There shall exist at and as of the Time of Delivery no
conditions that would constitute a default (or an event that with notice or the
lapse of time, or both would constitute a default) under the New Bank Credit
Facility. On the Closing Date, the New Bank Credit Facility shall be in full
force and effect and shall not have been modified.
(m) The Company shall have entered into each of the Acquisition
Documents, the form and substance of each of which shall be reasonably
acceptable to the Purchasers (provided that any Acquisition Document which was
entered into prior to the date of this Agreement shall be deemed acceptable to
the Purchasers in form and substance for purposes of this Section 7), and the
Purchasers shall have received counterparts, conformed as executed, thereof and
of all other documents and agreements entered into in connection therewith. Each
Acquisition Document shall be in full force and effect.
(n) The lenders under the Company's existing credit agreements shall
have delivered letters of satisfaction of discharge to the Company in connection
with the Company's repayment and termination of its existing credit agreements
and the Company shall have delivered such letters to the Purchasers.
(o) Xxxxxx & Xxxxxxx shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(p) Prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Purchasers such further information, certificates and
documents as the Purchasers may reasonably request.
20
8. (a) The Company and the Guarantors will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which it may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that neither
the Company nor any of the Guarantors shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Preliminary Offering Circular or the Offering Circular or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company or any of the Guarantors by or on behalf of
either Purchaser through Xxxxxxx, Sachs & Co. expressly for inclusion in the
Preliminary Offering Circular or the Offering Circular.
(b) Each Purchaser will, severally and not jointly, indemnify and
hold harmless the Company and the Guarantors against any losses, claims, damages
or liabilities to which the Company or any of the Guarantors may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact or necessary to make the statements
therein, in light of the circumstances under which they were made, 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 the Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser expressly
for inclusion in the Preliminary Offering Circular or the Offering Circular and
will reimburse the Company and the Guarantors for any legal or other expenses
reasonably incurred by the Company or the Guarantors in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any
21
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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 the
relative benefits received by the Company and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and Purchasers on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors on the one hand and Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
Offering of the Securities (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Purchasers, in each case as set forth in the Offering Circular. The relative
fault 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
and the Guarantors on the one hand or the Purchasers on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Guarantors and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions in respect of the Securities
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Securities Act; and the obligations of the Purchasers under this
Section 8 shall be in addition to any liability which the respective Purchaser
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and the Guarantors and to each person, if
any, who controls the Company and the
22
Guarantors within the meaning of the Securities Act. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to indemnification from any person who was not
guilty of such fraudulent misrepresentation.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Guarantors and the Purchasers, as
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
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company or any Guarantor or any officer or director or controlling person of the
Company or any Guarantor, and shall survive delivery of and payment for the
Securities.
23
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and the Guarantors shall not then be under any liability to any
Purchaser except as provided in Sections 6 and 8 hereof; but if for any other
reason the Securities are not delivered by or on behalf of the Company and the
Guarantors as provided herein, the Company and the Guarantors will reimburse the
Purchasers for all out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company and the
Guarantors shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Registration Department; and if to the Company or the
Guarantors shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company or the Guarantor, as the case may be, set forth in
the Offering Circular, provided, however, that any notice to an Purchaser
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Purchaser at its address set forth in its
Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by Xxxxxxx, Sachs & Co. upon request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and the
Guarantors and each person who controls the Company, any of the Guarantors or
any Purchaser, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
24
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Purchasers, the Company and the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Purchasers is pursuant to the
authority set forth in a form of Agreement among Purchasers, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
Outsourcing Solutions Inc.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
CFC Services Corp.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
A.M. Xxxxxx & Associates, Inc.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary
The Continental Alliance, Inc.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Alaska Financial Services, Inc.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
25
Southwest Credit Services, Inc.
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Assistant Secretary
Account Portfolios, Inc.
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Account Portfolios G.P., Inc.
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Account Portfolios, L.P.
By Account Portfolios G.P.,
Inc., its general partner
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Perimeter Credit, L.P.
By Account Portfolios G.P.,
Inc., its general partner
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
26
Gulf State Credit, L.P.
By Account Portfolios G.P.,
Inc., its general partner
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Chase Securities Inc.
By: /s/ Xxxxxxx, Xxxxx & Co.
------------------------------
(Xxxxxxx, Xxxxx & Co.)
Chase Securities Inc.
By: /s/ Xxx Xxxxxx
------------------------------
Name: Xxx Xxxxxx
Title: Managing Director
27
SCHEDULE I
Principal
Amount of
Securities
to be
Purchasers Purchased
---------
Xxxxxxx, Xxxxx & Co............................................ $ 70,000,000
Chase Securities Inc........................................... $ 30,000,000
Total......................................................... $ 100,000,000
1
ANNEX I
TERMS AND CONDITIONS OF SALES
UNDER REGULATION S UNDER THE SECURITIES ACT
1. The Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents that it has
offered and sold the Securities, and will offer and sell the Securities (i) as
part of their distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering and the Time of Delivery, only in
accordance with Rule 903 of Regulation S or, Rule 144A or pursuant to Paragraph
2 of this Annex I under the Securities Act. Accordingly, each Purchaser agrees
that neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A) or pursuant to Paragraph 2 of this Annex I, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases 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 (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 distribution at any time or (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 if available) under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
2. Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
3. Each Purchaser further represents and agrees that (i) it has not
offered or sold, and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (ii) it
has complied, and will comply, with all applicable provisions of the Financial
Services Xxx 0000 of Great Britain with respect to anything done by it 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
the United Kingdom, any document received by it in connection with the issuance
of the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
A-1
4. Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
A-2
