PURCHASE AGREEMENT, dated as of July 29, 2005, between BRAND INTERMEDIATE HOLDINGS, INC., as the Company, and the Persons Listed on Schedule I Hereto, as the Initial Purchasers, for Preferred Stock
dated
as
of July 29, 2005,
between
BRAND
INTERMEDIATE HOLDINGS, INC.,
as
the
Company,
and
the
Persons Listed on Schedule I Hereto,
as
the
Initial Purchasers,
for
Preferred Stock
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DEFINITIONS
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1
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SECTION
1.1.
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Defined
Terms
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1
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SECTION
1.2.
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Use
of Defined Terms
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8
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SECTION
1.3.
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Cross
References
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8
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SECTION
1.4.
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Accounting
and Financial Determinations
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9
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ARTICLE
II
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PURCHASE
AND SALE OF PREFERRED STOCK
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9
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SECTION
2.1.
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Purchase
Commitment
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9
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SECTION
2.2.
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Closing
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9
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ARTICLE
III
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CONDITIONS
TO CLOSING
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9
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SECTION
3.1.
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Initial
Purchaser’s Conditions
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9
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SECTION
3.2.
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Company’s
Conditions
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11
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ARTICLE
IV
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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12
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SECTION
4.1.
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Organization,
Power, Authority, etc
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12
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SECTION
4.2.
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Due
Authorization
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12
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SECTION
4.3.
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Validity,
etc
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12
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SECTION
4.4.
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Financial
Information
|
12
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SECTION
4.5.
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Company
Assets and Liabilities; Material Adverse Effect
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12
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SECTION
4.6.
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Undisclosed
Liabilities
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13
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SECTION
4.7.
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Litigation,
etc.
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13
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SECTION
4.8.
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Capitalization
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13
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SECTION
4.9.
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Government
Regulation
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13
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SECTION
4.10.
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Title
to Properties
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13
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SECTION
4.11.
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Material
Contracts
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14
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SECTION
4.12.
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Patents,
Trademarks, etc.
|
14
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SECTION
4.13.
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Taxes
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14
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SECTION
4.14.
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Employee
Benefits; ERISA
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15
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SECTION
4.15.
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Environmental
Matters
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16
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SECTION
4.16.
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Subsidiaries,
etc.
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17
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SECTION
4.17.
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Disclosure
|
17
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ARTICLE
V
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REPRESENTATIONS
AND WARRANTIES OF THE INITIAL PURCHASERS
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18
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SECTION
5.1.
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Organization;
Authority
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18
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SECTION
5.2.
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Authorization;
No Conflicts
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18
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SECTION
5.3.
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Consents
and Approvals
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18
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SECTION
5.4.
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No
Brokers or Finders
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18
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SECTION
5.5.
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Legal
Proceedings
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18
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SECTION
5.6.
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Private
Offering
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19
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SECTION
5.7.
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Accredited
Investor
|
19
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SECTION
5.8.
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Restriction
on Resale
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19
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SECTION
5.9.
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Due
Diligence
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19
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SECTION
5.10.
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Source
of Funds
|
19
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-2-
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ARTICLE
VI
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COVENANTS
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20
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SECTION
6.1.
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Compliance
with Laws
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21
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SECTION
6.2.
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Inspection
Rights
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21
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SECTION
6.3.
|
Limitations
on Restrictions on Distributions from Subsidiaries
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21
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|
|
SECTION
6.4.
|
Limitations
on Transactions with Affiliates
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21
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|
SECTION
6.5.
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Limitations
on Line of Business
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22
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|
|
SECTION
6.6.
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Financial
Statements
|
22
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|
|
SECTION
6.7.
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Restricted
Payments
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23
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SECTION
6.8.
|
Amendments
|
24
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ARTICLE
VII
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EVENTS
OF NONCOMPLIANCE
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24
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SECTION
7.1.
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Events
of Noncompliance
|
24
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SECTION
7.2.
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Remedies
|
25
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ARTICLE
VIII
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MISCELLANEOUS
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25
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SECTION
8.1.
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Waivers,
Amendments, etc.
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25
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SECTION
8.2.
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Notices
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26
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SECTION
8.3.
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Indemnification;
Expenses, etc.
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26
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SECTION
8.4.
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Severability
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27
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SECTION
8.5.
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Headings
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27
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SECTION
8.6.
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Counterparts
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27
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SECTION
8.7.
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Entire
Agreement
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27
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SECTION
8.8.
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Governing
Law; Jurisdiction
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27
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SECTION
8.9.
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Notices
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28
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SECTION
8.10.
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Waiver
of Jury Trial
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29
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SECTION
8.11.
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Successors
and Assigns; Permitted Transfers
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29
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SECTION
8.12.
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Confidentiality
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30
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|
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SECTION
8.13.
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Parties
in Interest
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30
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SECTION
8.14.
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Severalty
of Obligations
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31
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|
SECTION
8.15.
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Survival
of Representations and Warranties
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31
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SECTION
8.16.
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Independence
of Covenants
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31
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SECTION
8.17.
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Further
Assurances
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31
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SECTION
8.18.
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Specific
Performances; Remedies
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00
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-0-
XXXXXXXX
AGREEMENT
THIS
PURCHASE AGREEMENT, dated as of July 29, 2005, between BRAND INTERMEDIATE
HOLDINGS, INC., a Delaware corporation (the åCompany")
and
the Persons listed on Schedule
I
hereto
(each, together with their Affiliates, being an "Initial
Purchaser",
and
collectively, the "Initial Purchasers").
W
I T
N E S S E T H:
WHEREAS,
the Company has authorized the sale to the Initial Purchasers, and the Initial
Purchasers are willing severally (but not jointly) on the terms and conditions
hereinafter set forth (including Article
III)
to
purchase on the Closing Date the Preferred Stock set forth on Schedule I
hereto;
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.1. Defined
Terms.
The
following terms (whether or not italicized) when used in this Agreement, or
any
of the Schedules hereto, including the preamble and recitals hereto, shall,
except where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition"
means
the
acquisition of substantially all of the assets and the assumption of certain
of
the liabilities of Aluma pursuant to the Asset Purchase Agreement.
"Affected
Holder"
has the
meaning ascribed to such term in Section
6.8.
"Affiliate"
means,
with respect to any Person, any other Person controlling, controlled by or
under
common control with such Person. For purposes of the immediately preceding
sentence, the term "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through ownership or voting securities, by contract or
otherwise.
"Agreement"
means,
on any date, this Purchase Agreement as originally in effect and as thereafter
from time to time amended, supplemented or otherwise modified in accordance
with
the terms hereof and in effect on such date.
"Aluma"
means
Aluma Enterprises, Inc., a corporation organized under the laws of
Canada.
"Applicable
Law"
means,
relative to any Person, (x) all provisions of laws, statutes, ordinances,
rules, regulations, requirements, restrictions, permits, certificates or orders
of any Governmental Authority applicable to such Person or any of its assets
or
property and (y) all judgments, injunctions, orders and decrees of all
courts and arbitrators in proceedings or actions in which such Person is a
party
or by which any of its assets or properties are bound.
-4-
"Approval"
means,
relative to any Person, each consent, waiver, approval, order, or authorization
of, or registration or filing with, or notification to any Governmental
Authority required on the part of the Company in connection with the execution
and delivery of this Agreement or the compliance by the Company with any of
the
provisions hereof or thereof, except for (i) the filing of the Restated
Certificate with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company
or
any of its Subsidiaries does business; (ii) such filings and approvals
as
may be required by any Federal and/or state securities laws; and
(iii) Approvals which if not obtained would not reasonably be expected
to
have a Material Adverse Effect.
"Asset
Purchase Agreement" means
the
asset purchase agreement, dated as of May 19, 2005, among Brand Services and
Aluma.
"Bankruptcy
Law"
is
defined in Section
7.1(e).
"Brand
Services"
means
Brand Services, Inc., a Delaware corporation.
"Brand
Services Capital Contribution"
means the
contribution of $30,000,000 to the capital of Brand Services by the Company
on
the date hereof.
"Brand
Services Capital Contribution Documents"
means
each of the agreements, documents and instruments executed in connection with
the Brand Services Capital Contribution.
"By-laws"
means
the By-laws of the Company, as amended, amended and restated or otherwise
modified from time to time.
"Business
Day"
means
any day, excluding,
however,
a
Saturday, Sunday and each legal holiday on which banks are authorized or
required to close in New York, New York.
"Capital
Stock"
means,
relative to any Person, any and all shares, partnership or membership interests,
participations, rights or other equivalents (however designated) of corporate
stock, including (w) capital shares of such Person (whether voting or
non-voting), (x) if such Person is a partnership, capital partnership
interests (whether general or limited), (y) any other indicia of ownership
of such Person and (z) all warrants, options, purchase rights, conversion or
exchange rights, voting rights, calls or any claims of any character with
respect thereto.
"Closing"
is
defined in Section
2.2.
"Closing
Date"
means
July 29, 2005.
"Closing
Documents"
is
defined in Section 3.1(b)(iii).
"Closing
Financial Statements" means
(i)
the audited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of each of the Company, Brand Services and
Aluma for the fiscal year ended December 31, 2004 and (ii) the unaudited
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of each of the Company, Brand Services and Aluma for
each
subsequent fiscal quarter ended 45 days before the Closing Date.
"Code"
means
the Internal Revenue Code of 1986, as amended, reformed or otherwise modified
from time to time.
"Company"
is
defined in the preamble.
"Company
Intellectual Property Rights"
is
defined in Section
4.12(c).
-5-
"Disclosure
Schedule"
means
Schedule
II hereto.
"Employee
Benefit Plan"
means
all "employee benefit plans" (as defined in Section 3(3) of ERISA) and all
severance pay, vacation pay, awards, salary continuation, sick leave, retirement
or deferred compensation, retention, change in control, bonus or other incentive
compensation, stock or other equity-related award, restricted stock, stock
purchase, stock option, phantom stock, employee loan programs, insurance or
hospitalization or fringe benefit programs, arrangements or practices as to
which the Company or any of its Subsidiaries has any obligation or liability
(contingent or otherwise) other than any Multiemployer Plan.
