EXHIBIT 10.8
EXECUTION COPY
XXXXX INTERNATIONAL ENTERPRISES CORP.,
AS ISSUER
BLUE RIDGE TEXTILE MANUFACTURING, INC.,
CLEAN TOWEL SERVICE, INC.,
OHIO GARMENT RENTAL, INC. AND
MIDWAY-CTS BUFFALO, INC.,
AS SUBSIDIARY GUARANTORS
$75,000,000
11 1/4% SENIOR SUBORDINATED SECURITIES DUE 2008
PURCHASE AGREEMENT
DATED JUNE 23, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
FIRST UNION CAPITAL MARKETS, A DIVISION OF WHEAT FIRST SECURITIES, INC.
TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES..................................................... 2
No Registration Required.................................................................... 2
No Integration of Offerings or General Solicitation......................................... 3
Eligibility for Resale under Rule 144A...................................................... 3
The Offering Memorandum..................................................................... 3
The Purchase Agreement...................................................................... 3
The Registration Rights Agreement and the DTC Agreement..................................... 4
Authorization of the Securities and the Exchange Securities................................. 4
Authorization of the Indenture.............................................................. 5
Description of the Securities and the Indenture............................................. 5
No Material Adverse Change.................................................................. 5
Independent Accountants..................................................................... 5
Preparation of the Financial Statements..................................................... 5
Incorporation and Good Standing of the Company and its Subsidiaries......................... 6
Capitalization and Other Capital Stock Matters.............................................. 6
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required.. 6
No Material Actions or Proceedings.......................................................... 7
Intellectual Property Rights................................................................ 7
All Necessary Permits, etc.................................................................. 8
Title to Properties......................................................................... 8
Tax Law Compliance.......................................................................... 8
Company and Each Subsidiary Guarantor Not an 'Investment Company.'.......................... 8
Insurance................................................................................... 9
No Price Stabilization or Manipulation...................................................... 9
Company's Accounting System................................................................. 9
Compliance with Environmental Laws.......................................................... 9
Periodic Review of Costs of Environmental Compliance........................................ 10
ERISA Compliance............................................................................ 10
Solvency.................................................................................... 11
No Default in Indebtedness.................................................................. 11
Related Party Transactions.................................................................. 11
Industry Statistics......................................................................... 11
Credit Documents............................................................................ 11
Note and Warrant Repurchase Agreement....................................................... 11
Compliance with Regulation S................................................................ 12
Form of Regulation S Notes.................................................................. 12
SECTION 2. PURCHASE, SALE AND DELIVERY OF NOTES.............................................. 12
The Securities.............................................................................. 12
The Closing Date............................................................................ 12
Delivery of the Notes....................................................................... 13
Delivery of Offering Memorandum to the Initial Purchasers................................... 13
Initial Purchasers as Qualified Institutional Buyers........................................ 13
SECTION 3. ADDITIONAL COVENANTS.............................................................. 13
Initial Purchasers' Review of Proposed Amendments and Supplements........................... 13
Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters...... 13
Copies of the Offering Memorandum........................................................... 14
Blue Sky Compliance......................................................................... 14
Use of Proceeds............................................................................. 14
Ratings of the Notes........................................................................ 14
i
The Depositary.............................................................................. 15
Additional Issuer Information............................................................... 15
Agreement Not To Offer or Sell Additional Notes............................................. 15
Future Reports to the Initial Purchasers.................................................... 15
Registration Rights Agreement............................................................... 15
No Integration.............................................................................. 15
Restriction on Repurchases.................................................................. 16
Legended Notes.............................................................................. 16
PORTAL...................................................................................... 16
Form D...................................................................................... 16
Due Diligence............................................................................... 16
SECTION 4. PAYMENT OF EXPENSES................................................................ 17
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS............................ 17
Accountants' Comfort Letter................................................................. 17
No Material Adverse Change or Ratings Agency Change......................................... 17
Opinion of Counsel for the Company and the Subsidiary Guarantors............................ 18
Opinion of General Counsel for the Company and the Subsidiary Guarantors.................... 22
Opinion of Counsel for the Initial Purchasers............................................... 22
Officers' Certificate....................................................................... 23
Bring-down Comfort Letter................................................................... 23
PORTAL Listing.............................................................................. 23
Registration Rights Agreement............................................................... 23
Redemption of Notes and Warrants............................................................ 23
Additional Documents........................................................................ 23
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES...................................... 24
SECTION 7. OFFER, SALE AND RESALE PROCEDURES.................................................. 24
Offers and Sales only to Qualified Institutional Buyers or Regulation S Investors.......... 24
No General Solicitation..................................................................... 24
Purchases by Non-Bank Fiduciaries........................................................... 24
Restrictions on Transfer.................................................................... 24
Delivery of Offering Memorandum............................................................. 25
SECTION 8. INDEMNIFICATION.................................................................... 25
Indemnification of the Initial Purchasers................................................... 25
Indemnification of the Company and the Subsidiary Guarantors................................ 27
Notifications and Other Indemnification Procedures.......................................... 27
Settlements................................................................................. 28
SECTION 9. CONTRIBUTION....................................................................... 28
SECTION 10.TERMINATION OF THIS AGREEMENT...................................................... 30
SECTION 11.REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY................................ 30
SECTION 12.NOTICES............................................................................ 30
SECTION 13.SUCCESSORS......................................................................... 31
SECTION 14.PARTIAL UNENFORCEABILITY........................................................... 31
SECTION 15.GOVERNING LAW PROVISIONS........................................................... 31
Consent to Jurisdiction..................................................................... 31
Waiver of Immunity.......................................................................... 32
ii
SECTION 16. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS.......................... 32
SECTION 17. GENERAL PROVISIONS................................................................ 32
SCHEDULE A .................................................................................. 1
ANNEX I .................................................................................. 1
iii
PURCHASE AGREEMENT
June 23, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
FIRST UNION CAPITAL MARKETS, a division of Wheat First Securities, Inc.
As Initial Purchasers
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
INTRODUCTORY. Xxxxx International Enterprises Corp., a New York
corporation (the "Company"), proposes to issue and sell to the several Initial
Purchasers named in Schedule A (the "Initial Purchasers"), acting severally and
----------
not jointly, the respective amounts set forth in such Schedule A of an
----------
$75,000,000 aggregate principal amount of the Company's 11 1/4% Senior
Subordinated Notes due 2008 (the "Notes"). The Company's obligations under the
Notes, including the payment of principal of, premium and Liquidated Damages (as
defined in the Indenture), if any, and interest on the Notes will be
unconditionally guaranteed (the "Subsidiary Guarantees" and collectively with
the Notes, the "Securities") by Blue Ridge Textile Manufacturing, Inc., a
Georgia corporation, Clean Towel Service, Inc., a Georgia corporation, Ohio
Garment Rental, Inc., an Ohio corporation and Midway-CTS Buffalo, Ltd., a New
York corporation, and their respective successors and assigns (together with any
future subsidiary of the Company, each a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors"). NationsBanc Xxxxxxxxxx Securities
LLC and First Union Capital Markets, a division of Wheat First Securities, Inc.
have agreed to act as the several Initial Purchasers in connection with the
offering and sale of the Securities.
The Securities will be issued pursuant to an indenture dated as of
June 26, 1998 (the "Indenture") among the Company, the Subsidiary Guarantors and
IBJ Xxxxxxxx Bank & Trust Company, as trustee (the "Trustee"). Securities issued
in book-entry form will be issued in the name of Cede & Co., as nominee of The
Depositary Trust Company (the "Depositary") pursuant to a DTC Agreement, to be
dated as of the Closing Date (as defined in Section 2) (the "DTC Agreement"),
among the Company, the Subsidiary Guarantors, the Trustee and the Depositary.
