EXHIBIT 10.1
$100,000,000
COINMACH CORPORATION
11 3/4% SERIES C SENIOR NOTES DUE 2005
PURCHASE AGREEMENT
Dated as of October 1, 1997
XXXXXXXXX & COMPANY, INC.
LAZARD FRERES & CO. LLC
BT ALEX. XXXXX INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
c/x Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
Coinmach Corporation, a Delaware corporation (the "Company"), proposes,
upon the terms and conditions set forth herein, to issue and sell to the
purchasers named in Schedule I hereto (the "Initial Purchasers"), $100,000,000
aggregate principal amount of its 11 3/4% Series C Senior Notes due 2005 (the
"Securities"). The Securities will be issued pursuant to the provisions of an
Indenture, to be dated as of October 8, 1997 (the "Indenture"), between the
Company and State Street Bank and Trust Company, as Trustee (the "Trustee").
The Company wishes to confirm as follows its agreement with the Initial
Purchasers in connection with the purchase and resale of the Securities.
1. Offering Memorandum. The Securities will be offered and sold to the
Initial Purchasers without registration under the Securities Act of 1933 (the
"Act"), in reliance on an exemption pursuant to Section 4(2) under the Act. The
Company has prepared an offering memorandum, dated October 1, 1997 (the
"Offering Memorandum"), setting forth information regarding the Company and the
Securities. Any references herein to the Offering Memorandum shall be deemed to
include all amendments and supplements thereto and all documents incorporated by
reference therein. The Company hereby confirms that it has authorized the use
of the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make offers
and sales (the "Exempt Resales") of the Securities purchased by the Initial
Purchasers hereunder only on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, (i) to persons
whom the Initial Purchasers reasonably believe to be qualified institutional
buyers ("Qualified
Page 98 of 163
Institutional Buyers") as defined in Rule 144A under the Act, as such rule may
be amended from time to time ("Rule 144A"), in transactions under Rule 144A and
(ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Act)
("Accredited Investors") in private sales exempt from registration under the Act
(such persons specified in clauses (i) and (ii) being referred to herein as the
"Eligible Purchasers").
It is understood and acknowledged that upon original issuance thereof, and
until such time as the same is no longer required under the applicable
requirements of the Act, each of the Securities (and each security issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE " SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT,
WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY
OR THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF THE
ISSUER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR ANY OTHER
AVAILABLE EXEMPTION UNDER THE ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF ANY
CERTIFICATED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS SECURITY OR THE LAST DATE ON
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WHICH SUCH CERTIFICATED SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH CERTIFICATED SECURITY
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH CERTIFICATED
SECURITY TO THE TRUSTEE. IF ANY PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION, "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
It is also understood and acknowledged that holders (including subsequent
transferees) of the Securities will have the registration rights set forth in
the registration rights agreement (the "Registration Rights Agreement")
substantially in the form attached hereto as Exhibit A, to be dated as of
October 8, 1997 by and between the Company and the Initial Purchasers. Pursuant
to the Registration Rights Agreement, the Company will agree, among other
things, to file a registration statement under the Act relating to the Company's
debt securities (the "Exchange Notes") to be issued under the Indenture and
offered in exchange for the Securities (such offer to exchange being referred to
as the "Exchange Offer").
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture.
2. Agreements to Sell, Purchase and Resell. Upon the basis of the
representations, warranties and agreements of the Company and the Initial
Purchasers herein contained and subject to the terms and conditions set forth
herein, the Company hereby agrees to issue and sell to the Initial Purchasers,
and the Initial Purchasers agree to purchase from the Company, at a purchase
price of 108.375% of the principal amount thereof, $100,000,000 principal amount
of Securities.
(b) The Initial Purchasers have advised the Company that they propose
to offer the Securities for sale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum. Each Initial Purchaser hereby
represents and warrants to the Company that it is a Qualified Institutional
Buyer and an Accredited Investor, and agrees that it will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of 502(c) under the Act,
or in any manner involving a public distribution or offering of the Securities
within the meaning of the Act, and will solicit offers for the Securities
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only from, and will offer, sell or deliver the Securities as part of their
initial offering, only to persons whom it reasonably believes to be Qualified
Institutional Buyers or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a Qualified Institutional Buyer, 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 in reliance upon Rule 144A and to a limited number of other
institutional investors who prior to their purchase of the Securities represent
to the Company that they are Accredited Investors, pursuant to a letter
substantially in the form of Annex A to the Offering Memorandum. Each Initial
Purchaser agrees to use its best efforts to deliver a definitive copy of the
Offering Memorandum to each person to whom the Securities are resold by such
Initial Purchaser substantially contemporaneously with the Closing Date. The
Initial Purchasers have advised the Company that they will offer the Securities
at a price initially equal to 109.875% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance of the Securities. Such
price may be changed by the Initial Purchasers at any time thereafter without
notice.