"Environmental
Law"
means
any applicable foreign, federal, state or local statute, regulation, ordinance,
court order or decision or other legal requirement in effect as of the Closing
relating to the protection of human health from pollution, the environment
or
natural resources, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), the Emergency Planning and Community Right to Know Act (42 U.S.C.
§ 11001 et seq.), the Safe Drinking Water Act (41 U.S.C. § 300f et
seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act
(42 U.S.C. § 7401 et seq.) the Toxic Substances Control Act (15 U.S.C.
§ 2601 et seq.), and the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. § 136 et seq.), and the regulations promulgated pursuant
thereto.
"ERISA"
means
the Employee Retirement Income Security Act of 1974, as amended.
"ERISA
Affiliate"
means,
with respect to any Person, any trade or business (whether or not incorporated)
which is treated as a single employer with such Person under Section 4001(b)(1)
of ERISA.
"Event
of Noncompliance"
is
defined in Section
7.1.
"Exempt
Affiliate Transactions"
means
the transactions (a) related to the sale and issuance of the Preferred Stock
contemplated hereby (including, without limitation, the payment of related
fees
and expenses and (b) set forth on Schedule
III
hereto.
"Financial
Statements"
is
defined in Section
4.4.
"Financing
Documents"
shall
mean the Senior Financing Documents, the Senior Subordinated Note Financing
Documents and any other contract, agreement or instrument pursuant to which
any
Funded Indebtedness of the Company or any of its Subsidiaries is issued or
governed, as subsequently amended or otherwise modified.
"F.R.S.
Board"
means
the Board of Governors of the Federal Reserve System or any successor
thereto.
"Funded
Indebtedness"
means,
without duplication, (a) indebtedness for borrowed money,
(b) obligations evidenced by notes, bonds, debentures or other similar
instruments, (c) obligations relating to the deferred purchase price
of
property or services (other than trade payables incurred in the ordinary course
of business), (d) obligations as lessee under leases that have been
or
should be recorded as capital leases in accordance with GAAP, (e) all
obligations under letters of credit (other than undrawn letters of credit),
surety or performance bonds or similar instruments (other than relating to
trade
payables incurred in the ordinary course of business or other customary ordinary
course liabilities such as in connection with workers’ compensation insurance
funds), (f) indebtedness of any Person secured by a Lien on property
owned
or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse
(provided
that,
to the
extent such indebtedness is limited in recourse to the assets securing such
indebtedness, the amount of such indebtedness shall be limited to the amount
of
the fair market value of such assets), (g) obligations under direct
or
indirect guaranties in respect of indebtedness or obligations of others of
the
kind referred to in clauses
(a)
through
(f)
above,
and (h) accrued but unpaid interest, fees, penalties and the like
outstanding in respect of any of the foregoing; provided,
however,
that
Funded Indebtedness
shall not include (w) indebtedness, whether evidenced by notes or otherwise,
of
the Company to any of its Subsidiaries or of any such Subsidiary to the Company
or to another Subsidiary of the Company.
-6-
"GAAP"
is
defined in Section
1.4.
"Governmental
Authority"
means
any government or governmental or regulatory body thereof, or political
subdivision thereof, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or
private).
"Hazardous
Material"
means
any form of substance, material, waste or other matter which is defined,
characterized or regulated under any Environmental Law as "hazardous," "toxic,"
"a contaminant," "a pollutant," "carcinogenic," or words of similar meaning
or
effect, including, without limitation, petroleum and its by-products, asbestos
and polychlorinated biphenyls.
"herein",
"hereof",
"hereto",
"hereunder"
and
similar terms contained in this Agreement refer to this Agreement as a whole
and
not to any particular Article, Section, paragraph or provision of this
Agreement.
"Holder"
means
any holder of Preferred Stock.
"including"
means
including without limiting the generality of any description preceding such
term.
"Indemnitee"
is
defined in Section 8.3(b).
"Initial
Purchaser"
is
defined in the preamble.
"Institutional
Investor"
means
(a) any original purchaser of Preferred Stock and (b) any commercial
bank, trust company, savings and loan association or other financial
institution, any pension fund, any investment company, any insurance company,
any broker or dealer or any similar financial institution or entity, regardless
of legal form, which would qualify as a "qualified institutional advisor" under
Rule 144A of the Securities Act of 1933, as amended.
"Intellectual
Property Rights"
means
any and all rights under trademark (including service marks), trade name,
patent, trade secret, know-how, copyright law or any other statutory provision
or common law doctrine.
"Knowledge
of the Company"
or the
"Company’s
Knowledge"
means,
at any time and relative to any matter, the actual knowledge which any director
or officer of the Company would have (x) for purposes of all matters
pertaining to the Company and its Subsidiaries, based upon the negotiation
and
delivery of the Transaction Documents to which the Company is a party and the
consummation of the transactions described therein, and (y) for any other
purpose, based on the actual knowledge of such authorized officer or
director.
"Liabilities"
is
defined in Section
4.6.
"Lien"
means
any lien, pledge, mortgage, deed or trust, security interest, charge, claim,
option (including any right of first refusal or the like), restriction on
transfer or any other encumbrance of any kind or nature whatsoever, including,
without limitation, any agreement to give any of the foregoing in the
future.
"Material
Adverse Effect"
means
(a) a material adverse effect upon the business, results of operations,
properties, operations, assets or condition (financial or otherwise) of the
Company and its Subsidiaries (taken as a whole) or (b) the material impairment
of the ability of the Company to perform its obligations hereunder.
"Material
Contract"
means
any contract, agreement, indenture, note, bond, loan, instrument, lease,
commitment or other arrangement or agreement, whether oral or written, to which
the Company or any of its Subsidiaries is a party and which either
(a) require payments by, or upon a breach thereof would result in Liability
of, the Company or any of its Subsidiaries in excess of $1,000,000 or
(ii) which (A) in the year ended December 31, 2004
generated or (B) is expected to generate in any fiscal year thereafter, revenues
to the Company or any of its Subsidiaries (including rental, licensing or
similar revenues) in excess of $1,000,000.
-7-
"Multiemployer
Plan"
means
all multiemployer plans within the meaning of Section 3(37) of ERISA as to
which
the Company or any of its Subsidiaries, or any of their respective ERISA
Affiliates, has any obligation or liability (contingent or
otherwise).
"or"
is not
exclusive.
"Owned
Property"
is
defined in Section
4.10.
"Parent"
means
Brand Holdings, LLC, a Delaware limited liability company and the parent of
the
Company.
"Patriot
Act"
means
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), as amended and supplemented from time to time.
"Patriot
Act Disclosures"
means
all documentation and other information which any Holder reasonably requests
in
order to comply with its ongoing obligations under applicable "know your
customer" and anti-money laundering rules and regulations, including the Patriot
Act.
"Permit"
means
any license, franchise, permit or other similar authorization of any
Governmental Authority.
"Permitted
Exceptions"
means
(i) statutory liens for current Taxes, assessments or other governmental
charges not yet due and payable or the amount or validity of which is being
contested in good faith by appropriate proceedings, provided an appropriate
reserve has been established therefor in accordance with GAAP;
(ii) mechanics’, carriers’, workers’, repairers’, and similar Liens arising
or incurred in the ordinary course of business consistent with past practice
for
sums not yet due and payable or the amount or validity of which is being
contested in good faith by appropriate proceedings, provided an appropriate
reserve has been established therefor in accordance with GAAP;
(iii) zoning, entitlement and other land use regulations by any
Governmental Authority; (iv) Liens securing Funded Indebtedness, including
Funded Indebtedness outstanding under, or permitted by, the Financing Documents;
and (v) such other imperfections in title, charges, easements, restrictions
and encumbrances incurred in the ordinary course of business and not incurred
in
connection with the incurrence of any Funded Indebtedness, which do not
materially detract from the value of or materially interfere with the present
or
intended use of any property or asset subject thereto or affected
thereby.
"Person"
means
any natural person, corporation, firm, association, partnership, limited
liability partnership, limited liability company, unincorporated organization,
government, trust, governmental agency or any other entity, whether acting
in an
individual, fiduciary or other capacity.
"Preferred
Stock"
is
defined in Section
2.1
of this
Agreement.
"PTE"
is
defined in Section
5.10(a).
"Purchase
Price"
is
defined in Section
2.2.
"QPAM
Exemption"
means
Prohibited Transaction Class Exemption 84-14 issued by the United States
Department of Labor.
"Requisite
Holders"
means,
as of any date of determination, holders of at least a majority of the issued
and outstanding Preferred Stock at such time.
-8-
"Restated
Certificate"
means,
the Second Amended and Restated Certificate of Incorporation of the Company,
in
substantially the form of Exhibit
A. .
"SEC"
means
the Securities and Exchange Commission.
"Securities
Act"
means
the Securities Act of 1933, as amended.
"Senior
Financing Documents" shall
mean the Senior Loan Agreement and each other Loan Document (as defined in
the
Senior Loan Agreement).
"Senior
Loan Agreement" shall
mean that certain Amended and Restated Credit Agreement, dated as of July 29,
2005, among Brand Services, Credit Suisse, JPMorgan Chase Bank, N.A. and the
lenders listed therein.
"Senior
Subordinated Note Financing Documents" shall
mean, collectively, (i) the Indenture, dated as of October 16, 2002, between
Brand Services and The Bank of New York Trust Company of Florida, N.A., in
respect of the 12% Senior Subordinated Notes due 2012 issued by Brand Services;
and each of the Registration Rights Agreement (as defined in such Indenture)
and
the Purchase Agreement, among Brand Services, Credit Suisse and X.X. Xxxxxx
Securities Inc., as the initial purchasers of such Senior Subordinated Notes
and
(ii) the Indenture, dated as of October 16, 2002, between the Company and The
Bank of New York Trust Company of Florida, N.A., in respect of the 13% Senior
Subordinated Payment-In-Kind Notes due 2013 issued by the Company and the
Purchase Agreement, among the Company, the Parent, and each of the JPMP Holders
(as defined therein), other than XX Xxxxxx Partners, LLC, as the initial
purchasers of such Payment-In-Kind Senior Subordinated Notes.
"Significant
Holder"
means
(i) each Holder which is an Initial Purchaser and (ii) each other Holder holding
Preferred Stock having an aggregate Liquidation Value (as defined in the
Restated Certificate) of at least $9,000,000.