The holders of the Securities will be entitled to the benefits of a
registration rights agreement to be dated as of June 26, 1998 (the "Registration
Rights Agreement," attached hereto as Exhibit "A"), among the Company, the
Subsidiary Guarantors and the Initial Purchasers, pursuant to which the Company
will agree to file, within 45 days of the Closing Date, a registration statement
with the Securities and Exchange Commission (the "Commission")
1
registering the Exchange Notes and the Exchange Subsidiary Guarantees (each as
defined in the Registration Rights Agreement and together, the "Exchange
Securities") under the Securities Act of 1933, as amended (the "Securities Act,"
which term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder).
The Company and the Subsidiary Guarantors understand that the Initial
Purchasers propose to make an offering of the Securities on the terms and in the
manner set forth herein and in the Offering Memorandum (as defined below) and
agree that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the "Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are to
be offered and sold to or through the Initial Purchasers without being
registered with the Commission under the Securities Act, in reliance upon
exemptions therefrom. The terms of the Securities and the Indenture will require
that investors that acquire Securities expressly agree that Securities may only
be resold or otherwise transferred, after the date hereof, if such Securities
are registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S")
thereunder).
The Company and the Subsidiary Guarantors have prepared and delivered
to each Initial Purchaser copies of an Offering Memorandum "subject to
completion" dated May 29, 1998 (the "Preliminary Offering Memorandum") and have
prepared and will deliver to each Initial Purchaser, on the date hereof or the
next succeeding day, copies of the Offering Memorandum dated June 23, 1998
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to herein, the Offering Memorandum of the Company and the
Subsidiary Guarantors dated June 23, 1998, including amendments or supplements
thereto and any exhibits thereto, in the most recent form that has been prepared
and delivered by the Company and the Subsidiary Guarantors to the Initial
Purchasers in connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering Memorandum or the
Offering Memorandum shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 3(f)) furnished by the Company or the
Subsidiary Guarantors prior to the completion of the distribution of the
Securities.
The Company and each Subsidiary Guarantor hereby jointly and severally
confirm their agreements with the Initial Purchasers as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company and each
Subsidiary Guarantor hereby jointly and severally represent, warrant and
covenant to each Initial Purchaser as follows:
(a) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section
2(e) hereof and with the procedures set forth in Section 7 hereof, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Securities Act or, until such time as the
Exchange Securities are issued, pursuant to an effective registration
statement, to qualify the Indenture under the Trust Indenture Act of 1939
(the "Trust Indenture Act", which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder).
2
(b) No Integration of Offerings or General Solicitation. The Company
and the Subsidiary Guarantors have not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any
United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require
the Securities to be registered under the Securities Act. None of the
Company, the Subsidiary Guarantors, their affiliates (as such term is
defined in Rule 501(b) under the Securities Act (each, an "Affiliate"), or
any person acting on their behalf (other than the Initial Purchasers, as to
whom the Company and the Subsidiary Guarantors make no representation or
warranty) has engaged or will engage, in connection with the offering of
the Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act. With respect to
those Securities sold in reliance upon Regulation S, (i) none of the
Company, the Subsidiary Guarantors, their Affiliates or any person acting
on their behalf (other than the Initial Purchasers, as to whom the Company
and the Subsidiary Guarantors make no representation or warranty) has
engaged or will engage in any directed selling efforts within the meaning
of Regulation S and (ii) each of the Company and their Affiliates and any
person acting on their behalf (other than the Initial Purchasers, as to
whom the Company and the Subsidiary Guarantors make no representation or
warranty) has complied and will comply with the offering restrictions set
forth in Regulation S.
(c) Eligibility for Resale under Rule 144A. Subject to compliance by
the Initial Purchasers with the representations and warranties set forth in
Section 2(e) hereof and with the procedures set forth in Section 7 hereof,
the Securities are eligible for resale pursuant to Rule 144A and will not
be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or quoted in a U.S.
automated interdealer quotation system.
(d) The Offering Memorandum. The Offering Memorandum does not, and
at the Closing Date will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through
NationsBanc Xxxxxxxxxx Securities LLC expressly for use in the Offering
Memorandum. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4). The Company and the
Subsidiary Guarantors have not distributed and will not distribute, prior
to the later of the Closing Date and the completion of the Initial
Purchasers' distribution of the Securities, any offering material in
connection with the offering and sale of the Securities other than a
Preliminary Offering Memorandum or the Offering Memorandum.
(e) The Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company and the Subsidiary Guarantors, enforceable in accordance with its
terms, except as rights to indemnification and contribution hereunder may
be limited by applicable law or public policy and except as the enforcement
hereof may be limited by bankruptcy, insolvency,
3
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(f) The Registration Rights Agreement and the DTC Agreement. At the
Closing Date, each of the Registration Rights Agreement and the DTC
Agreement will be duly authorized, executed and delivered by, and will be a
valid and binding agreement of, the Company and the Subsidiary Guarantors,
enforceable in accordance with its terms, except as rights to
indemnification and contribution may be limited by applicable law or public
policy and except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(g) Authorization of the Securities and the Exchange Securities. (i)
The Notes to be purchased by the Initial Purchasers from the Company are in
the form contemplated by the Indenture, have been duly authorized for
issuance and sale pursuant to this Agreement and the Indenture and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor, will constitute valid and
binding agreements of the Company, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture; (ii) the
Exchange Notes have been duly and validly authorized for issuance by the
Company, and when issued and authenticated in accordance with the terms of
the Indenture, the Registration Rights Agreement and the Exchange Offer (as
defined in the Registration Rights Agreement), will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled to the
benefits of the Indenture; (iii) the Subsidiary Guarantees are in the form
contemplated by the Indenture, have been duly authorized for issuance and
sale pursuant to this Agreement and the Indenture and, at the Closing Date,
will have been duly executed by each of the Subsidiary Guarantors and, when
authenticated in the manner provided for in the Indenture and delivered
against payment of the purchase price for the Securities, will constitute
valid and binding agreements of the Subsidiary Guarantors, enforceable in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and will be entitled to the benefits of
the Indenture; and (iv) the Exchange Subsidiary Guarantees have been duly
authorized for issuance and exchange pursuant to the Indenture, the
Registration Rights Agreement and the Exchange Offer and, when duly
executed by each of the Subsidiary Guarantors and authenticated in the
manner provided for in the Indenture and delivered in exchange for the
Subsidiary Guarantees, will constitute valid and binding agreements of the
Subsidiary Guarantors, enforceable in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles and
will be entitled to the benefits of the Indenture.
4
(h) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and the Subsidiary Guarantors and, at the Closing
Date, will have been duly executed and delivered by the Company and the
Subsidiary Guarantors and will constitute a valid and binding agreement of
the Company and the Subsidiary Guarantors, enforceable against the Company
and the Subsidiary Guarantors in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(i) Description of the Securities and the Indenture. The Securities,
the Exchange Securities and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Offering Memorandum and will be in the respective forms previously
delivered to the Initial Purchasers.
(j) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum: (i) there has been no
material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course
of business, of the Company and its subsidiaries, considered as one entity
(any such change is called a "Material Adverse Change"); (ii) the Company
and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in
the ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; and (iii) there has
been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries,
any of its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of
capital stock.
(k) Independent Accountants. Coopers & Xxxxxxx, L.L.P., who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related Securities thereto)
filed with the Commission included in the Offering Memorandum are
independent public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act.
(l) Preparation of the Financial Statements. The financial
statements, (including the notes thereto) included in the Offering
Memorandum present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries as of and at the
dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related Securities thereto. The financial data set
forth in the Offering Memorandum under the captions "Summary--Summary
Unaudited As Adjusted Financial Information," "Summary--Summary Financial
Information," "Selected Financial and Operating Data" and "Capitalization"
fairly present in all material respects the information set forth therein
on a basis consistent with that of the audited financial statements
contained in the Offering Memorandum. The Company's ratios of earnings to
fixed charges set forth in the Offering Memorandum under the captions
"Summary--Summary Financial Information"
5
and "Selected Financial and Operating Data" have been calculated in
compliance with Item 503(d) of Regulation S-K under the Securities Act.
