EXHIBIT 10.7
THE XXXXXXX XXXXXX COMPANY
$100,000,000
10 3/8% SENIOR SUBORDINATED NOTES DUE 2006
PURCHASE AGREEMENT
November 20, 1996
BT SECURITIES CORPORATION
BANKERS TRUST INTERNATIONAL PLC
CHASE SECURITIES INC.
XXXXXXX, XXXXX & CO.
c/o BT Securities Corporation
Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Xxxxxxx Xxxxxx Company, a Massachusetts corporation (the
"COMPANY"), hereby confirms its agreement with you (the "INITIAL PURCHASERS"),
as set forth below.
1. THE NOTES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Initial Purchasers $100,000,000
aggregate principal amount of its 10 3/8% Senior Subordinated Notes due 2006,
Series A (the "NOTES"). The Notes are to be issued under an indenture (the
"INDENTURE") to be dated as of November 25, 1996 by and between the Company and
State Street Bank and Trust Company, as Trustee (the "TRUSTEE").
The Notes will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "ACT"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated November 7, 1996 (the "PRELIMINARY
MEMORANDUM"), and a final offering memorandum dated November 20, 1996 (the
"FINAL MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each
herein being referred to as a "MEMORANDUM") setting forth or including a
description of the terms of the Notes, the terms of the offering of the Notes, a
description of the Company and any material developments relating
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to the Company occurring after the date of the most recent historical financial
statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Notes will be entitled to the benefits of the Exchange and Registration
Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed,
among other things, to file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the Notes or the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date thereof
and at all times subsequent thereto up to the Closing Date (as defined in
Section 3 below) contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance upon and
in conformity with information relating to any of the Initial Purchasers
furnished to the Company in writing by any of the Initial Purchasers expressly
for use in the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(b) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the subsidiaries of the
Company are listed in SCHEDULE 2 attached hereto (each, a "SUBSIDIARY" and
collectively, the "SUBSIDIARIES"); all of the outstanding shares of capital
stock of the Company and the Subsidiaries have been, and as of the Closing Date
will be, duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights. Except as
set forth in the Final Memorandum, all of the outstanding shares of capital
stock of the Company and of each of the Subsidiaries will be free and clear of
all liens, encumbrances, equities and claims or restrictions on transferability
(other than those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting; except as set forth in the Final Memorandum,
there are no (i) options, warrants or other rights to purchase, (ii) agreements
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or other obligations to issue or (iii) other rights to convert any obligation
into, or exchange any securities for, shares of capital stock of or ownership
interests in the Company or any of the Subsidiaries outstanding. Except for the
Subsidiaries or as disclosed in the Final Memorandum, the Company does not own,
directly or indirectly, any shares of capital stock or any other equity or
long-term debt securities or have any equity interest in any firm, partnership,
joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation; each of the Company and the Subsidiaries has all
requisite corporate power and authority to own its properties and conducts its
business as now conducted and as described in the Final Memorandum, and is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified or to have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, condition (financial
or otherwise), prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a "MATERIAL ADVERSE EFFECT").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes and the
Exchange Notes. The Notes, when issued, will be substantially in the form of
Exhibit A to the Indenture. The Notes and the Exchange Notes have each been
duly and validly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture
and, in the case of the Notes, when delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will constitute valid
and legally binding obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws now or hereafter in effect relating to or affecting creditors' rights and
remedies generally, and (ii) general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The Indenture
conforms to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA"), applicable to an
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indenture which is qualified thereunder (assuming the due authorization,
execution and delivery of the Indenture by the Trustee provided that no
representation or warranty is made with respect to the Statement of Eligibility
of the Trustee on Form T-1). The Indenture has been duly and validly authorized
by the Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally and (ii) general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Initial
Purchasers), will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws now or
hereafter in effect relating to or affecting creditors' rights and remedies
generally and (ii) general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(h) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the issuance and
sale by the Company of the Notes to the Initial Purchasers or the consummation
by the Company of the other transactions contemplated hereby, except such as
have been or, prior to the Closing Date, will have been obtained and such as may
be required (i) under state securities or "Blue Sky" laws in
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connection with the purchase and resale of the Notes by the Initial Purchasers
and (ii) by federal or state securities regulatory authorities in connection
with or pursuant to the Registration Rights Agreement. None of the Company or
the Subsidiaries is (i) in violation of its certificate of incorporation or
bylaws (or similar organizational document), (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to any of them
or any of their respective properties or assets, except for any such breach or
violation which would not, individually or in the aggregate, have a Material
Adverse Effect, or (iii) in breach of or default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which any of them is a party or to which any of them or their
respective properties or assets is subject (collectively, "CONTRACTS"), except
for any such breach, default, violation or event which would not have,
individually or in the aggregate, a Material Adverse Effect.