"Significant
Subsidiary"
means
any Subsidiary of the Company which would qualify as a "Significant Subsidiary"
pursuant to Section (w) of Regulation S-X of the Securities Act of 1933, as
amended.
"Source"
is
defined in Section
5.10.
"Subsidiary"
means,
relative to any specified Person, any other Person of which a majority of the
outstanding voting securities or other voting equity interests are owned,
directly or indirectly, by such specified Person; for purposes of clarification,
unless otherwise expressly provided or the context otherwise requires, the
term
"Subsidiary" shall be deemed to be a reference to a Subsidiary of the
Company.
"Tax"
means
(a) all federal, state, local or foreign taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding, payroll, employment,
windfall profits, real or personal property, social security (or similar),
unemployment, excise, severance, stamp, occupation and estimated taxes, customs,
duties, fees, assessments and charges of any kind whatsoever and (b) all
interest, penalties, fines, additions to tax or additional amounts imposed
by
any taxing authority in connection with any item described in clause (a).
"Tax
Return"
means
all returns, declarations, reports, estimates, information returns and
statements required to be filed in respect of any Taxes.
"Transactions"
means,
collectively, the transactions contemplated by this Agreement, the Brand
Services Capital Contribution Documents, the Asset Purchase Agreement and the
Senior Financing Documents.
-9-
"Transaction
Documents"
means
this Agreement, the Asset Purchase Agreement, the Senior Financing Documents,
the Brand Services Capital Contribution Documents and each other agreement
executed in connection therewith, in each case, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Transaction
Fee"
means a
fee paid to JPMorgan Partners or one of its Affiliates in an amount not to
exceed $600,000.
"2004
Balance Sheet"
is
defined in Section
4.6.
SECTION
1.2. Use
of Defined Terms.
Unless
otherwise defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings when used
in
the Disclosure Schedule or any notice or other communication delivered from
time
to time in connection with this Agreement.
SECTION
1.3. Cross
References.
Unless
otherwise specified, references in this Agreement to any Article or Section
are
references to such Article or Section of this Agreement, and unless otherwise
specified, references in any Article, Section or definition to any item or
clause are references to such item or clause of such Article, Section or
definition.
SECTION
1.4. Accounting
and Financial Determinations.
Unless
otherwise specified, all accounting terms used herein shall be interpreted,
all
accounting determinations and computations hereunder or thereunder for periods
after the Closing Date shall be made and all financial statements required
to be
delivered hereunder or thereunder shall be prepared, in accordance with
generally accepted accounting principles (subject,
however,
in the
case of financial information as at the close of any period other than a Fiscal
Year, to the absence of footnotes and normal year-end adjustments) as in effect
on the date hereof consistently applied in the United States of America for
all
applicable periods ("GAAP").
ARTICLE
II
PURCHASE
AND SALE OF PREFERRED STOCK
SECTION
2.1. Purchase
Commitment.
Each
Initial Purchaser hereby agrees, subject,
however,
to the
terms and conditions of this Agreement (including Article III),
to
purchase from the Company, and the Company hereby agrees to sell to each such
Initial Purchaser, at the Closing the number of shares of Series A Preferred
Capital Stock (collectively, the "Preferred
Stock")
set
forth opposite such Initial Purchaser’s name on Schedule I
for the
aggregate purchase price also set forth opposite such Initial Purchaser’s name
on such Schedule I.
SECTION
2.2. Closing.
The
purchase of the Preferred Stock hereunder shall take place at a closing (the
"Closing")
at the
offices of Mayer, Brown, Xxxx & Maw LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000,
at 10:00 a.m., local time, on the Closing Date.
At the
Closing, the Company will deliver to each Initial Purchaser such amount of
Preferred Stock set forth opposite each such Initial Purchaser’s name on
Schedule
I
against
payment by each Initial Purchaser to the capital of the Company of cash in
the
amount set forth opposite each such Initial Purchaser’s name on Schedule
I
hereto
(the "Purchase
Price").
ARTICLE
III
CONDITIONS
TO CLOSING
SECTION
3.1 Initial Purchaser’s Conditions. The
obligations of each Initial Purchaser to consummate the transactions
contemplated by this Agreement are subject to the fulfillment prior to, at
or
concurrently with the Closing, of all of the following conditions:
(a)
Organization
Documents and Good Standing Certificates.
Each
Initial Purchaser shall have received:
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(i)
a
copy of
the Restated Certificate, certified by the Secretary of State of the State
of
Delaware, dated not more than twenty (20) days prior to the Closing Date;
and
(ii)
a
certificate of good standing for the Company from the Secretary of State of
the
State of Delaware, dated not more than twenty (20) days prior to the Closing
Date.
(b)
Officer’s
Certificate.
Each
Initial Purchaser shall have received a certificate, dated the Closing Date,
of
the Secretary or Assistant Secretary of the Company in the form of Exhibit B:
(i)
attaching
a true and complete copy of the Restated Certificate and the
By-laws;
(ii)
certifying
that the Restated Certificate and the By-laws are in full force and
effect;
(iii)
certifying
(A) as to the name, titles and true signatures of the officers of the Company
authorized to sign this Agreement and all of the agreements, instruments and
documents relating hereto and thereto (collectively, this Agreement, the
Restated Certificate and all such other agreements, instruments and documents
being, the "Closing
Documents"),
(B) that attached thereto is a true, accurate and complete copy of the
resolutions of the Board of Directors (or equivalent) of the Company, duly
adopted at a meeting or by unanimous written consent of such Board of Directors,
authorizing the execution, delivery and performance of the Closing Documents,
and that such resolutions have not been amended, modified, revoked or rescinded,
are in full force and effect and are the only resolutions of the Board of
Directors or any committee thereof relating to the subject matter thereof,
(C)
that the Closing Documents are in the form approved by its Board of Directors
in
the resolutions referred to in clause (B)
above
and (D) that the shareholders of the Company have approved the adoption of
the
Restated Certificate;
(iv)
certifying
that all conditions to funding under the Senior Financing Documents have been
satisfied in all material respects; and
(v)
certifying
as to the satisfaction of the conditions set forth in clause (c)
below.
(c)
Representations
and Warranties; Satisfaction of Conditions.
The
representations and warranties of the Company contained in Article
IV
hereof
and in the other Closing Documents shall be true on and as of the Closing Date,
in all material respects, both before and immediately after giving effect to
the
transactions contemplated hereby; and the Company shall have performed all
agreements and satisfied all conditions required under this Agreement and the
other Closing Documents to be performed or satisfied by it on or before the
Closing Date.
(d)
Patriot
Act Disclosures.
Each
Initial Purchaser shall have received all Patriot Act Disclosures requested
by
it prior to execution of this Agreement.
(e)
Fees
and Expenses.
The
Company shall have paid the reasonable fees, charges and disbursements of
special counsel to the Initial Purchasers that are due in connection with this
Agreement.
(f)
Sale
of Preferred Stock.
The
Company shall have sold to all of the Initial Purchasers the Preferred Stock
to
be purchased by them at the Closing and shall have received payment in full
therefor.
-11-
(g)
Consummation
of the Transactions.
The
Acquisition and the other Transactions shall be consummated simultaneously
with
the consummation of the purchase of the Preferred Stock pursuant to Section
2.1
in
accordance with Applicable Law and the Asset Purchase Agreement, without waiver
or amendment of any provision thereof that could materially adversely affect
the
interests of any Initial
Purchaser;
and the
Initial Purchasers shall be reasonably satisfied with the capitalization,
structure (legal and otherwise) and equity ownership of the Company and Brand
Services after giving effect to the Transactions. The Initial Purchasers shall
have received duly executed and delivered copies of the Asset Purchase
Agreement, all documents related thereto and all opinions delivered in respect
of the foregoing, in each case, in form and substance satisfactory to the
Initial Purchasers.
(h)
Closing
Financial Statements.
The
Initial Purchasers shall have received the Closing Financial
Statements.
(i)
Material
Adverse Effect.
The
Initial Purchasers shall be satisfied that there has been no Material Adverse
Effect since December 31, 2004.
(j)
Authorizations.
All
requisite material Governmental Authorities and third parties shall have
approved or consented to each of the Transactions and the other transactions
contemplated hereby to the extent required, all applicable appeal periods shall
have expired and there shall be no litigation, governmental, administrative
or
judicial action that has restrained or prevented any of the
Transactions.
(k)
Documents.
The
Initial Purchasers shall have received full and complete copies of all of the
following, each duly executed and delivered by the party or parties thereto:
(1) the Senior Financing Documents and the other Transaction Documents,
and
(2) such other agreements, instruments, certificates and documents as such
Initial Purchaser may reasonably request.
SECTION
3.2. Company’s
Conditions. The
obligations of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment prior to, at or concurrently with
the
Closing, of all of the following conditions:
(a)
Payment
of the Purchase Price.
Each
Initial Purchaser shall have paid its Purchase Price for its Preferred Stock
to
the Company by means of wire transfer of immediately available funds to such
account as the Company may designate in writing to such Initial Purchasers
at
least one (1) Business Day prior to the Closing (or such lesser period of time
as the Company may consent to in writing).
(b)
Transaction
Documents.
The
Company shall be satisfied that all transactions contemplated by or in
connection with the Transaction Documents shall have been consummated in
accordance with the terms thereof.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
To
induce
each Initial Purchaser to enter into this Agreement and to purchase the
Preferred Stock to be purchased by each such Initial Purchaser hereunder, the
Company represents and warrants as follows (and, for all purposes of this
Agreement, all of such representations and warranties shall be understood to
be
made by the Company on (and only on) the date of execution and delivery of
this
Agreement by the Company and the Closing Date).
-12-
SECTION
4.1. Organization,
Power, Authority, etc.
The
Company is a corporation validly organized and existing and in good standing
under the laws of the jurisdiction of its incorporation and has full power
and
authority and holds all requisite Approvals to own and hold its property and
to
conduct its business substantially as currently conducted by it. The Company
has
full power and authority to enter into and perform its obligations under this
Agreement and the Restated Certificate and to issue the Preferred Stock to
be
issued by it hereunder.
SECTION
4.2. Due
Authorization.