(m) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and to enter into and
perform its obligations under each of this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Securities, the Exchange
Securities, the Indenture, the Credit Agreement, dated as of June 26, 1998,
among the Company, certain of its subsidiaries and NationsBank, N.A. (the
"Credit Agreement") and all documents and instruments ancillary to the
Credit Agreement (together with the Credit Agreement, the "Credit
Documents") and that certain letter agreement, dated as of June 23, 1998,
between the Company and Capital Resource Lenders II, LP and Exeter Venture
Lenders, LP (the "Note and Warrant Repurchase Agreement"). Each of the
Company and its subsidiaries is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change. All of the issued and outstanding capital stock of each subsidiary
has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim. The Company does not own or control, directly
or indirectly, any corporation, association or other entity other than the
Subsidiary Guarantors.
(n) Capitalization and Other Capital Stock Matters. At April 30,
1998, on a consolidated basis, after giving pro forma effect to the
issuance and sale of the Securities pursuant hereto, initial borrowings
under the Credit Documents and the application of the proceeds therefrom
(in each case as described in the Offering Memorandum), the Company would
have an authorized and outstanding capitalization as set forth in the
Offering Memorandum under the caption "Capitalization". The Company's
capital stock conforms in all material respects to the description thereof
set forth in the Offering Memorandum. All of the outstanding shares of the
Company's capital stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with
federal and state securities laws. None of the outstanding shares of the
Company's capital stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company or the Subsidiary Guarantors. There are
no authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the Company or any of its subsidiaries other than those accurately
described in the Offering Memorandum.
(o) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or is in default
(or, with the giving of notice or lapse of time, would be in default)
("Default") under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the
6
property or assets of the Company or any of its subsidiaries is subject
(each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The
Company's and its subsidiaries' execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the DTC Agreement, the
Indenture, the Credit Documents and the Note and Warrant Repurchase
Agreement and the issuance and delivery of the Securities or the Exchange
Securities, and consummation of the transactions contemplated hereby and
thereby (i) have been duly authorized by all necessary corporate action and
will not result in any violation of the provisions of the charter or by-
laws of the Company or any subsidiary, (ii) after giving effect to the
application of the proceeds from sale of the Notes as described in the
Offering Memorandum will not conflict with or constitute a breach of, or
Default or a Debt Repayment Triggering Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, Debt Repayment
Triggering Events, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or
any subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's or its subsidiaries'
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Indenture, the Credit Documents or
the Note and Warrant Repurchase Agreement or the issuance and delivery of
the Securities or the Exchange Securities, or consummation of the
transactions contemplated hereby and thereby, except such as have been
obtained or made by the Company and its subsidiaries and are in full force
and effect under the applicable state securities or blue sky laws, and with
respect to the Registration Rights Agreement, the Securities Act and
applicable state securities or blue sky laws. As used herein, a "Debt
Repayment Triggering Event" means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries.
(p) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's and the Subsidiary Guarantors' collective knowledge, threatened
(i) against or affecting the Company or any of its subsidiaries, (ii) which
has as the subject thereof any officer or director of, or property owned or
leased by, the Company or any of its subsidiaries or (iii) relating to
environmental or discrimination matters, where in any such case (A) there
is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's and the Subsidiary
Guarantors' collective knowledge, is threatened or imminent.
(q) Intellectual Property Rights. The Company and its subsidiaries
own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals,
7
trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Neither the Company
nor any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.
(r) All Necessary Permits, etc. The Company and each subsidiary
possess such valid and current material certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses, and
neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-
compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse Change.
(s) Title to Properties. The Company and each of its subsidiaries
has good and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(l) above (or
elsewhere in the Offering Memorandum), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such (i) as are reflected in the Offering Memorandum
(including the financial statements and notes thereto included therein) or
(ii) as do not materially and adversely affect the value of such property
and do not materially interfere with the use made or proposed to be made of
such property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(t) Tax Law Compliance. The Company and its subsidiaries have filed
all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes
required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them (except such
as are being contested in good faith and by appropriate proceedings and
have been properly reserved for in accordance with GAAP). The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(l) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to which
the tax liability of the Company or any of its subsidiaries has not been
finally determined.
(u) Company and Each Subsidiary Guarantor Not an "Investment
Company."`' The Company and the Subsidiary Guarantors have been advised of
the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). Neither the Company nor any of the
Subsidiary Guarantors is, and after receipt of payment for the Securities,
initial borrowings under the Credit Documents and the application of the
proceeds therefrom (in each case as described in the Offering Memorandum)
will not be, an "investment company" within the meaning of the Investment
Company Act and will conduct its business in a manner so that it will not
become subject to the Investment Company Act.
8
(v) Insurance. Each of the Company and its subsidiaries are insured
by recognized, financially sound institutions with policies in such amounts
and with such deductibles and covering such risks as are generally deemed
adequate and customary for their businesses including, but not limited to,
policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction and acts of
vandalism. The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now conducted and at a cost that would not result in a Material Adverse
Change. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(w) No Price Stabilization or Manipulation. Except as may be
permitted by applicable federal or state securities laws, neither the
Company nor any of the Subsidiary Guarantors has taken and will not take,
directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price
of any security of the Company or any of the Subsidiary Guarantors to
facilitate the sale or resale of the Securities.
(x) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(y) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively,
"Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its
subsidiaries under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Company or any of its
subsidiaries received since January 1, 1995 any written communication,
whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company or any of its subsidiaries is in
violation of any Environmental Law; (ii) there is no claim, action or cause
of action filed with a court or governmental authority, no investigation
with respect to which the Company or any of its subsidiaries has received
written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs,
9
cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising
out of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its subsidiaries, now or
since January 1, 1995 (collectively, "Environmental Claims"), pending or,
to the best of the Company's and the Subsidiary Guarantors' collective
knowledge, threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's and the Subsidiary
Guarantors' collective knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries or
against any person or entity whose liability for any Environmental Claim
the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law.
(z) Periodic Review of Costs of Environmental Compliance. In the
ordinary course of its business, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and properties
of the Company and its subsidiaries, in the course of which it identifies
and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such review
and the amount of its established reserves, the Company has reasonably
concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Change.
(aa) ERISA Compliance. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, its subsidiaries or their "ERISA Affiliates" (as
defined below) are in compliance in all material respects with ERISA.
"ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b), (c), (m)
or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "Code") of which
the Company or such subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates which could
reasonably be expected to result in a Material Adverse Change. No "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA) which could reasonably be expected to result in a
Material Adverse Change. Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any
liability which could reasonably be expected to result in a Material
Adverse Change under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each "employee
10
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss
of such qualification. The forgoing representations and warranties shall be
deemed to have been made to the best of the Company's knowledge to the
extent such representations and warranties apply to any "multiemployer
plan" (as defined in ERISA or the Code) to which the Company, its
subsidiaries or any of their ERISA affiliates contribute or have
obligations to contribute.
(bb) Solvency. The Company and the Subsidiary Guarantors are, and
immediately after the Closing Date on a consolidated basis, will be,
Solvent. As used herein, the term "Solvent" means, with respect to the
Company and the Subsidiary Guarantors on a particular date, that on such
date (i) the fair market value of the assets of the Company and the
Subsidiary Guarantors on a consolidated basis is greater than the total
amount of respective liabilities (including contingent liabilities) of the
Company and the Subsidiary Guarantors on a consolidated basis, (ii) the
present fair salable value of the assets of the Company and the Subsidiary
Guarantors on a consolidated basis is greater than the amount that will be
required to pay the respective probable liabilities of the Company and the
Subsidiary Guarantors on their debts on a consolidated basis as they become
absolute and matured, (iii) the Company and the Subsidiary Guarantors are
able to realize upon their respective assets and pay their debts and other
liabilities on a consolidated basis, including contingent obligations on a
consolidated basis, as they mature and (iv) the Company and the Subsidiary
Guarantors do not have unreasonably small capital on a consolidated basis.
(cc) No Default in Indebtedness. No event of default exists under any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument constituting Indebtedness (as defined in the
Indenture) except for such events of default as could not, individually or
in the aggregate, be reasonably expected to result in a Material Adverse
Change.