3. Delivery of the Securities and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Securities shall be made at the office
of Xxxxxxxx, Kill & Olick, P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, at 10:00 a.m., New York City time, on October 8, 1997 (the "Closing
Date"). The place of closing for the Securities and the Closing Date may be
varied by agreement between the Initial Purchasers and the Company.
The Securities will be delivered to the Initial Purchasers against payment
of the purchase price therefor by means of a wire transfer of same day funds in
accordance with written instructions from the Company. The Securities will be
evidenced by a single global security in definitive form (the "Global Security")
and/or by additional certificated securities, and will be registered, in the
case of a Global Security, in the name of Cede & Co. as nominee of The
Depository Trust Company ("DTC"), and in the other cases, in such names and in
such denominations as the Initial Purchasers shall request prior to 9:30 a.m.,
New York City time, on the business day preceding the Closing Date. The
Securities to be delivered to the Initial Purchasers shall be made available to
the Initial Purchasers in New York City for inspection and packaging not later
than 9:30 a.m., New York City time, on the business day next preceding the
Closing Date.
4. Agreements of the Company. The Company agrees with the Initial
Purchasers as follows:
(a) Until the completion of the distribution of the Securities by the
Initial Purchasers to Eligible Purchasers, the Company will advise the Initial
Purchasers promptly and, if requested by the Initial Purchasers, will confirm
such advice in writing, within the period of time referred to in paragraph (e)
below, of any change in the condition (financial or other), business, properties
or results of operations of the Company and the Subsidiaries (as defined
herein), taken as a whole, or of the happening of any event or the existence of
any condition known to the Company which requires any amendment or supplement to
the Offering Memorandum so that the Offering Memorandum (x) will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
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of the circumstances under which they were made, not misleading or (y) will
comply with applicable law.
(b) The Company will furnish to the Initial Purchasers, without
charge, as of the date of the Offering Memorandum, such number of copies of the
Offering Memorandum, as may then be amended or supplemented, as the Initial
Purchasers may reasonably request.
(c) The Company will not make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which they shall reasonably object after being so advised.
(d) The Company consents to the use of the Offering Memorandum in
accordance with the securities or Blue Sky laws of the jurisdictions in which
the Securities are offered by the Initial Purchasers and by all dealers to whom
Securities may be sold, in connection with the offering and sale of the
Securities; provided, however, that in no event shall the Company be required to
qualify as a foreign corporation or as a broker-dealer in any jurisdiction where
it is not now so qualified or to take any action which would subject it to
service of process in suits or to taxation in any jurisdiction where it is not
now so qualified or subject.
(e) If at any time prior to completion of the distribution of the
Securities by the Initial Purchasers to the Eligible Purchasers any event shall
occur or otherwise exist that in the judgment of the Company or in the
reasonable opinion of the Initial Purchasers should be set forth in the Offering
Memorandum so that the Offering Memorandum will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or will comply with
applicable law, the Company will forthwith prepare an appropriate supplement or
amendment thereto, and will promptly furnish to the Initial Purchasers that
number of copies thereof as it shall reasonably request.
(f) The Company will cooperate with the Initial Purchasers and with
their counsel in connection with the qualification of the Securities for
offering and sale by the Initial Purchasers and by dealers under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided that in no event
shall the Company be obligated to qualify as a foreign corporation or as a
broker-dealer in any jurisdiction where it is not now so qualified or to take
any action which would subject it to service of process in suits or to taxation
in any jurisdiction where it is not now so qualified or subject.
(g) So long as any of the Securities are outstanding, the Company will
furnish to the Initial Purchasers as promptly as practicable after available, a
copy of each report of the Company mailed to stockholders or filed with the
Securities and Exchange Commission (the "Commission") and from time to time
such other information concerning the Company as the Initial Purchasers may
reasonably request.
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(h) The Company will apply the net proceeds from the sale of the
Securities substantially in accordance with the description set forth under "Use
of Proceeds" in the Offering Memorandum.
(i) Without the prior consent of the Initial Purchasers, prior to the
expiration of 180 days after the date of the Offering Memorandum, the Company
will not offer, sell, contract to sell or otherwise dispose of any debt
securities registered under the Act or privately sold pursuant to Rule 144A
under the Act, other than as contemplated by the Registration Rights Agreement.
(j) Except as stated in this Agreement and in the Offering Memorandum,
the Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Securities to facilitate the
sale or resale of the Securities. Except as permitted by the Act, the Company
will not distribute any offering material in connection with the Exempt Resales.