The
execution and delivery by the Company of this Agreement, the performance
by
the Company of its obligations hereunder and under the Restated Certificate,
and
the issuance of the Preferred Stock by the Company hereunder have been duly
authorized by all necessary action, do not and will not require any Approval,
do
not and will not conflict with, result in any violation of, or create any Lien
under, any provision of the Restated Certificate, the By-laws or any Applicable
Law or any agreement or instrument to which the Company is a party or may
otherwise be bound.
SECTION
4.3. Validity,
etc.
This
Agreement and the Restated Certificate constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, subject,
however,
as to enforcement only, to bankruptcy, insolvency, reorganization,
moratorium or similar laws at the time in effect affecting the enforceability
of
the rights of creditors generally.
SECTION
4.4. Financial
Information.
Each of
the financial statements together with the related notes (the "Financial
Statements")
included in Brand Services’ Annual Reports on Form 10-K for the fiscal years
ended December 31, 2002, December 31, 2003 and December 31,
2004,
as amended (a) complied as to form in all material respects, as of its
date
of filing with the SEC, with all applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (b) were
prepared in accordance with GAAP as in effect on the date thereof and
(c) fairly present in all material respects in conformity with GAAP
as in
effect on the date thereof the consolidated financial position of Brand Services
and its consolidated Subsidiaries as of and at the dates indicated in such
Form
10-Ks, and the consolidated results of operations and the consolidated cash
flows of Brand Services and its consolidated Subsidiaries for the periods
specified in such Form 10-Ks.
SECTION
4.5. Company
Assets and Liabilities; Material Adverse Effect.
The
Company’s only asset is the Capital Stock of Brand Services. At all times prior
to the Closing, the Company carried on no business or operations other than
holding the Capital Stock of Brand Services. There has been no Material Adverse
Effect since December 31, 2004.
SECTION
4.6. Undisclosed
Liabilities.
Except
as would not reasonably be expected to result in a Material Adverse Effect,
neither Brand Services nor any of its Subsidiaries has any indebtedness,
obligations or liabilities of any kind (whether accrued, absolute, contingent
or
otherwise, and whether due or to become due) (collectively, "Liabilities")
that
would have been required to be reflected in, reserved against or otherwise
described on the consolidated balance sheet of Brand Services as of
December 31, 2004, as set forth in the Annual Report on Form 10-K of
Brand
Services for the year ended December 31, 2004, as amended (the
"2004
Balance Sheet"),
in
accordance with GAAP, which was not fully reflected in, reserved against or
otherwise described in the 2004 Balance Sheet or the notes thereto.
SECTION
4.7. Litigation,
etc.
Except
as set forth on Item
4.7
of the
Disclosure Schedule ("Litigation,
Etc."),
no
litigation, arbitration or governmental investigation or proceeding is pending
or, to the Knowledge of the Company, threatened against the Company or any
of
its Subsidiaries which, if adversely determined, would (i) reasonably be
expected to have a Material Adverse Effect or (ii) prevent or hinder the
consummation of the transactions contemplated by this Agreement.
-13-
SECTION
4.8. Capitalization.
After
giving effect to the transactions contemplated to occur on the Closing Date
pursuant to this Agreement, the Company will have a capitalization as set forth
in Item
4.8
("Capitalization")
of the
Disclosure Schedule. The Preferred Stock to be issued hereunder has been duly
authorized for issuance and, when sold and delivered against payment therefor
as
provided herein, will be validly issued, fully paid and non-assessable and
will
be free and clear of all preemptive rights and Liens except as otherwise
provided herein or in the Restated Certificate and will be entitled to the
respective voting powers, designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof as are set forth with respect thereto in the Restated Certificate.
Except as set forth in the Restated Certificate and in such Item
4.8,
the
Company does not have outstanding any Capital Stock or securities convertible
into or exchangeable for any of its Capital Stock. The Company is not subject
to
any obligation (contingent or otherwise) to repurchase or otherwise acquire
or
retire any of its Capital Stock. Except as set forth on such Item
4.8,
none of
the Company or any of its Subsidiaries has entered into an agreement to register
any of its securities under the Securities Act.
SECTION
4.9. Government
Regulation.
Neither
the Company nor any of its Subsidiaries is (x) an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (y) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, the Commodity Exchange Act or any Applicable Law
limiting its ability to incur or assume indebtedness for borrowed
money.
SECTION
4.10. Title
to Properties.
The
Company and each of its Subsidiaries (x) has good and valid fee title to all
of
the real property which it purports to own (the "Owned
Property"),
free
and clear of all Liens, leases, subleases, rights of use or the like other
than
Permitted Exceptions and (y) valid leasehold estates in all real property leased
by such Person, free and clear of all Liens other than Permitted Exceptions,
in
each case other than as would not reasonably be expected to result in a Material
Adverse Effect.
SECTION
4.11. Material
Contracts.
Except
as set forth on Item
4.11
of the
Disclosure Schedule ("Material
Contracts"),
with
respect to each Material Contract to which any of the Company or any of its
Subsidiaries is a party, neither the Company nor any of its Subsidiaries, as
the
case may be, is in material breach or default under such Material Contract
(nor
does there exist any condition that, with notice or lapse of time or both,
could
cause such a material breach or default thereunder), nor has the Company or
any
such Subsidiary received any written notice of any such breach or default
thereunder, except to the extent such breaches or defaults would not, taken
as a
whole, reasonably be expected to result in a Material Adverse
Effect.
SECTION
4.12. Patents,
Trademarks, etc.
(a)
All
Company Intellectual Property Rights that are material to the business of the
Company or any of its Subsidiaries are owned by the Company or one of its
Subsidiaries free and clear of all Liens other than Permitted Exceptions and
the
Company or such Subsidiary, as the case may be, has unfettered rights to use
and
license such Company Intellectual Property Rights, subject to Applicable Law,
except to the extent the failure to own such Company Intellectual Property
Rights free and clear of all Liens or the inability to use or license such
Company Intellectual Property Rights would not be reasonably expected to result
in a Material Adverse Effect.
-14-
(b)
With
respect to all other Intellectual Property Rights licensed, used or held by
the
Company or any of its Subsidiaries, the Company or one of its Subsidiaries,
has
unfettered rights to use and license such Intellectual Property, subject to
Applicable Law, and there are no ongoing royalties or other payments due from
the Company or any such Subsidiary with respect to such Intellectual Property
Rights, except to the extent the inability to use or license such Intellectual
Property Rights, or the inability to pay such royalties or other payments,
would
not be reasonably expected to result in a Material Adverse Effect.
(c)
As
of the
date hereof there is no legal proceeding pending with respect to any
Intellectual Property Rights owned by the Company or any of its Subsidiaries
(collectively, "Company
Intellectual Property Rights")
and
neither the Company nor, to the Knowledge of the Company, any such Subsidiary,
has received any written notice of any threatened legal proceedings with respect
thereto, except for any legal proceeding which would not reasonably be expected
to result in a Material Adverse Effect.
SECTION
4.13. Taxes.
Except
as would not be reasonably expected to result in a Material Adverse
Effect:
(a)
All
federal income Tax Returns and all other material Tax Returns required to be
filed by or on behalf of the Company or any of its Subsidiaries have been timely
filed with the appropriate taxing authorities in all jurisdictions in which
such
Tax Returns are required to be filed (after giving effect to any extensions
of
time in which to make such filings). All such Tax Returns were correct and
complete in all material respects; provided,
that
for purposes of this Section
4.13,
any
inaccuracy in any Tax Return to the extent that the consequence of such
inaccuracy is a reduction in the amount of a net operating loss or other tax
attribute, shall not be considered a material inaccuracy. All amounts that
are
shown due from the Company on such Tax Returns with respect to the periods
covered thereby have been fully and timely paid or are adequately provided
for
on the Financial Statements in accordance with GAAP. All material Taxes which
the Company was required by Applicable Law to withhold or collect have been
duly
withheld or collected and, to the extent required, have been paid over to the
proper governmental authorities or are held in separate bank accounts for such
purposes.
(b)
All
deficiencies asserted or assessments made as a result of any examinations by
the
Internal Revenue Service or any other taxing authority of the Tax Returns of
or
covering or including the Company or any of its Subsidiaries have been fully
paid or are adequately provided for in the Financial Statements in accordance
with GAAP. As of the date of this Agreement, to the Knowledge of the Company,
there are no Tax audits or investigations by any taxing authority in progress,
nor has the Company received any written notice from any taxing authority that
it intends to conduct such an audit or investigation.
SECTION
4.14. Employee
Benefits; ERISA.
(a)
Except
as
would not reasonably be expected to have a Material Adverse Effect, none of
the
Employee Benefit Plans is subject to Title IV of ERISA.
(b)
Except
as
would not reasonably be expected to have a Material Adverse Effect, each of
the
Employee Benefit Plans and its related trust intended to qualify under Sections
401 and 501(a) of the Code so qualifies and, except as disclosed on Item 4.14(b)
of the
Disclosure Schedule ("Determination
Letters; Qualification"),
is
the subject of a favorable determination letter which covers all changes to
the
plan for which the remedial amendment period (within the meaning of section
401(b)) has expired and, except as disclosed on Item
4.14(b)
of the
Disclosure Schedule ("Determination
Letters; Qualification"),
nothing has occurred with respect to the operation of any such plan which could
cause the loss of such qualification or exemption or the imposition of any
liability, penalty or tax under ERISA or the Code.
-15-
(c)
Except
as
would not reasonably be expected to have a Material Adverse Effect and except
as
disclosed on Item
4.14(c)
of the
Disclosure Schedule ("Required
Payments"),
all
payments (including contributions) required by Applicable Law or by the terms
of
any Multiemployer Plan, Employee Benefit Plan or any agreement relating thereto
have been timely made (including any valid extension).
(d)
Except
as
would not reasonably be expected to have a Material Adverse Effect, there are
no
legal proceedings pending or threatened in writing against any Employee Benefit
Plan, the assets of any trust under any Employee Benefit Plan, or the plan
sponsor, plan administrator or any fiduciary of any Employee Benefit Plan with
respect to the administration or operation of such plans.
(e)
Except
as
would not reasonably be expected to have a Material Adverse Effect, each of
the
Employee Benefit Plans has been maintained in accordance with its terms and
all
Applicable Law.