(dd) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person that would be required to be described in the Offering
Memorandum were it a prospectus to be filed as a part of a Registration
Statement on Form S-1 under the Securities Act, which have not been
described as would have been so required.
(ee) Industry Statistics. The market-related and customer-related data
and estimates included in the Offering Memorandum are based on or derived
from sources which the Company and the Subsidiary Guarantors believe to be
reliable and accurate.
(ff) Credit Documents. The Credit Documents have been duly and validly
authorized by the Company and its subsidiaries party thereto and, when duly
executed and delivered by the Company and its subsidiaries party thereto,
will be the valid and legally binding obligation of the Company and its
subsidiaries party thereto, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(gg) Note and Warrant Repurchase Agreement. The Note and Warrant
Repurchase Agreement has been duly and validly authorized by the Company
and,
11
when duly executed and delivered by the Company, will be the valid and
legally binding obligation of the Company, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(hh) Compliance with Regulation S. The Company, the Subsidiary
Guarantors and their respective affiliates and all persons acting on their
behalf (other than the Initial Purchasers, as to whom the Company and the
Subsidiary Guarantors make no representation) have complied with and will
comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Securities outside the United States
and, in connection therewith, the Offering Memorandum contains the
disclosure required by Rule 902(g).
(ii) Form of Regulation S Securities. The Securities sold in reliance
on Regulation S will be represented upon issuance by a temporary global
security that may not be exchanged for definitive securities until the
expiration of the 40-day restricted period referred to in Rule 903(b)(3) of
the Securities Act and only upon certification of beneficial ownership of
such Securities by non-U.S. persons or U.S. persons who purchased such
Securities in transactions that were exempt from the registration
requirements of the Securities Act.
Any certificate signed by an officer of the Company or any Subsidiary
Guarantor and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by
the Company or such Subsidiary Guarantor to each Initial Purchaser as to
the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES .
(a) The Securities. The Company and the Subsidiary Guarantors jointly
and severally agree to issue and sell to the several Initial Purchasers,
severally and not jointly, all of the Securities upon the terms herein set
forth. On the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein
set forth, the Initial Purchasers agree, severally and not jointly, to
purchase from the Company and the Subsidiary Guarantors the aggregate
principal amount of Securities set forth opposite their names on Schedule
--------
A, at a discounted purchase price of 2.75% of the principal amount thereof
-
payable on the Closing Date.
(b) The Closing Date. Delivery of certificates for the Securities in
definitive form to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of NationsBanc Xxxxxxxxxx Securities
LLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx (or such other place
as may be agreed to by the Company and the Initial Purchasers) at 9:00 a.m.
Charlotte time, on June 26, 1998 or such other time and date not later than
12:30 p.m., Charlotte time, on July 1, 1998 as the Initial Purchasers shall
designate by notice to the Company (the time and date of such closing are
called the "Closing Date"). Delivery of all closing documents shall be
made at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX on
the Closing Date. The Company and the Subsidiary Guarantors hereby
acknowledge that circumstances under which the Initial Purchasers may
provide notice to postpone the Closing Date as originally scheduled
include, but are in no way limited to, any determination by the Company or
the Initial Purchasers to recirculate to investors copies of an amended or
supplemented
12
Offering Memorandum or a delay as contemplated by the provisions of Section
16 of this Agreement.
(c) Delivery of the Securities. The Company and the Subsidiary
Guarantors shall deliver, or cause to be delivered, to NationsBanc
Xxxxxxxxxx Securities LLC for the accounts of the several Initial
Purchasers certificates for the Securities at the Closing Date against the
irrevocable release of a wire transfer of immediately available (federal,
same-day) funds for the amount of the purchase price therefor. The
certificates for the Securities shall be in such denominations ($1,000 or
integral multiples thereof) and registered in the name of Cede & Co., as
nominee of the Depositary, pursuant to the DTC Agreement and shall be made
available for inspection on the business day preceding the Closing Date at
a location in New York City as the Initial Purchasers may designate. Time
shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Initial
Purchasers.
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not
later than 6:00 p.m. on the next succeeding business day following the date
of this Agreement, the Company shall deliver or cause to be delivered
copies of the Offering Memorandum in such quantities and at such places as
the Initial Purchasers shall reasonably request.
(e) Initial Purchasers as Qualified Institutional Buyers. Each
Initial Purchaser severally and not jointly represents and warrants to, and
agrees with, the Company and the Subsidiary Guarantors that it is a
"qualified institutional buyer" within the meaning of Rule 144A (a
"Qualified Institutional Buyer") and an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act (an "Accredited Investor").
SECTION 3. ADDITIONAL COVENANTS. The Company and each Subsidiary
Guarantor jointly and severally further covenant and agree with each Initial
Purchaser as follows:
(a) Initial Purchasers' Review of Proposed Amendments and
Supplements'. Prior to amending or supplementing the Offering Memorandum,
the Company shall furnish to the Initial Purchasers for review a copy of
each such proposed amendment or supplement, and the Company shall not
effect any such proposed amendment or supplement to which the Initial
Purchasers reasonably object.
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, prior to the completion of the placement of the
Securities by the Initial Purchasers with the Subsequent Purchasers (as
evidenced by a notice in writing from the Initial Purchasers to the
Company), any event shall occur or condition exist as a result of which it
is necessary, in the opinion of counsel for the Initial Purchasers, to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, not misleading, or if in the opinion of counsel
for the Initial Purchasers it is otherwise necessary to amend or supplement
the Offering Memorandum to comply with law, the Company and the Subsidiary
Guarantors jointly and severally agree to promptly prepare (subject to
Section 3(a) hereof) and furnish (at their own expense) to the Initial
Purchasers, amendments or supplements to the Offering Memorandum so that
the statements in the Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering Memorandum,
as amended or supplemented, will comply with law.
13
Following the consummation of the Exchange Offer or the effectiveness
of an applicable shelf registration statement and for so long as the
Securities and the Exchange Securities are outstanding if, in the opinion
of counsel to the Initial Purchasers, the Initial Purchasers or any of
their affiliates (as such term is defined in the rules and regulations
under the Securities Act) are required to deliver a prospectus in
connection with sales of, or market-making activities with respect to, such
securities, (A) to periodically amend the applicable registration statement
so that the information contained therein complies with the requirements of
Section 10(a) of the Securities Act, (B) to amend the applicable
registration statement or supplement the related prospectus or the
documents incorporated therein when necessary to reflect any material
changes in the information provided therein so that the registration
statement and the prospectus will not contain any 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 existing as of
the date the prospectus is so delivered, not misleading and (C) to provide
the Initial Purchasers with copies of each amendment or supplement filed
and such other documents as the Initial Purchasers may reasonably request.
The Company and each Subsidiary Guarantor hereby expressly acknowledge
that the indemnification and contribution provisions of Sections 8 and 9
hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in
this Section 3(b).
(c) Copies of the Offering Memorandum. The Company agrees to furnish
the Initial Purchasers, without charge, as many copies of the Offering
Memorandum and any amendments and supplements thereto as they shall have
reasonably requested.
(d) Blue Sky Compliance. The Company and each Subsidiary Guarantor
shall cooperate with the Initial Purchasers and counsel for the Initial
Purchasers to qualify or register the Securities for sale under (or obtain
exemptions from the application of) state securities or blue sky laws of
those jurisdictions designated by the Initial Purchasers, shall comply with
such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities. Neither the Company nor any Subsidiary Guarantor shall be
required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Initial
Purchasers promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Securities for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company and
each Subsidiary Guarantor shall use their respective best efforts to obtain
the withdrawal thereof at the earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds from
the sale of the Securities sold by it in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
(f) Ratings of the Securities. The Company and each Subsidiary
Guarantor shall take all reasonable action necessary to enable Standard &
Poor's Ratings Group, a division of McGraw Hill, Inc. ("S&P"), and Xxxxx'x
Investors Service, Inc. ("Moody's") to provide their respective credit
ratings of the Securities.