(i) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Registration Rights Agreement and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Notes to the
Initial Purchasers) will not conflict with or constitute or result in a breach
of or a default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such conflict, breach, violation,
default or event which would not have, individually or in the aggregate, a
Material Adverse Effect, (ii) the certificate of incorporation or bylaws (or
similar organizational document) of the Company or any of the Subsidiaries, or
(iii) (assuming compliance with all applicable state securities or "Blue Sky"
laws and assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 8 hereof and assuming compliance with the Act with
respect to the exchange of the Notes for the Exchange Notes and the obligations
of the Company under the Registration Rights Agreement) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except for any
such conflict, breach or violation which would not have, individually or in the
aggregate, a Material Adverse Effect.
(j) The audited consolidated financial statements of the Company and
the Subsidiaries included in the Final Memorandum
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present fairly in all material respects the financial position, results of
operations and cash flows of the Company and the Subsidiaries at the dates and
for the periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. The summary and selected financial and statistical
data in the Final Memorandum present fairly in all material respects the
information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except as
otherwise stated therein. Price Waterhouse LLP and Coopers & Xxxxxxx LLP are
each an independent public accounting firm within the meaning of the Act and the
rules and regulations promulgated thereunder.
(k) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), (ii) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, and (iii) have been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma financial data
and other pro forma financial information included in the Final Memorandum are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(l) Except as disclosed in the Final Memorandum, each of the Company
and the Subsidiaries possesses all material licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("PERMITS"), except where the failure to obtain such Permits would
not have, individually or in the aggregate, a Material Adverse Effect; and none
of the Company or the Subsidiaries has received any notice of any proceeding
relating to revocation or modification of any such Permit, except as described
in the Final Memorandum and except where such revocation or modification would
not have, individually or in the aggregate, a Material Adverse Effect.
(m) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described
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in the Final Memorandum or as reflected in the pro forma financial statements
included therein, (i) none of the Company or the Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into or agreed to
enter into any transactions or contracts (written or oral) not in the ordinary
course of business which liabilities, obligations, transactions or contracts
would, individually or in the aggregate, be material to the business, condition
(financial or otherwise), prospects or results of operations of the Companies
and its Subsidiaries, taken as a whole, (ii) none of the Company or the
Subsidiaries has purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock (other than with respect to any of such Subsidiaries, the purchase of, or
dividend or distribution on, capital stock owned by the Company or in connection
with the Acquisition (as defined in the Final Memorandum)) and (iii) there has
been no material change in the capital stock or long-term indebtedness of the
Company or the Subsidiaries.
(n) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not have, individually or in the
aggregate, a Material Adverse Effect, and has paid all material taxes shown as
due thereon; and other than tax deficiencies which the Company or any Subsidiary
is contesting in good faith and for which the Company or such Subsidiary has
provided adequate reserves, there is no tax deficiency that has been asserted
against the Company or any of the Subsidiaries that would have, individually or
in the aggregate, a Material Adverse Effect.
(o) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries believe to be reliable and accurate in all material respects.
(p) None of the Company, the Subsidiaries or any agent acting on
their behalf has taken or will take any action that might cause this Agreement
or the sale of the Notes to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or as the
same may hereafter be in effect, on the Closing Date.