(f)
Except
as
would not reasonably be expected to have a Material Adverse Effect, there have
been no acts or omissions by the Company or any of its ERISA Affiliates which
have given rise to or may give rise to fines, penalties, taxes or related
charges under section 502 of ERISA or Chapters 43, 47, 68 or 100 of the Code
for
which the Company or any of its ERISA Affiliates may be liable.
(g)
Except
as
would not reasonably be expected to have a Material Adverse Effect, none of
the
Company or any of its Subsidiaries has any liability or contingent liability
for
providing, under any Employee Benefit Plan or otherwise, any post-retirement
medical or life insurance benefits, other than statutory liability for providing
group health plan continuation coverage under Part 6 of Title I of ERISA and
section 4980B of the Code or applicable state law.
(h)
Except
as
would not reasonably be expected to have a Material Adverse Effect, the Company
and its Subsidiaries would have no liability if a complete withdrawal occurred
with respect to each Multiemployer Plan immediately after the Closing Date.
Except as would not reasonably be expected to have a Material Adverse Effect,
with respect to the Multiemployer Plans:
(i)
all
contributions have been made as required by the terms of the plans, the terms
of
any collective bargaining agreements and applicable law;
(ii)
none
of
the Company or any of its ERISA Affiliates has withdrawn, partially withdrawn,
or received any notice of any claim or demand for withdrawal liability or
partial withdrawal liability; and
(iii)
none
of
the Company or any of its ERISA Affiliates has received any notice that any
such
plan is in reorganization, that increased contributions may be required to
avoid
a reduction in plan benefits or the imposition of any excise tax, that any
such
plan is or has been funded at a rate less than required under section 412 of
the
Code, or that any such plan is or may become insolvent.
(i)
The
execution and delivery of this Agreement and the purchase of Preferred Stock
contemplated hereby will be exempt from, or will not involve any transaction
which is subject to, the prohibitions of Section 406 of ERISA and will not
involve any transaction in connection with which a penalty could be imposed
under Section 502(i) of ERISA or for which a tax could be imposed pursuant
to
Section 4975 of the Code. The representation in the next preceding sentence
is
made in reliance upon and subject to the accuracy of the representation in
Section
5.10.
-16-
SECTION
4.15. Environmental
Matters.
Except
as set forth in the Brand Services filings with the SEC or as would not
reasonably be expected to result in a Material Adverse Effect:
(a)
The
Company and each of its Subsidiaries is and since (and including) September
18,
1996 has been, complying with all Environmental Laws which compliance includes
the possession and maintenance of all Permits required by Environmental Laws
which are material for the operation of the business of the Company and each
of
its Subsidiaries. Prior to September 18, 1996, the Company and each of its
Subsidiaries complied in all material respects with all Environmental
Laws.
(b)
Neither
the Company nor any of its Subsidiaries is a party to any legal proceeding
nor,
to the Knowledge of the Company, is any legal proceeding threatened, against
the
Company or any of its Subsidiaries, that, in either case, asserts or alleges
that the Company or any of its Subsidiaries is in violation of, or has potential
Liability under, any Environmental Law which could reasonably be expected,
either individually or when aggregated with all like legal proceedings, to
result in the Company or any of its Subsidiaries incurring Liability and neither
the Company nor any of its Subsidiaries is subject to any outstanding order,
injunction, judgment, decree, ruling, writ, assessment or arbitration award
arising out of any Environmental Law, which would require unbudgeted capital
or
other expenditures.
(c)
There
are
no Liabilities of the Company or any of its Subsidiaries of any kind, whether
accrued, contingent, absolute, determined, determinable or otherwise, arising
under or relating to any Environmental Law or to any Hazardous Material, and,
to
the Knowledge of the Company, there are no facts, conditions, situations or
set
of circumstances which could be reasonably be expected to result in or be the
basis of any such Liability under Environmental Laws.
This
Section
4.15
represents the sole and exclusive representation regarding environmental
matters.
SECTION
4.16. Subsidiaries,
etc.
The
Company has no Subsidiaries other than the Persons listed on Item
4.16(b)
of the
Disclosure Schedule ("Subsidiaries").
SECTION
4.17. Disclosure.
This
Agreement does not contain any untrue statement of a material fact or omit
to
state any material fact necessary in order to make the statements contained
herein not misleading. There is no fact or facts peculiar to the Company or,
to
the Knowledge of the Company, Brand Services or any of their respective
Subsidiaries, which is reasonably likely to result in a Material Adverse Effect
and which has not been set forth in this Agreement, the Disclosure Schedule,
or
the Financing Documents (including, in each case, all schedules and exhibits
thereto).
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE INITIAL PURCHASERS
To
induce
the Company to enter into this Agreement and to issue and sell the Preferred
Stock to be issued and sold by the Company hereunder, each Initial Purchaser
severally represents and warrants to the Company and each of the other Initial
Purchasers as follows (and, for all purposes of this Agreement, all of such
representations and warranties shall be understood to be made by each such
Initial Purchaser on (and only on) the date of execution and delivery of this
Agreement by such Initial Purchaser and the Closing Date).
-17-
SECTION
5.1. Organization;
Authority.
If such
Initial Purchaser is a corporation, then it is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. If such Initial Purchaser is a partnership or limited liability
company, then it is duly formed, validly existing and in good standing (to
the
extent applicable) under the laws of its jurisdiction of formation. If such
Initial Purchaser is a natural Person, then it has the legal capacity to enter
into, and to be bound by, this Agreement. Such Initial Purchaser has the
requisite authority to enter into and perform its obligations under this
Agreement.
SECTION
5.2. Authorization;
No Conflicts.
The
execution, delivery and performance of this Agreement by such Initial Purchaser
has been duly and validly authorized by all necessary action on the part of
such
Initial Purchaser. This Agreement has been duly executed and delivered by such
Initial Purchaser and, assuming the due authorization, execution and delivery
by
the other parties hereto, constitutes the legally valid and binding obligations
of such Initial Purchaser, enforceable against such Initial Purchaser in
accordance with its terms, subject,
however,
as to
enforcement only, to bankruptcy, insolvency, reorganization, moratorium, or
similar laws at the time in effect affecting the enforceability of the rights
of
creditors generally. The execution, delivery and performance of this Agreement
by such Initial Purchaser will not violate, or constitute a breach or default
(whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under, the organizational documents of such Initial Purchaser or
any
Applicable Law.
SECTION
5.3. Consents
and Approvals.
No
consent, waiver, approval or authorization of, or filing, registration or
qualification with, or notice to, any governmental unit or any other Initial
Purchaser is required to be made, obtained or given by the Company in connection
with the execution, delivery and performance of this Agreement.
SECTION
5.4. No
Brokers or Finders.
No
agent, broker, finder, or investment or commercial banker, or other Person
or
firm engaged by or acting on behalf of such Initial Purchaser or its Affiliates
in connection with the negotiation, execution or performance of this Agreement
or the transactions contemplated hereby or thereby, is or will be entitled
to
any brokerage or finder’s or similar fee or other commission as a result of this
Agreement or the transactions contemplated hereby or thereby.
SECTION
5.5. Legal
Proceedings.
There
is no litigation, arbitration or governmental investigation or proceeding is
pending or, to the knowledge of such Initial Purchaser, threatened against
or
affecting such Initial Purchaser that individually or when aggregated with
one
or more other such litigations, arbitrations or governmental investigations
or
proceedings has or might reasonably be expected to have a material adverse
effect on such Initial Purchaser’s ability to execute, deliver and perform this
Agreement.
SECTION
5.6. Private
Offering.
Such
Initial Purchaser is acquiring the Preferred Stock being purchased by it
hereunder for its own account and not with a view to the resale or distribution
thereof.
SECTION
5.7. Accredited
Investor.
Such
Initial Purchaser is an "accredited investor" as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.
SECTION
5.8. Restriction
on Resale.
Such
Initial Purchaser understands and acknowledges that the Preferred Stock being
purchased by such Initial Purchaser hereunder have not been registered for
sale
under any federal or state securities law by reason of a specific exemption
from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Initial Purchaser’s representations set forth herein,
and that such Preferred Stock must be held indefinitely unless subsequently
registered or an exemption from such registration is available.
-18-
SECTION
5.9. Due
Diligence.
Such
Initial Purchaser has had an opportunity to ask questions to and receive answers
from the Company and management of Brand Services concerning the terms of the
Company’s offering of the Preferred Stock hereunder and the business,
management, operations and finances of Brand Services and its Subsidiaries.
Such
Initial Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of its investment
in the Preferred Stock. Notwithstanding the foregoing provisions of this
Section
5.9,
nothing
set forth in this Section
5.9
shall be
deemed to diminish the effectiveness of, or the reliance of such Initial
Purchaser on, the representations and warranties made by the Company in this
Agreement.
SECTION
5.10. Source
of Funds.
At
least one of the following statements is an accurate representation as to each
source of funds (a "Source")
to be
used by such Initial Purchaser to pay the purchase price of the Preferred
Stock:
(a)
the
Source is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE")
95-60
(issued July 12, 1995) and there is no employee benefit plan, treating
as a
single plan, all plans maintained by the same employer or employee organization,
with respect to which the amount of the general account reserves and liabilities
for all contracts held by or on behalf of such plan, exceeds 10% of the total
reserves and liabilities of such general account (exclusive of separate account
liabilities) plus surplus, as set forth in the NAIC Annual Statement filed
with
such Initial Purchaser’s state of domicile;
(b)
the
Source is either (i) an insurance company pooled separate account, within
the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued July
12,
1991) and, except as such Initial Purchaser has disclosed to the Company in
writing pursuant to this paragraph
(b),
no
employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated
to
such pooled separate account or collective investment fund;
(c)
(i) the
Source constitutes assets of an "investment fund" (within the meaning of Part
V
of the QPAM Exemption) managed by a "qualified professional asset manager"
or
"QPAM" (within the meaning of Part V of the QPAM Exemption), (ii) no
employee benefit plan’s assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, (iii) the conditions of Part I(c) and (g) of the
QPAM
Exemption are satisfied, (iv) neither the QPAM nor a person controlling
or
controlled by the QPAM (applying the definition of "control" in Section V(e)
of
the QPAM Exemption) owns a 5% or more interest in the Company and (v) the
identity of such QPAM and the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph
(c);
(d)
the
Source is a governmental plan;
(e)
the
Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this paragraph
(e);
or
(f)
the
Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.