14
(g) The Depositary. The Company and each Subsidiary Guarantor will
cooperate with the Initial Purchasers and use their best efforts to permit
the Securities to be eligible for clearance and settlement through the
facilities of the Depositary.
(h) Additional Issuer Information. At any time when the Company and
the Subsidiary Guarantors are not subject to Section 13 or 15(d) of the
Exchange Act, and for so long as any Securities outstanding constitute
Transfer Restricted Securities as defined in the Registration Rights
Agreement, for the benefit of holders and beneficial owners from time to
time of Securities, the Company and the Subsidiary Guarantors shall
furnish, at their expense, upon request, to holders and beneficial owners
of Securities and prospective purchasers of Securities information
("Additional Issuer Information") satisfying the requirements of subsection
(d)(4) of Rule 144A.
(i) Agreement Not To Offer or Sell Additional Securities During the
period of 180 days following the date of the Offering Memorandum, the
Company will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities LLC (which consent may be withheld at the sole
discretion of NationsBanc Xxxxxxxxxx Securities LLC), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the meaning
of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any debt securities of the Company
or securities exchangeable for or convertible into debt securities of the
Company (other than as contemplated by this Agreement or the Offering
Memorandum and to register the Exchange Securities).
(j) Future Reports to the Initial Purchasers. During the period of
five years hereafter the Company will furnish to NationsBanc Xxxxxxxxxx
Securities LLC at 000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, and to First Union Capital Markets, 000 Xxxxx
Xxxxxxx Xxxxxx, XX-00, Xxxxxxxxx, XX 00000 Attention: Xxxx Xxxx (i) as soon
as practicable after the end of each fiscal year, copies of any annual
report delivered to the holders of any of the Issuer's securities (an
"Annual Report") of the Company containing the consolidated balance sheet
of the Company and its subsidiaries as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public or
certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of any proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company or any Subsidiary Guarantor with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of
any report or communication of the Company or any Subsidiary Guarantors
mailed generally to holders of their respective capital stock or debt
securities (including the holders of the Securities or Exchange
Securities).
(k) Registration Rights Agreement. The Company and the Subsidiary
Guarantors shall comply with all provisions and obligations of, and shall
cause the Exchange Offer to be made in the appropriate form as contemplated
by, the Registration Rights Agreement, and shall comply with all applicable
federal and state securities laws in connection with the Exchange Offer.
(l) No Integration. Each of the Company and the Subsidiary Guarantors
agrees that it will not and will cause its Affiliates not to make any offer
or sale of securities of the Company of any class if, as a result of the
doctrine of "integration"
15
referred to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of (i) the sale of the Securities by the
Company and the Subsidiary Guarantors to the Initial Purchasers, (ii) the
resale of the Securities by the Initial Purchasers to Subsequent Purchasers
or (iii) the resale of the Securities by such Subsequent Purchasers to
others) the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(m) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities, the Company and the
Subsidiary Guarantors will not, and will cause their respective Affiliates
not to, purchase or agree to purchase or otherwise acquire any Securities
which are "restricted securities" (as such term is defined under Rule
144(a)(3) under the Securities Act), whether as beneficial owner or
otherwise (except as agent acting as a securities broker on behalf of and
for the account of customers in the ordinary course of business in
unsolicited broker's transactions) unless, immediately upon any such
purchase, the Company or any Subsidiary Guarantor or any Affiliate shall
submit such Securities to the Trustee for cancellation.
(n) Legended Securities. Each certificate for a Security will bear
the legend contained in "Notice to Investors" in the Offering Memorandum
for the time period and upon the other terms stated in the Offering
Memorandum.
(o) PORTAL. The Company and the Subsidiary Guarantors will use their
best efforts to cause the Securities to be eligible for the National
Association of Securities Dealers, Inc. PORTAL market (the "PORTAL
market").
(p) Form D. If required under Rule 503 of the Securities Act, the
Company and the Subsidiary Guarantors will file with the Commission, not
later than 15 days after the Closing Date, five copies of a notice on Form
D under the Securities Act (one of which will be manually signed by a
person duly authorized by the Company); will otherwise comply with the
requirements of Rule 503 under the Securities Act; and will furnish
promptly to the Initial Purchasers evidence of each such required timely
filing (including a copy thereof).
(q) Due Diligence. In connection with the original distribution of
the Securities, the Company and each of the Subsidiary Guarantors agree
that, prior to any offer or resale of the Securities by the Initial
Purchasers, the Initial Purchasers and counsel for the Initial Purchasers
shall have the right to make reasonable inquiries into the business of the
Company and its subsidiaries. The Company and each of the Subsidiary
Guarantors also agree to provide answers to each prospective Subsequent
Purchaser of Securities who so requests concerning the Company and its
subsidiaries (to the extent that such information is available or can be
acquired and made available to prospective Subsequent Purchasers without
unreasonable effort or expense and to the extent the provision thereof is
not prohibited by applicable law) and the terms and conditions of the
offering of the Securities, as provided in the Offering Memorandum.
NationsBanc Xxxxxxxxxx Securities LLC, on behalf of the Initial
Purchasers, may, in its sole discretion, waive in writing the performance by the
Company or any Subsidiary Guarantor of any one or more of the foregoing
covenants or extend the time for their performance.
16
SECTION 4. PAYMENT OF EXPENSES. The Company and the Subsidiary
Guarantors jointly and severally agree to pay all costs, fees and expenses
incurred in connection with the performance of their obligations hereunder and
in connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the
Securities (including all printing and engraving costs), (ii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Securities to the Initial Purchasers, (iii) all fees and expenses of the
Company's and the Subsidiary Guarantors' counsel, independent public or
certified public accountants and other advisors, (iv) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of each preliminary Offering Memorandum and the Offering Memorandum
(including financial statements and exhibits), and all amendments and
supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the DTC Agreement, the Securities and the Exchange Securities, (v)
all filing fees, attorneys' fees and expenses incurred by the Company or the
Subsidiary Guarantors or the Initial Purchasers (attorney's fees of the Initial
Purchasers shall be $7,500) in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Securities for offer and sale under the state securities or blue sky laws
and, if requested by the Initial Purchasers, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising the Initial
Purchasers of such qualifications, registrations and exemptions, (vi) the fees
and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with any ratings agencies and the listing
of the Securities with the PORTAL market, (viii) all fees and expenses
(including reasonable fees and expenses of counsel) of the Company and the
Subsidiary Guarantors in connection with approval of the Securities by DTC for
"book-entry" transfer, and (ix) the performance by the Company and the
Subsidiary Guarantors of their other obligations under this Agreement. Except
as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Initial Purchasers shall pay their own expenses, including the fees and
disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Subsidiary Guarantors set forth in Section 1 hereof as of the date hereof
and as of the Closing Date as though then made and to the timely performance by
the Company and the Subsidiary Guarantors of their covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Initial
Purchasers shall have received from Coopers & Xxxxxxx, L.L.P., independent
public or certified public accountants for the Company, a letter dated the
date hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountant's "comfort
letters" to Initial Purchasers, delivered according to Statement of
Auditing Standards Nos. 72 and 76 (or any successor bulletins), with
respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement and the
Offering Memorandum.
(b) No Material Adverse Change or Ratings Agency Change. For the
period from and after the date of this Agreement and prior to the Closing
Date:
17
(i) in the judgment of the Initial Purchasers there shall not
have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or
any of its subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(c) Opinion of Counsel for the Company and the Subsidiary Guarantors.