(q) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as
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being leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Final Memorandum or to the extent the
failure to have such title or the existence of such liens, charges, encumbrances
or restrictions would not have, individually or in the aggregate, a Material
Adverse Effect. The Company and the Subsidiaries own or possess adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by them as described in the Final Memorandum, and none
of the Company or the Subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how which would reasonably be expected to have, if
such assertion of infringement or conflict were sustained, a Material Adverse
Effect.
(r) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective properties or
assets which would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum or which seek to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance or sale
of the Notes to be sold hereunder or the consummation of the other transactions
described in the Final Memorandum; there are no material contracts or other
documents which would be required to be described in a prospectus pursuant to
the Act that are not described in the Final Memorandum.
(s) Except as disclosed in the Final Memorandum, to the best
knowledge of the Company, there has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or caused by
the Company (or, to the best of the Company's knowledge, any other entity for
whose acts or omissions the Company is or may reasonably be expected to be
liable) upon any of the property now or, to the actual knowledge of the current
chief executive officer, chief financial officer, treasurer or secretary of the
Company, previously owned or leased by the Company (i) in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or permit or
(ii) which would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to any
liability, except in the case of both clauses (i) and (ii) for any violation or
liability which would not have, individually or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal, discharge, emission or other release of any kind
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onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company has knowledge, except for any such disposal, discharge, emission, or
other release of any kind which would not have, individually or in the aggregate
with all such discharges and other releases, a Material Adverse Effect.
(t) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending or, to
the knowledge of the Company or any of the Subsidiaries, threatened.
(u) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks in each case as is in accordance with
industry practice to protect its business and the value of its properties.
(v) None of the Company or the Subsidiaries has any material
liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
makes or ever has made a contribution and in which any employee of the Company
or of any Subsidiary is or has ever been a participant. With respect to such
plans, the Company and each Subsidiary is in compliance in all material respects
with all applicable provisions of ERISA.
(w) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(x) None of the Company or the Subsidiaries immediately after the
sale of the Notes to be sold hereunder and the application of the proceeds from
such sale (as described in the Final Memorandum under the heading "Use of
Proceeds") will be required to register as an "investment company" or "promoter"
or "principal underwriter" for an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
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(y) To the extent that the Final Memorandum contains descriptions of
certain provisions of the Notes, the Indenture and the Registration Rights
Agreement, such descriptions are accurate in all material respects.
(z) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration statements
required to be filed by the Company pursuant to the Registration Rights
Agreement other than as expressly permitted thereby.
(aa) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value
of the assets of each of the Company and the Subsidiaries (each on a
consolidated basis) will exceed the sum of its stated liabilities and identified
contingent liabilities; none of the Company or the Subsidiaries (each on a
consolidated basis) is, nor will any of the Company or the Subsidiaries (each on
a consolidated basis) be, after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, (a) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise insolvent.
(bb) None of the Company, the Subsidiaries or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any "security" (as defined in the
Act) which is or could be integrated with the sale of the Notes in a manner that
would require the registration under the Act of the Notes or (ii) engaged in any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Notes or in
any manner involving a public offering within the meaning of Section 4(2) of the
Act. Assuming the accuracy of the representations and warranties of the Initial
Purchasers in Section 8 hereof, it is not necessary in connection with the
offer, sale and delivery of the Notes to the Initial Purchasers in the manner
contemplated by this Agreement to register any of the Notes under the Act or to
qualify the Indenture under the TIA.