The Company will not solicit any offers to buy and will not offer to sell the
Securities by means of any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act).
(k) The Company will use its reasonable best efforts to cause the
Securities to be eligible for trading on the Private Offerings, Resale and
Trading through Automated Linkages ("PORTAL") Market.
(l) From and after the Closing Date, so long as any of the Securities
are outstanding and are "restricted securities" within the meaning of the Rule
144(a)(3) under the Act or, if earlier, until two years after the Closing Date
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Company will furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in connection
with resales of the Securities.
(m) The Company agrees not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the sale by the Company to the Initial
Purchasers or by the Initial Purchasers to the Eligible Purchasers of the
Securities.
(n) The Company agrees to comply with all agreements set forth in the
representation letter of the Company to DTC relating to the approval of the
Securities by DTC for "book entry" transfer.
5. Representations and Warranties of the Company. The Company represents
and warrants to the Initial Purchasers that:
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(a) The Offering Memorandum with respect to the Securities has been
prepared by the Company for use by the Initial Purchasers in connection with the
Exempt Resales. No order or decree preventing the use of the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act, has been
issued and no proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company, is contemplated.
(b) The Offering Memorandum as of its date and as of the Closing Date,
did not or will not at any time on or before the Closing Date contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein.
(c) The Indenture has been duly and validly authorized by the Company
and, upon its execution, delivery and performance by the Company and assuming
due authorization, execution, delivery and performance by the Trustee, will be a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law); the Indenture conforms in all material respects to the description
thereof in the Offering Memorandum; no qualification of the Indenture under the
1939 Act is required in connection with the offer and sale of the Securities
contemplated hereby or in connection with the Exempt Resales.
(d) The Securities have been duly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with the
Indenture and delivered to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to the enforcement of creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law); and the Securities conform in all material respects to the
description thereof in the Offering Memorandum. The Exchange Notes have been
duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the Exchange Offer and the
Indenture, will have been validly issued and delivered, and will constitute
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy,
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insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or thereafter in effect relating to the enforcement of creditors'
rights generally and subject to the applicability of general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(e) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as presently conducted, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties (owned or leased) or the
conduct of its business requires such registration or qualification, except
where the failure to so register or qualify does not have a material adverse
effect on the condition (financial or other), business, properties or results of
operations of the Company or any Subsidiary (as hereinafter defined) that is or
would be, singly or in the aggregate, material to the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(f) Each corporation in which the Company owns fifty percent (50%) or
more of any class of securities (collectively, the "Subsidiaries") and each
partnership of which the Company or any Subsidiary is a general partner or owns
fifty percent (50%) or more of the partnership interests is listed on Schedule A
hereto. Each Subsidiary is a corporation duly organized and validly existing,
and in good standing in the jurisdiction of its incorporation with all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as presently conducted. Each Subsidiary is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does not have
a Material Adverse Effect.
(g) Except as disclosed in the Offering Memorandum, each of the
Company and the Subsidiaries have all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all regulatory
or governmental officials, bodies and tribunals ("Permits"), to own or lease its
respective properties and to conduct its respective businesses as presently
conducted or where failure to have obtained the same will not have a Material
Adverse Effect, and neither the Company, nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
Permits, if the failure to be so licensed or approved or if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect;
each of the Company and the Subsidiaries have fulfilled and performed all its
current material obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time, or both, would allow,
revocation or termination thereof or result in any other material impairment of
the rights of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Offering Memorandum, except where the
failure to do so will not have a Material Adverse Effect; and, except as
described in the Offering Memorandum and as is customary in the areas where the
properties of the Company or any Subsidiary are located, such Permits contain no
restrictions that are materially burdensome to the Company or the Subsidiaries
taken as a whole; and each of the Company and the Subsidiaries are in compliance
with all applicable laws, rules,
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regulations, orders and consents, the violation of which would have a Material
Adverse Effect. The property and business of the Company and the Subsidiaries
conform in all material respects to the descriptions thereof contained in the
Offering Memorandum.
(h) All of the Company's issued and outstanding capital stock has been
duly authorized, validly issued and is fully paid and non-assessable as of the
date hereof and the capitalization of the Company conforms in all material
respects to the descriptions thereof in the Offering Memorandum.
(i) All the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and non-
assessable, and all outstanding shares of capital stock of each Subsidiary are
owned by the Company, either directly or through wholly-owned Subsidiaries, free
and clear of any security interests, claims, liens or encumbrances, except that
the capital stock of certain of the Subsidiaries has been pledged in favor of
the lenders pursuant to the Credit Facility (as defined in the Offering
Memorandum).