On the Closing Date the Initial Purchasers shall have received the
favorable opinion of Blank Rome Xxxxxxx & XxXxxxxx LLP, counsel for the
Company and the Subsidiary Guarantors, dated as of such Closing Date, in
form and substance satisfactory to you, to the effect that:
(i) each of the Company and the Subsidiary Guarantors has been
organized and is validly subsisting as a corporation under the laws of the
jurisdiction of its incorporation;
(ii) each of the Company and the Subsidiary Guarantors has
corporate power and authority to own, lease and operate its respective
properties and to conduct its respective business as described in the
Offering Memorandum and to enter into and perform its respective
obligations under the Purchase Agreement, the Registration Rights
Agreement, the Indenture, the Credit Documents, the Note and Warrant
Repurchase Agreement, the Securities, the Exchange Securities and the DTC
Agreement;
(iii) all of the issued and outstanding capital stock of each of
the Subsidiary Guarantors has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through the other Subsidiary Guarantors, free and clear of any adverse
claim as defined in Section 8-102(a)(1) of the Pennsylvania Commercial
Code;
(iv) the authorized, issued and outstanding capital stock of the
Company conforms in all material respects to the descriptions thereof set
forth in the Offering Memorandum. All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and, to such counsel's knowledge, have been
issued in compliance in all material respects with the registration and
qualification requirements, or exceptions therefrom, of federal and state
securities laws;
(v) the Purchase Agreement has been duly authorized, executed
and delivered by the Company and the Subsidiary Guarantors;
(vi) each of the Registration Rights Agreement and the DTC
Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company and the Subsidiary Guarantors,
enforceable in accordance with its terms, except as rights to
indemnification or contribution may be limited by applicable law or public
policy or except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
18
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles;
(vii) the Indenture has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors and (assuming the
due authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding agreement of the Company and the Subsidiary
Guarantors, enforceable against the Company and the Subsidiary Guarantors
in accordance with its terms, except as rights to indemnification or
contribution may be limited by applicable law or public policy or except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting the rights and remedies of creditors or by general
principles of equity;
(viii) the Notes are in the form contemplated by the Indenture,
have been duly authorized by all necessary corporate action on behalf of
the Company for issuance and sale pursuant to this Agreement and the
Indenture and, when executed by the Company and authenticated by the
Trustee in the manner provided in the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee) and
delivered against payment of the purchase price therefor, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as rights to indemnification
or contribution may be limited by applicable law or public policy or except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws relating
to or affecting enforcement of the rights and remedies of creditors or by
general principles of equity and will be entitled to the benefits of the
Indenture;
(ix) the Exchange Notes have been duly authorized for issuance
by all necessary corporate action on behalf of the Company, and when issued
and authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as rights to indemnification or
contribution may be limited by applicable law or public policy or except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws relating
to or affecting enforcement of the rights and remedies of creditors or by
general principles of equity and will be entitled to the benefits of the
Indenture;
(x) the Subsidiary Guarantees are in the form contemplated by
the Indenture, have been duly authorized for execution and delivery
pursuant to this Agreement and the Indenture and have been duly executed by
each of the Subsidiary Guarantors and, when authenticated in the manner
provided for in the Indenture and delivered against payment of the purchase
price for the Securities, will constitute valid and binding agreements of
the Subsidiary Guarantors, enforceable in accordance with their terms,
except as rights to indemnification or contribution may be limited by
applicable law or public policy or except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles and will be
entitled to the benefits of the Indenture;
19
(xi) the Exchange Subsidiary Guarantees have been duly
authorized for issuance and exchange pursuant to the Registration Rights
Agreement, the Exchange Offer and the Indenture and, when duly executed by
each of the Subsidiary Guarantors and authenticated in the manner provided
for in the Indenture and delivered in exchange for the Subsidiary
Guarantees, will constitute valid and binding agreements of the Subsidiary
Guarantors, enforceable in accordance with their terms, except as rights to
indemnification or contribution may be limited by applicable law or public
policy or except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and will be entitled to the benefits of
the Indenture;
(xii) the Securities and the Indenture conform in all material
respects to the descriptions thereof contained in the Offering Memorandum;
(xiii) the statements in the Offering Memorandum under the
captions "Description of Notes," "Principal Shareholders," "Description of
Other Indebtedness," "Certain Relationships and Related Transactions" and
"Certain United States Federal Tax Considerations for Non-United States
Holders" insofar as such statements constitute matters of law, summaries of
legal matters, charter or by-law provisions, documents or legal
proceedings, or legal conclusions, have been reviewed by such counsel and
are accurate and complete, in all material respects, with respect to the
matters referred to therein;
(xiv) no consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's or the Subsidiary Guarantors
execution, delivery and performance of the Purchase Agreement, the
Registration Rights Agreement, the DTC Agreement, the Credit Documents, the
Note and Warrant Repurchase Agreement, the Securities, the Exchange
Securities or the Indenture, or consummation of the transactions
contemplated thereby and by the Offering Memorandum, except as required
under (i) federal securities law (in the case of the Registration Rights
Agreement), (ii) applicable state securities or blue sky laws or (iii) the
filing of mortgages, financing statements or other documents required to
perfect security interests required under the Credit Documents;
(xv) the execution and delivery of the Purchase Agreement, the
Registration Rights Agreement, the DTC Agreement, the Credit Documents, the
Note and Warrant Repurchase Agreement, the Securities, the Exchange
Securities and the Indenture by the Company and the Subsidiary Guarantors
and the performance by the Company and the Subsidiary Guarantors of their
respective obligations thereunder (including the application of the
proceeds from the Offering and initial borrowings under the Credit
Documents, in each case, as described in the Offering Memorandum) (i) have
been duly authorized by all necessary corporate action on the part of the
Company and the Subsidiary Guarantors; (ii) will not result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary; (iii) will not constitute a breach of, or Default or a Debt
Repayment Triggering Event, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries under the Credit Documents or to the knowledge of
such counsel, any other material Existing Instrument; or (iv) to the
knowledge of such counsel, will not
20
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary;
(xvi) the Company and the Subsidiary Guarantors are not, and after
receipt of payment for the Securities (assuming application of the proceeds
from the sale of the Notes as set forth in the Offering Memorandum under
the heading "Use of Proceeds") will not be, an "investment company" within
the meaning of the Investment Company Act;
(xvii) based on the representations, warranties, covenants and
agreements of the Company, the Subsidiary Guarantors and the Initial
Purchasers set forth in this Purchase Agreement, 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 in
connection with the purchase of the Securities by the Initial Purchasers or
the initial resale of the Securities by the Initial Purchasers to Qualified
Institutional Buyers or non-U.S. persons in the manner contemplated by this
Agreement and the Offering Memorandum other than any registration or
qualification that may be required in connection with the Registration
Rights Agreement. Such counsel need express no opinion, however, as to when
or under what circumstances any Securities initially sold by the Initial
Purchasers may be reoffered or resold; and
(xviii) each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of
its date (except for the financial statements and notes thereto and other
financial and statistical data included in the Offering Memorandum, as to
which no opinion need be expressed), contained all of the information
required under Rule 144A(d) of the Securities Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and the
Subsidiary Guarantors, representatives of the independent public or certified
public accountants for the Company and the Subsidiary Guarantors and with
representatives of the Initial Purchasers at which the contents of the Offering
Memorandum, and any supplements or amendments thereto, and related matters were
discussed and, although such counsel has not undertaken to determine
independently, is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (other than as expressly specified above), and any
supplements or amendments thereto, on the basis of the foregoing, nothing has
come to their attention which would lead them to believe that either the
Offering Memorandum, as of its date or at the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits 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 (it being
understood that such counsel need express no belief as to the financial
statements or the notes thereto or other financial and statistical data,
included in the Offering Memorandum or any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the federal law
of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion (which shall be dated the Closing Date, shall be
satisfactory in form and substance to the Initial Purchasers, shall expressly
state that the Initial Purchasers may rely on such opinion as if it were
addressed to them and shall be furnished to the Initial Purchasers) of other
counsel of good standing whom they believe to be
21
reliable and who are satisfactory to counsel for the Initial Purchasers;
provided, however, that such counsel shall further state that they believe that
they and the Initial Purchasers are justified in relying upon such opinion of
other counsel, and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
(d) Opinion of General Counsel for the Company and the Subsidiary
Guarantors. On the Closing Date the Initial Purchasers shall have received
the favorable opinion of O'Hara, Hanlon, Xxxxx & Pobedinsky, LLP, general
counsel for the Company and the Subsidiary Guarantors, dated as of such
Closing Date, in form and substance satisfactory to you, to the effect
that:
(i) each of the Company and the Subsidiary Guarantors is (i) in
good standing under the laws of its jurisdiction of incorporation and (ii)
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or
to be in good standing would not, individually or in the aggregate, result
in a Material Adverse Change;
(ii) to the best knowledge of such counsel, neither the Company
nor any subsidiary is in violation of its charter or by-laws or any law,
administrative regulation or administrative or court decree applicable to
the Company or any subsidiary or is in Default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any material Existing Instrument, except in each such case for such
violations or Defaults as would not, individually or in the aggregate,
result in a Material Adverse Change;
(iii) each of the Credit Documents and the Note and Warrant
Repurchase Agreement has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company and each of the
Subsidiary Guarantors party thereto, enforceable in accordance with its
terms, except as rights to indemnification or contribution may be limited
by applicable law or public policy or except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles;
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the laws of the State of New York or
the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion (which shall be dated the Closing
Date, shall be satisfactory in form and substance to the Initial Purchasers,
shall expressly state that the Initial Purchasers may rely on such opinion as if
it were addressed to them and shall be furnished to the Initial Purchasers) of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; provided, however, that such
counsel shall further state that they believe that they and the Initial
Purchasers are justified in relying upon such opinion of other counsel.