(cc) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as the Notes and listed on
a national securities exchange
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registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
(dd) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of the
price of the Notes.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers,
acting severally and not jointly, agrees to purchase the Notes in the respective
amounts set forth on SCHEDULE 1 hereto from the Company at 97.0% of their
principal amount. One or more certificates in definitive form for the Notes
that the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Company to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer (same day funds), net of the
overnight cost of such funds, to such account or accounts as the Company shall
specify prior to the Closing Date, or by such means as the parties hereto shall
agree prior to the Closing Date. Such delivery of and payment for the Notes
shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx at 10:00 A.M., New York time, on November 25, 1996, or at such
other place, time or date as the Initial Purchasers, on the one hand, and the
Company, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as the "CLOSING DATE." The Company
will make such certificate or certificates for the Notes available for checking
and packaging by the Initial Purchasers at the offices of BT Securities
Corporation in New York, New York, or at such other place as BT Securities
Corporation may designate, at least 24 hours prior to the Closing Date.
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The Company shall not be obligated to deliver any of the Notes except
upon payment for all the Notes to be purchased as provided herein.
4. OFFERING BY THE INITIAL PURCHASERS. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent. The Company will promptly, upon
the reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Notes by the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the resale of the Notes; PROVIDED, HOWEVER, that in
connection therewith, the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Notes, any event occurs or information becomes
known as a result of which the Final Memorandum as then amended or supplemented
would include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Final Memorandum
to comply with applicable law, the Company will promptly notify the Initial
Purchasers thereof and will prepare, at the expense of the Company, an amendment
or supplement
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to the Final Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Notes remain outstanding, the Company
will furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities of the
Company may be listed.
(g) If such financial statements become available, prior to the
Closing Date, the Company will furnish to the Initial Purchasers, as soon as
they have been prepared, a copy of any unaudited interim financial statements of
the Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
(h) None of the Company or any of its Affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Notes in a manner which would require the registration under the Act of the
Notes.
(i) The Company will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Notes or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such Notes
and any prospective purchaser thereof the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
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(k) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the Private Offerings, Resales and
Trading through Automated Linkages market (the "PORTAL MARKET") and (ii) permit
the Notes to be eligible for clearance and settlement through The Depository
Trust Company.
(l) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Notes not made in accordance with the provisions of Regulation
S and will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
6. EXPENSES. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) preparation
(including printing), issuance and delivery to the Initial Purchasers of the
Notes, (v) the qualification of the Notes under state securities and "Blue Sky"
laws, including filing fees and reasonable fees and disbursements of counsel for
the Initial Purchasers relating thereto, (vi) expenses in connection with any
meetings with prospective investors in the Notes, (vii) fees and expenses of the
Trustee including fees and expenses of counsel, (viii) all expenses and listing
fees incurred in connection with the application for quotation of the Notes on
the PORTAL Market and (ix) any fees charged by investment rating agencies for
the rating of the Notes. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder (other
than solely by reason of a default by the Initial Purchasers of their
obligations hereunder after all conditions hereunder have been satisfied in
accordance herewith), the Company agrees to promptly reimburse the Initial
Purchasers upon demand for all out-of-pocket
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expenses (including reasonable fees, disbursements and charges of Xxxxxx Xxxxxx
& Xxxxxxx, counsel for the Initial Purchasers) that shall have been incurred by
the Initial Purchasers in connection with the proposed purchase and sale of the
Notes.
7. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The
obligation of the Initial Purchasers to purchase and pay for the Notes shall, in
their sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, special Massachusetts counsel for
the Company, in form and substance satisfactory to counsel for the Initial
Purchasers, to the effect that:
(i) The Company is duly incorporated and is validly existing under
the laws of Massachusetts and has all requisite corporate power and
authority to own or lease its properties and to conduct its business in the
manner in which it presently is conducted. The Company is duly qualified
to do business as a foreign corporation in good standing in the
jurisdictions set forth on an annex to such opinion.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued, and are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights; the Company's authorized
capital stock conforms to the description thereof contained in the Final
Memorandum.
(iii) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Indenture,
the Notes, the Exchange Notes and the Registration Rights Agreement; each
of the Indenture, the Notes, the Exchange Notes and the Registration Rights
Agreement has been duly and validly authorized by the Company; the
Indenture, the Notes and the Registration Rights Agreement have been duly
executed and delivered by the Company.