-19-
If
any
Initial Purchaser identifies a plan pursuant to paragraphs (b),
(c)
or
(e)
above,
the Company shall deliver a certificate on the Closing Date to such Initial
Purchaser, which certificate shall state (x) whether it is a party in
interest or a "disqualified person" (as defined in Section 4975(e)(2)
of
the Code), with respect to any plan identified pursuant to paragraphs (b)
or (e)
above, or (y) with respect to any plan, identified pursuant to paragraph (c)
above,
whether it or any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has, at such time or during the immediately preceding one year,
exercised the authority to appoint or terminate said QPAM as manager of the
assets of any plan identified in writing pursuant to paragraph (c)
above or
to negotiate the terms of said QPAM’s management agreement on behalf of any such
identified plans. As used in this Section
5.10,
the
terms "employee benefit plan", "governmental plan", "party in interest" and
"separate account" shall have the respective meanings assigned to such terms
in
Section 3 of ERISA.
ARTICLE
VI
COVENANTS
For
so
long as the Preferred Stock issued and sold by the Company hereunder remain
outstanding, the Company covenants and agrees that it will perform and observe
the following covenants and provisions and will cause each of its Subsidiaries
to perform and observe such of the following covenants and provisions as are
applicable to such Subsidiary:
SECTION
6.1. Compliance
with Laws.
The
Company will comply with, and will cause each of its Subsidiaries to comply
with, all Applicable Laws, except where noncompliance therewith would not
reasonably be expected to result in a Material Adverse Effect.
SECTION
6.2. Inspection
Rights.
Subject
to Section
8.12,
the
Company will, and will cause its Subsidiaries to, permit any Significant Holder
(or any legal or financial representative thereof), at such Holder’s expense, to
examine the books and records of the Company and its Subsidiaries at the
Company’s and its Subsidiaries’ premises and permit any such Significant Holder
to meet, and to discuss the business affairs, finances and accounts of the
Company and its Subsidiaries with any of their respective officers and
directors; provided,
that,
(a) such examinations and discussions are conducted at reasonable times
and
intervals during normal business hours and upon reasonable prior notice to
the
Company and its Subsidiaries, (b) such examinations and discussions
shall
not unreasonably interfere with the operation of the Company’s and its
Subsidiaries’ business and (c) except for Initial Purchasers, no
Significant Holder shall be entitled to engage in more than one such examination
and discussion in any fiscal year of the Company or within 30 days of any such
examination or discussion conducted by any other Holder; provided
that,
upon the occurrence and during the continuance of an Event of Noncompliance,
this clause
(c)
shall
not be in effect, and any such examination during the period when an Event
of
Noncompliance is continuing shall be at the Company’s expense.
SECTION
6.3. Limitations
on Restrictions on Distributions from Subsidiaries.
Except
as may be required under or permitted by the Financing Documents, the Company
will not permit any of its Subsidiaries to create or otherwise cause or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any of the Company’s Subsidiaries to (a) pay dividends or make
any other distribution on such Subsidiary’s Capital Stock or pay any
indebtedness or other obligations of such Subsidiary to the Company,
(b) make any loans or advances to the Company or (c) transfer
any of
such Subsidiary’s property or assets to the Company; provided
that the
Company will not, and will not permit any of its Subsidiaries to, consent or
otherwise agree, directly or indirectly, to any extension of the term of the
Financing Documents, whether as a result of an amendment, modification,
refinancing or otherwise, or otherwise enter into any new Financing Documents
after the date hereof, if, as a result of such extension (or such new Financing
Documents), any such consensual encumbrance or restriction contained in such
Financing Documents would remain in effect and prohibit, in whole or in part,
the Company’s ability at any time on or after October 16, 2014 to manditorily
redeem the Preferred Stock pursuant to the Restated Certificate.
-20-
SECTION
6.4. Limitations
on Transactions with Affiliates.
Except
for Exempt Affiliate Transactions, the Company will not, nor will it permit
any
of its Subsidiaries to, enter into any transaction with any stockholder,
director, officer or employee of the Company, or with any member of the family
or any Affiliate of any such Person, except for transactions the terms of which
are no less favorable to the Company than the terms otherwise obtainable from
an
unaffiliated third party through arms-length negotiations.
SECTION
6.5. Limitations
on Line of Business.
The
Company will not engage in any business or conduct any operations other than
the
ownership of Capital Stock, including Capital Stock of Brand Services. The
Company will not permit Brand Services or any of its Subsidiaries to engage
in
any business other than any business in which Brand Services or any of its
Subsidiaries was engaged in on the Closing Date (after giving effect to the
transactions contemplated by the Asset Purchase Agreement) and any business
related, ancillary or complementary thereto.
SECTION
6.6. Financial
Statements.
The
Company will deliver to each Holder:
(a)
Quarterly
Statements.
Within
forty-five (45) days after the end of each of the first three fiscal quarters
of
each fiscal year, consolidated statements of income and cash flows of the
Company and its Subsidiaries as of the end of and for such fiscal quarter and
for the period from the beginning of the current fiscal year to the end of
such
fiscal quarter, and consolidated balance sheets of the Company and its
Subsidiaries as at the end of each such period, setting forth, in each case,
in
comparative form, figures for the corresponding period in the preceding fiscal
year, all in reasonable detail and prepared in accordance with GAAP and
certified by an appropriate officer of the Company as fairly presenting, in
all
material respects, the financial position of the Company and its Subsidiaries
and their results of operations and cash flows, subject to normal year-end
adjustments and the absence of footnotes;
(b)
Annual
Statements.
Within
ninety (90) days after the end of each fiscal year, consolidated statements
of
income and cash flows and consolidated statements of stockholders’ equity of the
Company and its Subsidiaries for such year, and consolidated balance sheets
of
the Company and its Subsidiaries as at the end of such year, setting forth,
in
each case in comparative form corresponding figures from the preceding fiscal
year, all in reasonable detail and prepared in accordance with GAAP and
accompanied by an opinion thereon of independent public accountants of
recognized national standing reasonably selected by the Company to the effect
that such financial statements present fairly, in all material respects, the
financial position of the Company and its Subsidiaries and the results of their
operations and cash flows and have been prepared in accordance with GAAP,
consistently applied, and such opinion shall be without limitation as to the
scope of the audit or other qualification;
(c)
Pro
Forma Financial Statements.
Within
seventy-five (75) days after the Closing Date, the pro
forma
consolidated balance sheet and related pro forma consolidated statement of
income of the Company and its Subsidiaries as of and for the twelve-month period
ending on the last day of the most recently completed four-fiscal quarter period
for which financial statements are required to be delivered pursuant to clause
(ii) of the definition of Closing Financial Statements, prepared, in each case,
after giving effect to each of the Transactions as if each had occurred as
of
such date (in the case of such balance sheet) or at the beginning of such period
(in the case of such other financial statements).
-21-
(d)
SEC
and Other Reports.
Promptly after the same are sent, copies of all financial statements and reports
which the Company or any of its Subsidiaries sends to its shareholders
generally, and all financial statements and audit reports which the Company
or
any of its Subsidiaries is required to deliver pursuant to the Senior Loan
Agreement (and any replacement thereof), other than financial statements and
reports otherwise deliverable hereunder, and promptly after the same are filed,
copies of all financial statements and regular, periodic or special reports
which the Company or any such Subsidiary may make to, or file with, the
Securities and Exchange Commission or any successor or similar Governmental
Authority;
(e)
Officer’s
Certificates.
Within
the periods provided in clause
(a)
and
clause (b)
above, a
certificate of an appropriate officer of the Company stating that such officer
has reviewed the provisions of this Agreement and setting forth whether there
existed as of the date of such financial statements and whether, to the
Knowledge of the Company, there exists on the date of the certificate or existed
at any time during the period covered by such financial statements any matured
or unmatured Event of Noncompliance and, if any such condition or event exists
on the date of the certificate, specifying the nature and period of existence
thereof and the action the Company is taking and proposes to take with respect
thereto;
(f)
Projections.
No
later than thirty (30) days prior to the end of each fiscal year of the Company,
projections of Brand Services’ and its Subsidiaries’ consolidated financial
performance for the forthcoming fiscal year;
(g)
Amendments.
Within
thirty (30) days of any material change, modification, amendment, revision,
waiver or consent to the Senior Financing Documents or Senior Subordinated
Note
Financing Documents, written notice thereof together with copies of all executed
instruments relating thereto and such other information as may be necessary
or
appropriate to explain the reason for such alteration, consent or waiver;
(h)
Notices.
Promptly upon the Company having obtaining knowledge of the occurrence thereof,
written notice of any of the following:
(i)
the
occurrence or existence of any Event of Noncompliance;
(ii)
the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary which would reasonably be expected
to
result in a Material Adverse Effect;
(iii)
any
event
having or which would reasonably expected to have a Material Adverse Effect;
and
(i)
Requested
Information.
Promptly, such additional business, financial, and other information concerning
the Company or any of its Subsidiaries as any Significant Holder may reasonably
request (including all documentation and other information such Holder
reasonably requests in order to comply with its ongoing obligations under
applicable "know your customer" and anti-money laundering rules and regulations,
including the Patriot Act).
-22-
SECTION
6.7. Restricted
Payments.
The
Company will not: (1) declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities
on
account of any shares of any class of its Capital Stock, (2) purchase,
redeem or otherwise acquire for value any shares of its Capital Stock, or
(3) make any payment or prepayment of principal of, premium, if any,
interest, redemption, exchange, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any class of security ranking junior in
priority of payment to the Preferred Stock; provided,
however,
that
the Company may make (a) payments on and with respect to the Preferred
Stock when due under the terms of the Restated Certificate and (b) repurchases
or redemptions of Preferred Stock pursuant to the provisions of the Restated
Certificate.