(e) Opinion of Counsel for the Initial Purchasers. On the Closing
Date the Initial Purchasers shall have received the favorable opinion of
Xxxxxx & Xxxxxxx, counsel for
22
the Initial Purchasers, dated as of such Closing Date, with respect to such
matters as may be reasonably requested by the Initial Purchasers.
(f) Officers' Certificate. On the Closing Date the Initial
Purchasers shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the Company
and the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of the Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement
and prior to the Closing Date there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the
Company and the Subsidiary Guarantors set forth in Section 1 of this
Agreement are true and correct with the same force and effect as though
expressly made on and as of the Closing Date; and
(iii) the Company and the Subsidiary Guarantors have complied
with all the agreements and satisfied all the conditions on their
respective part to be performed or satisfied at or prior to the Closing
Date.
(g) Bring-down Comfort Letter. On the Closing Date the Initial
Purchasers shall have received from Coopers & Xxxxxxx, L.L.P., independent
public or certified public accountants for the Company, a letter dated such
date, in form and substance satisfactory to the Initial Purchasers, to the
effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 5, except that the
specified date referred to therein for the carrying out of procedures shall
be no more than three business days prior to the Closing Date.
(h) PORTAL Listing. At the Closing Date the Securities shall have
been designated for trading on the PORTAL market.
(i) Registration Rights Agreement. The Company and the Subsidiary
Guarantors shall have entered into the Registration Rights Agreement and
the Initial Purchasers shall have received executed counterparts thereof.
(j) Redemption of Notes and Warrants. Concurrently with the Closing,
the Company shall redeem the outstanding notes and warrants from Capital
Resource Partners II, LP and Exeter Venture Lenders, LP as described in the
Offering Memorandum under the caption "Use of Proceeds."
(k) Additional Documents. On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability
23
on the part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If the sale to
the Initial Purchasers of the Securities on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company or any
Subsidiary Guarantor to perform any agreement herein or to comply with any
provision hereof (except such refusal, inability or failure that is due to the
breach of any material term or condition of this Agreement by the Initial
Purchasers), the Company and the Subsidiary Guarantors jointly and severally
agree to reimburse the Initial Purchasers (or such Initial Purchasers as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Initial Purchasers in connection with the proposed purchase and the offering and
sale of the Securities, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
SECTION 7. OFFER, SALE AND RESALE PROCEDURES. Each of the Initial
Purchasers, on the one hand, and the Company and each of the Subsidiary
Guarantors, on the other hand, hereby establish and agree to observe the
following procedures in connection with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers or
Regulation S Investors. Offers and sales of the Securities will be
made only by the Initial Purchasers or Affiliates thereof qualified to
do so in the jurisdictions in which such offers or sales are made.
Each such offer or sale shall only be made (A) to persons whom the
offeror or seller reasonably believes to be qualified institutional
buyers (as defined in Rule 144A under the Securities Act) or (B) non-
U.S. persons outside the United States to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made in
reliance upon Regulation S under the Securities Act, upon the terms
and conditions set forth in Annex I hereto, which Annex I is hereby
------- -------
expressly made a part hereof.
(ii) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis.
No general solicitation or general advertising (within the meaning of
Rule 502(c) under the Securities Act) will be used in the United
States in connection with the offering of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-
bank Subsequent Purchaser of Securities acting as a fiduciary for one
or more third parties, in connection with an offer and sale to such
purchaser pursuant to clause (i) above, each third party shall, in the
judgment of the applicable Initial Purchaser, be an Institutional
Accredited Investor or a Qualified Institutional Buyer or a non-U.S.
person outside the United States.
(iv) Restrictions on Transfer. Upon original issuance by the
Company, and until such time as the same is no longer required under
the applicable requirements of the Securities Act, the Securities (and
all securities issued in exchange therefor or in substitution thereof,
other than the Exchange Securities) shall bear the following legend:
24
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY REQUIRED UNDER THE
INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES
FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTION SET FORTH IN (A)
ABOVE."
(v) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Securities from such Initial
Purchaser, in connection with its original distribution of the
Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Initial Purchasers. The Company and the
Subsidiary Guarantors jointly and severally agree to indemnify and hold
harmless each Initial Purchaser, its officers and employees, and each
person, if any, who controls any Initial Purchaser within the meaning of
the Securities Act and the Exchange Act against any
25
loss, claim, damage, liability or expense, as incurred, to which such
Initial Purchaser or such officer, employee or controlling person may
become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (ii) in whole
or in part upon any inaccuracy in the representations and warranties of the
Company or any Subsidiary Guarantor contained herein; or (iii) in whole or
in part upon any failure of the Company or any Subsidiary Guarantor to
perform any of their collective obligations hereunder or under law; or (iv)
any act or failure to act or any alleged act or failure to act by any
Initial Purchaser in connection with, or relating in any manner to, the
offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) above, provided that the Company and
the Subsidiary Guarantors shall not be liable under this clause (iv) to the
extent that a court of competent jurisdiction shall have determined by a
final judgment that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Initial Purchaser through its gross negligence or willful
misconduct; and to reimburse each Initial Purchaser and each such
controlling person for any and all reasonable expenses (including the
reasonable fees and disbursements of counsel chosen by NationsBanc
Xxxxxxxxxx Securities LLC to the extent provided for in Section 8(c)) as
such expenses are reasonably incurred by such Initial Purchaser or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but
only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by
the Initial Purchasers expressly for use in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto); and provided, further, that with respect to any Preliminary
Offering Memorandum, the foregoing indemnity agreement shall not inure to
the benefit of any Initial Purchaser from whom the person asserting any
loss, claim, damage, liability or expense purchased Securities, or any
person controlling such Initial Purchaser, if copies of the Offering
Memorandum were timely delivered to the Initial Purchaser pursuant to
Section 2 and a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Initial
Purchaser to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Securities to such
person, and if the Offering Memorandum (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage,
liability or expense. The indemnity agreement set forth in this Section
8(a) shall be in addition to any liabilities that the Company and the
Subsidiary Guarantors may otherwise have.