(iv) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby; this Agreement and the
consummation by
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the Company of the transactions contemplated hereby have been duly and
validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(v) The execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Notes to the Initial Purchasers)
will not contravene or constitute or result in a breach or a default under
or violation of any of (i) the articles of organization or bylaws of the
Company, or (ii) (assuming compliance with all applicable state securities
or "Blue Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof and assuming
compliance with the Act with respect to the exchange of the Notes for the
Exchange Notes and the obligations of the Company under the Registration
Rights Agreement) any Massachusetts statute, judgment, decree, order, rule
or regulation known to such counsel to be applicable to the Company or any
of its properties or assets, except for any such conflict, breach or
violation which would not, individually or in the aggregate, have a
Material Adverse Effect.
(vi) No consent, approval, authorization or order of any Massachusetts
governmental authority is required for the issuance and sale by the Company
of the Notes to the Initial Purchasers or the consummation by the Company
of the other transactions contemplated hereby, except such as may be
required under Blue Sky laws, as to which such counsel need express no
opinion, and those which have previously been obtained.
The opinion of Xxxxx Xxxxxxx & Xxxxxxxxx, LLP described in this
Section may be limited to matters of Massachusetts law and shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchasers, to the effect
that:
(i) The Indenture conforms to the requirements for qualification
under the TIA (assuming due execution and delivery thereof by the Company
and the Trustee and provided
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that such counsel need express no opinion with respect to the
Statement of Eligibility of the Trustee on Form T-1); the Indenture,
when duly executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Trustee), will
constitute the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws now or hereafter in effect
relating to or affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
(ii) The Notes are substantially in the form of Exhibit A to the
Indenture. The Notes, when duly executed and delivered by the Company and
paid for by the Initial Purchasers in accordance with the terms of this
Agreement (assuming the due authorization, execution and delivery of the
Indenture by the Company and the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance with the Indenture),
will constitute the valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(iii) The Exchange Notes, when duly executed and delivered by the
Company in accordance with the terms of the Registration Rights Agreement
and the Indenture (assuming the due authorization, execution and delivery
of the Indenture by the Company and the Trustee and due authentication and
delivery of the Exchange Notes by the Trustee in accordance with the
Indenture), and when duly and validly exchanged for the Notes, and assuming
compliance with federal or state securities laws, will constitute the valid
and legally binding obligations of the Company, entitled to the benefits of
the Indenture, and enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies generally
and to
-18-
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
(iv) The Registration Rights Agreement, when duly executed and
delivered by the Company (assuming due authorization, execution and
delivery thereof by the Initial Purchasers), will constitute the valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws now
or hereafter in effect relating to or affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
except to the extent that indemnification or contribution provisions may be
unenforceable.
(v) Except as set forth in the Final Memorandum, no holder of
securities of the Company or any Subsidiary is entitled pursuant to any
Contract identified to such counsel in a certificate of the Company as
being a material instrument to have such securities registered under a
registration statement filed by the Company pursuant to the Registration
Rights Agreement.
(vi) The Company is not in breach or default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
Contract identified to such counsel in a certificate of the Company as
being a material instrument, except for any such breach, default, violation
or event which would not, individually or in the aggregate, have a
Material Adverse Effect.
(vii) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Registration Rights Agreement (including,
without limitation, the issuance and sale of the Notes to the Initial
Purchasers) will not conflict with or constitute or result in a breach or a
default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of the terms or
provisions as they exist on the Closing Date of any Contract identified to
such counsel in a certificate of the Company as being a material
instrument, except for any such conflict, breach, violation, default or
event which would not, individually or in the aggregate, have a Material
Adverse Effect, or (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
-19-
representations and warranties of the Initial Purchasers in Section 8
hereof and assuming compliance with the Act with respect to the
exchange of the Notes for the Exchange Notes and the obligations of
the Company under the Registration Rights Agreement and excluding
federal and state securities laws and regulations as to which such
counsel shall not express an opinion pursuant to this paragraph (vii))
any statute, judgment, decree, order, rule or regulation known to such
counsel to be applicable to the Company, except for any such conflict,
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect.