SECTION
6.8. Amendments.
The
Company will not permit any amendment or other modification to this Agreement
or
the Restated Certificate which would adversely affect the Preferred Stock of
any
Holder (an "Affected
Holder")
in any
of the following manners without the prior written consent of such Affected
Holder: (1) any decrease in the amount of any payment or other distribution
to such Affected Holder in respect of its Preferred Stock, (2) any
extension or other delay, or any acceleration or similar change, in the time
for
any payment or other distribution (including in respect of any mandatory or
voluntary redemption) to such Affected Holder in respect of its Preferred Stock
as set forth herein or in the Restated Certificate, (3) any modification
to
(i) this Section
6.8,
or
Section 6.9
or
8.1(a)
or, with
respect to any rights or remedies which would arise as a result of a breach
of
this Section
6.8,
Section
7.2
or
8.18,
(ii) any term or provision of the Restated Certificate relating to the
Preferred Stock or (iii) the status of such Affected Holder’s Preferred
Stock as having the highest priority and preference in right of payment and
distributions of all Capital Stock of the Company, (4) any issuance
or
creation of any series or class of Capital Stock ranking in respect of
distributions or any other right of payment senior to, or pari passu with,
such
Affected Holder’s Preferred Stock, (5) any modification to the definitions
of Change of Control, Preferred Stock or Liquidation Value, in each case as
set
forth in the Restated Certificate as of the date hereof, as such definitions
relate to such Affected Holder’s Preferred Stock, (6) modify the limited
liability of such Affected Holder in a manner adverse to such Affected Holder
or
otherwise impose any obligation or liability upon such Affected Holder or
(7) have the effect of treating such Affected Holder disproportionately
adverse, in relation to other Holders.
ARTICLE
VII
EVENTS
OF
NONCOMPLIANCE
SECTION
7.1. Events
of Noncompliance.
The
occurrence of any of the following events, for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or
be
effected by operation of law or otherwise), shall constitute an "Event
of Noncompliance":
(a)
the
Company defaults in any payment, when due, with respect to any Preferred Stock;
or
(b)
the
Company fails to perform or observe any agreement, term or condition contained
herein (other than matters to which clause (a)
above
applies) or in the Restated Certificate (solely to the extent that such
agreement, term or condition relates to the Company’s obligations to the
Holders) and such failure shall not be remedied within forty-five (45) days
after the Company has received notice or otherwise has actual knowledge thereof;
or
(c)
any
representation or warranty made by the Company herein or any writing furnished
to the Holders in connection herewith shall be false in any material respect
on
the date as of which made; or
(d)
the
Company or any of its Significant Subsidiaries makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts become
due; or
-23-
(e)
any
decree or order for relief in respect of the Company or any its Significant
Subsidiaries is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the "Bankruptcy
Law"),
of
any jurisdiction; or
(f)
the
Company or any of its Significant Subsidiaries petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by,
a
trustee, receiver, custodian, liquidator or similar official of the Company
or
such Subsidiary, or of any substantial part of the assets of the Company or
such
Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United
States, or any proceedings relating to the Company or such Subsidiary under
the
Bankruptcy Law of any other jurisdiction or any involuntary proceeding under
any
Bankruptcy Law shall be commenced and continue unstayed and in effect for more
than 60 consecutive days.
SECTION
7.2. Remedies.
Upon
the occurrence of any Event of Noncompliance and during the continuance thereof,
any Holder may proceed to protect and enforce its rights under this Agreement
and the Restated Certificate by exercising such remedies as are available to
such Holder in respect thereof under Applicable Law (all such remedies being
cumulative and non-exclusive), either by suit in equity or by action at law,
or
both, whether for specific performance of any covenant or other agreement
contained in this Agreement or the Restated Certificate; provided,
however,
that
the foregoing terms of this Section 7.2
shall
not be construed to provide any Holder the right upon the occurrence of an
Event
of Noncompliance to require the redemption of such Holder’s Preferred Stock
prior to the time required for any redemption thereof under the terms of the
Restated Certificate.
ARTICLE
VIII
MISCELLANEOUS
SECTION
8.1. Waivers,
Amendments, etc.
(a)
Subject
to Section
6.8
hereof,
the provisions of this Agreement may from time to time be amended, waived or
otherwise modified, if such amendment, waiver or modification is in writing
and
consented to by the Company and the Requisite Holders.
(b)
No
failure or delay on the part of the Company or any Holder in exercising any
power or right under this Agreement shall operate as a waiver thereof, nor
shall
any single or partial exercise of any such power or right preclude any other
or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on the Company or any Holder in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by
the
Company or any Holder under this Agreement shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent transactions.
No
waiver or approval hereunder shall require any similar or dissimilar waiver
or
approval thereafter to be granted hereunder.
SECTION
8.2. Notices.
All
notices and other communications provided to any party hereto under this
Agreement shall be in writing and addressed or delivered to it at its address
set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice, if sent
by mail or courier and properly addressed and prepaid, shall be deemed given
when received; any notice, if transmitted by facsimile, shall be deemed given
when transmitted and electronically confirmed.
-24-
SECTION
8.3. Indemnification;
Expenses, Etc.
(a)
The
Company shall pay (i) all reasonable out-of-pocket expenses incurred
by the
Initial Purchasers, including the reasonable fees, charges and disbursements
of
one special counsel for all Initial Purchasers, in connection with the
preparation of this Agreement and the other Closing Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) any
stamp or similar taxes which may be determined to be payable in connection
with
the execution, delivery or performance of this Agreement and the other Closing
Documents or any modification, amendment or alteration of the terms or
provisions of this Agreement and the other Closing Documents and any issue
taxes
in respect of the issuance of any Preferred Stock hereunder to the Initial
Purchasers and (iii) all out-of-pocket expenses incurred by the Holders
including the fees, charges and disbursements of one special counsel for all
Holders, in connection with the enforcement or protection of its rights in
connection with the Closing Documents, including its rights under this Section,
or in connection with the Preferred Stock issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Preferred Stock.
(b)
The
Company shall indemnify the Holders and each of their respective Affiliates
(each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including, without limitation and
as
incurred, reasonable costs of investigating, preparing or defending any such
claim or action, whether or not such Indemnitee is a party thereto), including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in
connection with, or as a result of (i) the execution, delivery or
performance of this Agreement or any other Closing Document or the consummation
of the transactions contemplated hereby, or (ii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided
that
such indemnity shall not, as to any Indemnitee, be available to the extent
that
such losses, claims, damages, liabilities or related expenses resulted from
the
gross negligence or willful misconduct of such Indemnitee or any Affiliate
of
such Indemnitee (or of any officer, director, employee, advisor or agent of
such
Indemnitee or any such Indemnitee’s Affiliates) or to the extent such damages
constitute special, indirect or consequential damages (as opposed to direct
or
actual damages); and provided further
that,
for the purposes of the foregoing proviso, the Company and its Subsidiaries
shall be deemed not to be Affiliates of any Holders.
(c)
All
amounts due under this Section shall be payable promptly after written demand
therefor.
SECTION
8.4. Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction.
SECTION
8.5. Headings.
The
various headings of this Agreement are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement or any provisions
hereof.
SECTION
8.6. Counterparts.
This
Agreement may be executed by the parties hereto in several
counterparts, each of which shall be executed by the Company and the Initial
Purchasers and be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION
8.7. Entire
Agreement.
This
Agreement and the Restated Certificate constitute the entire understanding
among
the parties hereto with respect to the subject matter hereof and supersede
any
prior agreements, written or oral, with respect thereto.
-25-
SECTION
8.8. Governing
Law; Jurisdiction.
THIS
AGREEMENT, THE LEGAL RELATIONS BETWEEN THE PARTIES AND ANY ACTION, COMPLAINT,
PETITION, INVESTIGATION, SUIT OR OTHER PROCEEDING, WHETHER CIVIL OR CRIMINAL,
IN
LAW OR IN EQUITY, OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY, WHETHER
CONTRACTUAL OR NON-CONTRACTUAL, INSTITUTED BY ANY PARTY WITH RESPECT TO MATTERS
ARISING UNDER OR IN CONNECTION WITH OR IN RESPECT OF THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO THE NEGOTIATION, EXECUTION, INTERPRETATION, COVERAGE, SCOPE,
PERFORMANCE, BREACH, TERMINATION, VALIDITY, OR ENFORCEABILITY OF THIS AGREEMENT,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND WITHOUT
REGARD TO CONFLICTS OF LAW DOCTRINES, EXCEPT TO THE EXTENT THAT CERTAIN MATTERS
ARE PREEMPTED BY FEDERAL LAW OR ARE GOVERNED AS A MATTER OF CONTROLLING LAW
BY
THE LAW OF THE JURISDICTION OF ORGANIZATION OF THE RESPECTIVE PARTIES. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS FOR ITSELF AND ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK OR ANY STATE COURT SITTING
IN
THE COUNTY OF NEW YORK (AND OF THE APPROPRIATE APPELLATE COURTS) WITH RESPECT
TO
ANY ACTION SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS AND ANY OBJECTION TO VENUE LAID THEREIN AND AGREES TO BE BOUND
BY
ANY JUDGMENT RENDERED THEREBY ARISING UNDER, OUT OF, IN RESPECT OF OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER IRREVOCABLY ACCEPTS FOR
ITSELF AND ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, SERVICE OF PROCESS
PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND THE RULES OF ITS COURTS,
AND
DESIGNATES AND APPOINTS THE INDIVIDUALS IDENTIFIED IN OR PURSUANT TO
SECTION 8.9
HEREOF TO RECEIVE NOTICES ON ITS BEHALF, AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH ACTION, COMPLAINT, PETITION, INVESTIGATION,
SUIT OR OTHER PROCEEDING, WHETHER CIVIL OR CRIMINAL, IN LAW OR IN EQUITY, OR
BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF
ANY
SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE DESIGNATED
AGENT OF EACH PARTY AT ITS ADDRESS PROVIDED IN SECTION 8.9;
PROVIDED
THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH
COPY
SHALL NOT AFFECT THE VALIDITY OF THE SERVICE OF SUCH PROCESS. IF ANY AGENT
SO
APPOINTED REFUSES TO ACCEPT SERVICE, THE DESIGNATING PARTY HEREBY AGREES THAT
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
IT
IN THE APPLICABLE JURISDICTION MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO ITS ADDRESS PROVIDED IN SECTION 8.9.