26
(b) Indemnification of the Company and the Subsidiary Guarantors.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Subsidiary Guarantors and each of their
directors and each person, if any, who controls the Company or any
Subsidiary Guarantor within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company or any Subsidiary Guarantor or any such
director, or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Initial Purchaser), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of
or is based upon any untrue or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the Offering Memorandum
(or any amendment or supplement thereto), or arises out of or is based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), in reliance upon and
in conformity with written information furnished to the Company by the
Initial Purchasers expressly for use therein; and to reimburse the Company,
the Subsidiary Guarantors, or any such director or controlling person for
any legal and other expenses reasonably incurred by the Company and the
Subsidiary Guarantors, or any such director or controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action. The Company
and the Subsidiary Guarantors hereby acknowledge that the only information
that the Initial Purchasers have furnished to the Company expressly for use
in any Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth (A) as the
last paragraph on page (iii) of the Offering Memorandum concerning
stabilization by the Initial Purchasers and (B) in the third, fifth and
sixth paragraphs under the caption "Plan of Distribution" in the Offering
Memorandum; and the Initial Purchasers confirm that such statements are
correct. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained
in this Section 8 or to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party and provides notice to an indemnified
party, the indemnifying party will be entitled to participate in and, to
the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such
27
action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of
such indemnifying party's election so to assume the defense of such action
and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (together with one local counsel), approved by the indemnifying
party (NationsBanc Xxxxxxxxxx Securities LLC for the Initial Purchasers in
the case of Section 8(b) and Section 9), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 60 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been
a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for in
Section 8 required by its terms but is for any reason held to be unavailable to
or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein other
than by reason of the limitations or exceptions set forth in Section 8, then
each indemnifying party shall contribute to the aggregate amount paid or payable
by such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses referred to therein (i) in such proportion as
is appropriate to reflect the relative benefits
28
received by the Company and the Subsidiary Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Subsidiary Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Subsidiary Guarantors on the one hand, and the
Initial Purchasers, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (net of discounts to the Initial
Purchasers but before deducting expenses) received by the Company and the
Subsidiary Guarantors, and the total discount received by the Initial Purchasers
bear to the aggregate initial offering price of the Securities. The relative
fault of the Company and the Subsidiary Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company and the Subsidiary Guarantors, on the one
hand, or the Initial Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Subsidiary Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Initial 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 in this Section 9.
Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the discount received by
such Initial Purchaser in connection with the Securities distributed by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in Schedule A. For purposes of this Section 9, each
----------
officer and employee of an Initial Purchaser and each person, if any, who
controls an Initial Purchaser within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company or any Subsidiary Guarantor, and
each person, if any, who controls the Company or any Subsidiary Guarantor with
the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Company and the Subsidiary Guarantors.
29
SECTION 10. TERMINATION OF THIS AGREEMENT. Prior to the Closing Date,
this Agreement may be terminated by the Initial Purchasers by notice given to
the Company if at any time (i) trading in securities generally on either the
Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal or New York
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial or economic conditions, as in the
judgment of the Initial Purchasers is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities;
(iv) in the judgment of the Initial Purchasers there shall have occurred any
Material Adverse Change; or (v) the Company or any of the Subsidiary Guarantors
shall have sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as in the judgment of the Initial Purchasers
may interfere materially with the conduct of the business and operations of the
Company or the Subsidiary Guarantors regardless of whether or not such loss
shall have been insured. Any termination pursuant to this Section 10 shall be
without liability on the part of (a) the Company or the Subsidiary Guarantors to
any Initial Purchaser, except that the Company and the Subsidiary Guarantors
shall be obligated, jointly and severally, to reimburse the expenses of the
Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any Initial
Purchaser to the Company or any of the Subsidiary Guarantors, or (c) of any
party hereto to any other party except that the provisions of Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and the Subsidiary Guarantors, of their officers and
of the several Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Initial Purchaser or the Company or any Subsidiary
Guarantor or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement until
such time as all of the Securities have been fully paid or redeemed by the
Company.
SECTION 12. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Initial Purchasers:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
00
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Esq.
If to the Company or any Subsidiary Guarantors:
Xxxxx International Enterprises Corp.
000 Xxxxxxxx Xxxxxx
X. X. Xxx 0000
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
with a copy to:
O'Hara, Hanlon, Knych & Pobedinsky, LLP
Xxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxxx Xxxxxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 13. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.
SECTION 14. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 15. GOVERNING LAW PROVISIONS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SUCH STATE.
(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the "Specified Courts"), and each party irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons,
31
notice or document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such suit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.
(b) Waiver of Immunity. With respect to any Related Proceeding, each party
irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment.
SECTION 16. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS. If
any one or more of the several Initial Purchasers shall fail or refuse to
purchase Securities that it or they have agreed to purchase hereunder on the
Closing Date, and the aggregate number of Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Securities to be purchased on
such date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
----------
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date. If any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities and the aggregate number of Securities
with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on the Closing Date, and arrangements satisfactory to
the Initial Purchasers and the Company for the purchase of such Securities are
not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either the Initial
Purchasers or the Company shall have the right to postpone the Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Offering Memorandum or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 10. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the section headings herein
32
are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company and the Subsidiary Guarantors, their affairs and their respective
businesses in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary Offering Memorandum and the Offering
Memorandum (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
33
Very truly yours,
XXXXX INTERNATIONAL ENTERPRISES CORP.
By: /s/ Xxxxxx F. X. Xxxxxx
-----------------------------------
Name: Xxxxxx F. X. Xxxxxx
Title: V.P
BLUE RIDGE TEXTILE MANUFACTURING, INC., AS
GUARANTOR
By: /s/ Xxxxxx F. X. Xxxxxx
-----------------------------------
Name: Xxxxxx F. X. Xxxxxx
Title: V.P
OHIO GARMENT RENTAL, INC., AS GUARANTOR
By: /s/ Xxxxxx F. X. Xxxxxx
-----------------------------------
Name: Xxxxxx F. X. Xxxxxx
Title: V.P
MIDWAY-CTS BUFFALO, LTD, AS GUARANTOR
By: /s/ Xxxxxx F. X. Xxxxxx
-----------------------------------
Name: Xxxxxx F. X. Xxxxxx
Title: V.P
CLEAN TOWEL SERVICE, INC., AS GUARANTOR
By: /s/ Xxxxxx F. X. Xxxxxx
-----------------------------------
Name: Xxxxxx F. X. Xxxxxx
Title: V.P
S-1
The foregoing Purchase Agreement is hereby confirmed and accepted by
the Initial Purchasers as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
FIRST UNION CAPITAL MARKETS, A DIVISION OF WHEAT FIRST SECURITIES, INC.
As the several Initial Purchasers
By NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ J. Xxxxx Xxxxxx
--------------------------------
Name: J. Xxxxx Xxxxxx
Title: Principal
S-2
SCHEDULE A
AGGREGATE
PRINCIPAL AMOUNT
INITIAL PURCHASERS OF SECURITIES TO BE
PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC........... $56,250,000
First Union Capital Markets, a division of Wheat
First Securities, Inc.......................... 18,750,000
Total........................................ $75,000,000
A-1
ANNEX I
Resale Pursuant to Regulation S.
Each Initial Purchaser understands that:
(a) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Securities in the United States or to, or for
the benefit or account of, a U.S. Person (other than a distributor), in
each case, as defined in Rule 902 under the Securities Act (i) as part of
its distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering of the Securities pursuant hereto
and the Closing Date, other than in accordance with Regulation S of the
Securities Act or another exemption from the registration requirements of
the Securities Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Securities (including any "tombstone" advertisement) to be published in any
newspaper or periodical or posted in any public place and will not issue
any circular relating to the Securities, except such advertisements as are
permitted by and include the statements required by Regulation S.
(b) Such Initial Purchaser agrees that, at or prior to confirmation
of a sale of Securities by it to any distributor, dealer or person
receiving a selling concession, fee or other remuneration during the 40-day
restricted period referred to in Rule 903(b)(3) under the Securities Act,
it will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of your 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 under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are exempt
from the registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Securities covered
hereby in reliance on Regulation S during the period referred to above
to any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to substantially
the foregoing effect. Terms used above have the meanings assigned to
them in Regulation S."
(c) Such Initial Purchaser agrees that the Securities offered and
sold in reliance on Regulation S will be represented upon issuance by a
global security that may not be exchanged for definitive securities until
the expiration of the 40-day restricted period referred to in Rule
903(b)(3) of the Securities Act and only upon certification of beneficial
ownership of such Securities by non-U.S. persons or U.S. persons who
purchased such Securities in transactions that were exempt from the
registration requirements of the Securities Act.
Annex I-1