(viii) No consent, approval, authorization or order of any governmental
authority is required for the issuance and sale by the Company of the Notes
to the Initial Purchasers or the consummation by the Company of the other
transactions contemplated hereby (assuming compliance with federal and
state securities laws in connection with or pursuant to the Registration
Rights Agreement and provided that such counsel need express no opinion in
this paragraph (viii) regarding indemnification provisions), except such as
may be required under Blue Sky laws, as to which such counsel need express
no opinion, and those which have previously been obtained.
(ix) None of the Company or the Subsidiaries is, or immediately after
the sale of the Notes to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum under the
caption "Use of Proceeds") will be, required to be registered as an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
(x) No registration under the Act of the Notes is required in
connection with the sale of the Notes to the Initial Purchasers as
contemplated by this Agreement, the Indenture and the Final Memorandum or
in connection with the initial resale of the Notes by the Initial
Purchasers in accordance with Section 8 of this Agreement, and prior to the
commencement of the Registered Exchange Offer (as defined in the
Registration Rights Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights Agreement),
the Indenture is exempt from the qualification requirements of the TIA, in
each case assuming (i) (A) that the purchasers who buy such Notes in the
initial resale thereof are qualified institutional buyers as defined in
Rule 144A promulgated under the Act ("QIBs") or accredited investors as
defined in Rule 501(a)(1), (2), (3) or (7)
-20-
promulgated under the Act ("Accredited Investors") or (B) that the
offer or sale of the Notes is made in an offshore transaction as
defined in Regulation S, (ii) the accuracy of the Initial Purchasers'
representations in Section 8 and those of the Company contained in
this Agreement and compliance with their respective agreements as set
forth in this Agreement and (iii) that the offering of the Notes will
be conducted solely in the manner contemplated by this Agreement, the
Indenture and the Final Memorandum.
(xi) Neither the consummation by the Company of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Notes by the Company will result in a violation by the
Company of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
At the time the foregoing opinion is delivered, Xxxxxx Xxxx & Xxxxxxxx
LLP shall additionally state that it has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchasers and counsel for the Initial Purchasers, at which conferences the
contents of the Final Memorandum and related matters were discussed, because the
purpose of its professional engagement was not to establish or confirm factual
matters and because the scope of its examination of the affairs of the Company
did not permit it to verify the accuracy, completeness or fairness of the
statements set forth in the Final Memorandum, it is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except to the extent set forth
below in clause (ii) of the following sentence), and on the basis of the
foregoing, no facts have come to its attention which lead it to believe that the
Final Memorandum, on the date thereof or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such firm need express no opinion with respect to the financial statements
and related schedules and notes thereto and the other financial, statistical and
accounting data included in the Final Memorandum). The opinion of Xxxxxx, Xxxx
& Xxxxxxxx LLP shall also state that (i) to its knowledge, there are no legal or
governmental proceedings involving or affecting the Company or any of its
properties or assets which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum or which seek
to restrain, enjoin, prevent the
-21-
consummation of or otherwise challenge the issuance or sale of the Notes to be
sold hereunder or the consummation of the other transactions described in the
Final Memorandum under the caption "Use of Proceeds" and (ii) to the extent that
the Final Memorandum contains descriptions of certain provisions of the
Indenture, the Notes and the Registration Rights Agreement, such descriptions
have been reviewed by it and are correct in all material respects. The opinion
of Xxxxxx Xxxx & Xxxxxxxx LLP described in this Section may be limited to
matters of New York, Federal and Delaware corporate law and shall be rendered to
the Initial Purchasers at the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date. In rendering such opinion,
Xxxxxx, Xxxx & Xxxxxxxx LLP may rely as to matters of fact to the extent such
counsel deems proper, on certificates of responsible officers of the Company and
public officials which are furnished to the Initial Purchasers.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers, dated
as of the Closing Date and addressed to the Initial Purchasers, of Xxxxxx Xxxxxx
& Xxxxxxx, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Xxxxxx Xxxxxx &
Xxxxxxx shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(d) The Initial Purchasers shall have received from Price Waterhouse
LLP and Coopers & Xxxxxxx LLP a comfort letter or letters dated the date hereof
and the Closing Date, in form and substance satisfactory to counsel for the
Initial Purchasers.