EACH PARTY HEREBY ACKNOWLEDGES THAT SUCH SERVICE SHALL BE EFFECTIVE AND BINDING
IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW OR SHALL LIMIT THE RIGHT OF ANY PARTY
TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY IN ANY OTHER
JURISDICTION, EXCEPT TO THE EXTENT EXPRESSLY OTHERWISE PROVIDED IN
SECTION 8.9.
-26-
SECTION
8.9. Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given (i) when delivered personally, (ii) on the third Business
Day after being mailed by certified mail, return receipt requested, (iii) the
next Business Day after delivery to a recognized overnight courier, or (iv)
upon
transmission and confirmation of receipt by a facsimile operator if sent by
facsimile (and shall also be transmitted by facsimile to the Persons receiving
copies thereof), to the parties at the following addresses or facsimile numbers
(or to such other address and facsimile number as a party may have specified
by
notice given to the other party pursuant to this provision):
If
to the
Company, to:
Brand
Holdings, LLC
c/o
JPMorgan Partners
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile:
Attention:
with
a
copy to:
Brand
Intermediate Holdings, Inc.
c/o
JPMorgan Partners
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile:
Attention:
with
a
copy to (which shall not constitute notice):
Mayer,
Brown, Xxxx & Maw LLP
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxx X. Xxxxxxxxxxxxx
If
to any
Initial Purchaser, at the address set forth under such Initial Purchaser’s name
on the signature pages hereto.
SECTION
8.10. Waiver
of Jury Trial.
EACH
OF THE
INITIAL PURCHASERS AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH,
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY INITIAL PURCHASER OR THE COMPANY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE INITIAL PURCHASERS AND THE COMPANY
ENTERING INTO THIS AGREEMENT.
-27-
SECTION
8.11.
Successors
and Assigns; Permitted Transfers.
This
Agreement shall bind and inure to the benefit of the Company and the Holders
and
their respective successors and permitted assigns. Upon the transfer of any
Preferred Stock purchased hereunder in accordance with the terms hereof, the
transferee shall be bound by, and entitled to the benefits of, this Agreement
and the Restated Certificate with respect to such Preferred Stock in the same
manner as the transferring Holders. Any term or provision hereof or of the
Restated Certificate to the contrary notwithstanding, Holders who are not
Initial Purchasers may not, without the prior written consent of the Company
and
a majority in interest of the Initial Purchasers, assign, transfer or otherwise
convey any Preferred Stock (or rights or interests in Preferred Stock) held
by
them, except to (a) Affiliates (x) which are controlled by such Holders and
(y)
as to which at the time of such assignment or transfer, such Holder presently
intends to maintain ownership of such Affiliate or (b) any Initial Purchaser;
provided,
however,
that,
with respect to any assignment or transfer of Preferred Stock by any Holder
(including any assignment or transfer of rights or interests in any Preferred
Stock by any Holder), the assignee or transferee thereof shall agree in writing
to be bound by the terms and provisions of this Agreement, including
Section
8.12,
as if
such assignee or transferee was a signatory hereto.
SECTION
8.12. Confidentiality.
For the
purposes of this Section
8.12,
"Confidential
Information"
means
information delivered to any Holder by or on behalf of the Company in connection
with the transactions contemplated by or otherwise pursuant to this Agreement
that is proprietary in nature and that was clearly marked or labeled or
otherwise adequately identified when received by such Holder as being
confidential information of the Company; provided
that
such term does not include information that (a) was publicly known or
otherwise known to such Holder prior to the time of such disclosure and not
subject to a confidentiality agreement of which such Holder was aware,
(b) subsequently becomes publicly known through no act or omission by
such
Holder or any person acting on such Holder’s behalf, (c) otherwise becomes
known to such Holder other than through disclosure by the Company and is not
subject to this or another agreement of confidentiality or (d) constitutes
financial statements delivered to such Holder hereunder that are otherwise
publicly available. Each Holder will maintain the confidentiality of such
Confidential Information in accordance herewith, provided
that
such Holder may deliver or disclose Confidential Information to (i) such
Holder’s directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Holder’s Preferred Stock
and other interests in the Company), (ii) such Holder’s financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information in accordance with the terms of this Section as if they were parties
hereto, (iii) any Institutional Investor to which such Holder sells
or
offers to sell any Preferred Stock or any part thereof or any participation
therein, provided
such
sale is permitted hereunder and such Person has agreed in writing prior to
its
receipt of such Confidential Information to be bound by the provisions of this
Section as if it was a signatory hereto), (iv) any federal or state
regulatory authority having jurisdiction over such Holder if such authority
has
requested such information and upon advice of counsel, such information must
be
delivered to such authority without requiring such authority to be bound by
this
Section, (v) the National Association of Insurance Commissioners or
any
similar organization, or any nationally recognized rating agency that requires
access to information about such Holder’s investment portfolio or (vi) any
other Person to which such delivery or disclosure may be necessary or
appropriate to effect compliance with any Applicable Law, including in respect
of any subpoena or legal process.
SECTION
8.13. Parties
in Interest.
This
Agreement shall be binding upon and inure to the benefit of each party hereto,
and nothing in this Agreement, express or implied, is intended to confer upon
any other Person any rights or remedies of any nature whatsoever (including,
without limitation, third party beneficiary rights) under or by reason of this
Agreement or by Applicable Law. Nothing in this Agreement is intended to relieve
or discharge the obligation of any third person to (or to confer any right
of
subrogation or action over against) any party to this Agreement.
-28-
SECTION
8.14. Severalty
of Obligations.
The
sales of the Preferred Stock to the Initial Purchasers hereunder are to be
several sales, and the obligations of the Holders under this Agreement are
several obligations. Except as otherwise expressly provided herein, no failure
by any Holders to perform its obligations under this Agreement shall relieve
any
other Holders or the Company of any of its obligations hereunder, and no Holders
shall be responsible for the obligations of, or any action taken or omitted
by,
any other Holders hereunder.
SECTION
8.15. Survival
of Representations and Warranties.
All
representations and warranties of the Company contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive
the
Closing Date.
SECTION
8.16. Independence
of Covenants.
All
covenants hereunder shall be given independent effect so that if a particular
action or condition is prohibited by any one of such covenants, the fact that
it
would be permitted by an exception to, or otherwise be in compliance within
the
limitations of, another covenant shall not (i) avoid the occurrence
of an
Event of Noncompliance if such action is taken or such condition exists or
(ii) in any way prejudice an attempt by any Holder to prohibit through
equitable action or otherwise the taking of any action by the Company or any
Subsidiary which would result in an Event of Noncompliance.
SECTION
8.17. Further
Assurances.
The
Company shall duly execute and deliver, or cause to be duly executed and
delivered, at its own cost and expense, such further instruments and documents
and to take all such action, in each case as may be necessary or proper in
the
reasonable judgment of a Significant Holder to carry out the provisions and
purposes of this Agreement and the other Closing Documents.
SECTION
8.18. Specific
Performances; Remedies.
Damages
in the event of breach of this Agreement or any other Closing Document by the
Company would be difficult or impossible to ascertain and it is therefore agreed
that the Holders, in addition to and without limiting any other remedy or right
it may have, will have the right to an injunction or other equitable relief
in
any court of competent jurisdiction enjoining any such breach and enforcing
specifically the terms and provisions hereof and thereof, and the Company hereby
waives any and all defenses it may have on the ground of lack of jurisdiction
or
competence of the court to grant such an injunction or other equitable relief
or
lack of proof of actual damages. The existence of the rights under this Section
will not preclude the Holders from pursuing any other right or remedy which
may
be available at law or in equity.
[Remainder
of Page Intentionally Left Blank]
-29-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized as of the day and year
first
above written.
| BRAND INTERMEDIATE HOLDINGS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxx | |
|
Xxxxxxx Xxxxxxx |
||
| Secretary | ||
Brand
Holdings, LLC
c/o
JPMorgan Partners
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Telecopy:
-30-
INITIAL PURCHASERS:
| X.X.XXXXXX PARTNERS GLOBAL INVESTORS, L.P. | ||
| |
By: By:
|
JPMP
Global Investors, L.P., its General Partner
JPMP Capital Corp., its General Partner |
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-31-
| X.X.XXXXXX PARTNERS GLOBAL INVESTORS (CAYMAN) L.P. | ||
| |
By: By:
|
JPMP
Global Investors, L.P., its General Partner
JPMP Capital Corp., its General Partner |
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-32-
| X.X.XXXXXX PARTNERS GLOBAL INVESTORS, A. L.P. | ||
| |
By: By:
|
JPMP
Global Investors, L.P., its General Partner
JPMP
Capital Corp., its General Partner
|
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-33-
| X.X.XXXXXX PARTNERS GLOBAL INVESTORS (CAYMAN) II, L.P. | ||
| |
By: By:
|
JPMP
Global Investors, L.P., its General Partner
JPMP Capital Corp., its General Partner |
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-34-
| X.X.XXXXXX PARTNERS (BHCA), L.P. | ||
| |
By: By:
|
JPMP Master
Fund Manager, its General Partner
JPMP Capital Corp., its General Partner |
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-35-
| X.X.XXXXXX PARTNERS GLOBAL INVESTORS (SELLDOWN), L.P. | ||
| |
By: By:
|
JPMP
Master Fund Manager, its General Partner
JPMP Capital Corp., its General Partner |
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |
|
Xxxxxxxxxxx X. Xxxxxxx |
||
| Partner | ||
-36-
SCHEDULE
I
Purchase
Price
|
Name
|
Purchase
Price
|
Preferred
Stock
|
|
X.X.
Xxxxxx Partners Global Investors, L.P.
|
$4,055,373
|
4,055
|
|
X.X.
Xxxxxx Partners Global Investors (Cayman), L.P.
|
$2,035,981
|
2,036
|
|
X.X.
Xxxxxx Partners Global Investors A, L.P.
|
$623,123
|
623
|
|
X.X.
Xxxxxx Partners Global Investors (Cayman) II, L.P.
|
$227,687
|
228
|
|
X.X.
Xxxxxx Partners (BHCA), L.P.
|
$21,684,760
|
21,685
|
|
X.X.
Xxxxxx Partners Global Investors (Selldown), L.P.
|
$1,373,077
|
1,373
|
-37-