(e) The representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date; the statements
of the Company's officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct on and as of the
date made and on and as of the Closing Date; the Company shall have performed
all covenants and agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial
-22-
statements in such Final Memorandum, there shall have been no event or
development, and no information shall have become known, that, individually or
in the aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(f) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage or
from any legal or governmental proceeding, order or decree, which loss or
interference, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect.
(h) The Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its Chairman
of the Board, President or any Senior Vice President and the Chief Financial
Officer, to the effect that:
(i) The representations and warranties of the Company contained in
this Agreement are true and correct on and as of the date hereof and on and
as of the Closing Date, and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(i) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and such agreement
shall be in full force and effect at all times from and after the Closing Date.
-23-
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. (a) Each of the
Initial Purchasers represents and warrants (as to itself only) that it is either
a QIB or an Institutional Accredited Investor. Each of the Initial Purchasers
agrees with the Company (as to itself only) that (i) it has not and will not
solicit offers for, or offer or sell, the Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act; and (ii) it has and will solicit offers for the
Notes only from, and will offer the Notes only to, (A) in the case of offers
inside the United States, (x) persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when the Initial Purchasers reasonably believe that each such account is a
QIB, to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A or
(y) a limited number of other institutional investors reasonably believed by the
Initial Purchasers to be Accredited Investors that, prior to their purchase of
the Notes, deliver to the Initial Purchasers a letter containing the
representations and agreements set forth in Annex A to the Final Memorandum and
(B) in the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); PROVIDED,
HOWEVER, that, in the case of clause (y), in purchasing such Notes such persons
are deemed to have represented and agreed as provided under the caption
"Transfer Restrictions" contained in the Final Memorandum (or, if the Final
Memorandum is not in existence, in the most recent Memorandum).
-24-
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Notes or has in its
possession or distributes any Memorandum or any such other material, in all
cases at its own expense; (ii) the Notes have not been and will not be offered
or sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Act or pursuant to an
exemption from the registration requirements of the Act; (iii) it has offered
the Notes and will offer and sell the Notes (A) as part of its distribution at
any time and (B) otherwise until 40 days after the later of the commencement of
the offering and the Closing Date, only in accordance with Rule 903 of
Regulation S and, accordingly, neither it nor any persons acting on its behalf
have engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the Notes, and any such persons have complied
and will comply with the offering restrictions requirement of Regulation S; and
(iv) it agrees that, at or prior to confirmation of sales of the Notes, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may
not be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of the distribution of
the Securities at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above
have the meaning given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement have the meanings
given to them in Regulation S.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless the Initial Purchasers, and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which any Initial Purchaser or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
-25-
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Notes under the securities or "Blue Sky" laws thereof or filed with any
securities association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements therein
not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses reasonably incurred by the
Initial Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any Memorandum
or any amendment or supplement thereto or any Application in reliance upon and
in conformity with written information concerning the Initial Purchasers
furnished to the Company by any of the Initial Purchasers specifically for use
therein. This indemnity agreement will be in addition to any liability that the
Company may otherwise have to the indemnified parties. The Company shall not be
liable under this Section 9 for any settlement of any claim or action effected
without its prior written consent, which shall not be unreasonably withheld; and
PROVIDED FURTHER, that with respect to any such untrue statement or omission
made in the Preliminary Memorandum, the indemnity contained in this Section 9(a)
(to the extent and only to the extent that such losses, claims, damages or
liabilities resulted from the untrue statement or omission described in (B)
below) shall not inure to the benefit of the Initial Purchaser from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Securities concerned if it shall be established that both (A) a copy of the
amended or supplemented Memorandum was not sent or given to such person at or
prior to the delivery of the Notes to such person, and (B) the untrue statement
or omission in the Preliminary Memorandum was corrected in the amended or
-26-
supplemented Memorandum unless, in either case, such failure to deliver the
amended or supplemented Memorandum was a result of noncompliance by the Company
with Section 5(a).
(b) The Initial Purchasers agree to indemnify and hold harmless the
Company, its directors, its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto or any
Application, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser, furnished to the Company by the Initial
Purchasers specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will
be in addition to any liability that the Initial Purchasers may otherwise have
to the indemnified parties. The Initial Purchasers shall not be liable under
this Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld. The Company shall not,
without the prior written consent of the Initial Purchasers, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which any Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by any Initial Purchaser, unless such settlement
(A) includes an unconditional written release of the Initial Purchasers, in form
and substance reasonably satisfactory to the Initial Purchasers, from all
liability on claims that are the subject matter of such proceeding and (B) does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of any Initial Purchaser.
-27-
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party
(i) will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraphs (a) and
(b) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one
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action or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances, designated by the
Initial Purchasers in the case of paragraph (a) of this Section 9 or the Company
in the case of paragraph (b) of this Section 9, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may be, who are
parties to such action or actions) or (ii) the indemnifying party has authorized
in writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but
also the relative fault of the indemnifying party or parties on the one hand and
the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
benefits received by the Company on the one hand and any Initial Purchaser on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering of the Notes (before deducting expenses) received by the
Company bear to the total discounts and commissions received by such Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand, or such Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
-29-
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Initial Purchasers agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, and each director of
the Company, each officer of the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
10. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchasers set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Initial Purchasers or any controlling person
referred to in Section 9 hereof and (ii) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
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(i) any of the Company or the Subsidiaries shall have sustained
any loss or interference with respect to its businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any strike, labor dispute, slow down
or work stoppage or any legal or governmental proceeding, which loss
or interference, in the sole judgment of the Initial Purchasers, has
had or has a Material Adverse Effect, or there shall have been, in the
sole judgment of the Initial Purchasers, any event or development
that, individually or in the aggregate, has or could be reasonably
likely to have a Material Adverse Effect (including without limitation
a change in control of the Company), except in each case as described
in the Final Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the NASDAQ National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The statements
set forth in the last paragraph on each of the front cover page and the inside
front cover page and in the second and
-31-
third sentences of the third paragraph under the heading "Private Placement" in
the Final Memorandum constitute the only information furnished by any of the
Initial Purchasers to the Company for the purposes of Sections 2(a) and 9
hereof.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to BT Securities
Corporation, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department; if sent to the Company, shall be mailed or delivered to the
Company at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx, Attention: Chief
Financial Officer; with a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Company, its officers and
any person or persons who control the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the
Initial Purchasers will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
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16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company and
the Initial Purchasers.
Very truly yours,
THE XXXXXXX XXXXXX COMPANY
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BT SECURITIES CORPORAITON
By: /s/ Xxxxxxxxx Xxxxxxxx Foggia
------------------------------
Name:
Title:
CHASE SECURITIES INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name:
Title:
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxxx Xxxxx & Co.
------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
BANKERS TRUST INTERNATIONAL PLC
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Name:
Title:
SCHEDULE 1
PRINCIPAL
AMOUNT OF
INITIAL PURCHASER NOTES
----------------- ---------
BT Securities Corporation. . . . . . . . . . . . . . . . . $ 39,000,000
Bankers Trust International plc. . . . . . . . . . . . . . 1,000,000
Chase Securities Inc.. . . . . . . . . . . . . . . . . . . 30,000,000
Xxxxxxx, Xxxxx & Co. . . . . . . . . . . . . . . . . . . . 30,000,000
------------
Total . . . . . . . . . . . . . . . . . . . . . . $100,000,000
SCHEDULE 2
SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
NAME INCORPORATION
Carter's de San Xxxxx, Inc. Delaware
Carterco, X.X. Xxxxx Rica
Carter's xx Xxxxxxxx, X.X. Xxxxx Rica