(j) Each of the Company and the Subsidiaries have generally
satisfactory title to all properties and assets owned by them, free of all
liens, charges, encumbrances or restrictions, except such as are described in
the Offering Memorandum, permitted by the Indenture or such as are not
burdensome and do not interfere with the use of the property or the conduct of
the business of the Company and the Subsidiaries in a manner that is or would be
material to the business of the Company and the Subsidiaries taken as a whole.
The Company and each Subsidiary have valid and subsisting leases for the
properties leased by them, with such exceptions as in the aggregate are not
materially burdensome and do not interfere with the conduct of the business of
the Company and the Subsidiaries in a manner that is or would be material to the
business of the Company and the Subsidiaries taken as a whole.
(k) The Company and the Subsidiaries own, or possess adequate rights
to use, all trademarks, service marks and other rights necessary for the conduct
of their businesses, and neither the Company nor any Subsidiary has received any
written notice of conflict with the asserted rights of others in any such
respect that would materially adversely affect the business of the Company, and
its Subsidiaries as a whole. No claims have been asserted and the Company has
not received any notice of conflict with (or knows of any such conflict with)
asserted rights of others with respect to the use, validity or the effectiveness
of any trademarks, service marks, trade names or know-how which, if such claim
or assertion of conflict were the subject of any unfavorable decision, ruling or
finding would individually or in the aggregate have a Material Adverse Effect.
(l) The accountants, Ernst & Young, LLP, who have certified or shall
certify the financial statements included or incorporated by reference in the
Offering Memorandum, are independent accountants with respect to the Company and
the Subsidiaries as required by the Act.
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(m) The Company's Annual Report on Form 10-K for the Year Ended March
28, 1997 (the "Annual Report") and the Company's Quarterly Report on Form 10-Q
for the Three Months Ended June 27, 1997 (the "Quarterly Reports") at the time
they were filed with the Commission complied in all material respects with the
requirements of the Exchange Act. The Annual Report and the Quarterly Report
when they were filed contained no untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(n) Neither the Company nor any Subsidiary is in violation of (i) its
respective charter or by-laws or similar organizational documents, (ii) any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or any Subsidiary, or (iii) any franchise, license, permit, judgment or
any decree of any court or governmental agency or body having jurisdiction over
the Company or any Subsidiary, in each case the effect of which violation would
have a Material Adverse Effect, or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, bond, debenture, bank loan,
credit agreement or other agreement, instrument or evidence of indebtedness
(including, without limitation, the Credit Agreement) to which the Company or
any Subsidiary or Coinmach Laundry is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any
Subsidiary is subject, the effect of which default in performance or observance
would have a Material Adverse Effect.
(o) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any Subsidiary, or
to which any of their respective properties is subject, that are not disclosed
in the Offering Memorandum and that, if adversely decided, could reasonably be
expected to have a Material Adverse Effect or to materially adversely affect the
issuance of the Securities or the consummation of the transactions contemplated
by this Agreement. There are no agreements, contracts, indentures, leases or
other documents or instruments of the Company or any Subsidiary that are
material to the Company and the Subsidiaries, taken as a whole, that are
required to be disclosed in the Offering Memorandum and not disclosed therein.
(p) To the Company's knowledge, neither the Company nor any of the
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary, or has received or
retained any funds, in violation of any law or rule or regulation.
(q) Neither the Company nor any of the Subsidiaries is involved in any
labor dispute or, to the knowledge of the Company, is any such dispute
threatened, other than disputes that the Company reasonably anticipates will not
have a Material Adverse Effect.
(r) Each of the Company and the Subsidiaries have filed all federal,
state and local tax returns that are required to be filed (other than returns
with respect to which failure to so file would not have a Material Adverse
Effect) or have obtained extensions thereof and have paid all taxes shown on
such returns and all assessments received by it to the extent that the same have
become due, other than those being contested in good faith or those currently
payable without
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penalty or interest and except where the failure to so pay is not reasonably
likely to have, singly or in the aggregate, a Material Adverse Effect.
(s) Except for the shares of capital stock of each of the
Subsidiaries, neither the Company nor any of the Subsidiaries owns any share of
stock or any other securities of any corporation or has any equity interest in
any firm, partnership, association or other entity material in amount in
relation to the net assets of the Company and the Subsidiaries taken as a whole,
other than as reflected in the consolidated financial statements included in the
Offering Memorandum.
(t) Except for the consent required under the Credit Facility, which
the Company will obtain on or prior to the Closing Date, neither the issuance,
offer, sale or delivery of the Securities by the Company, the execution,
delivery or performance of this Agreement or the Indenture by the Company or the
consummation by the Company of the transactions contemplated hereby or thereby
(i) requires any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may have been
obtained or may be required in connection with the registration under the Act of
the Securities in accordance with the Registration Rights Agreement, the
qualification of the Indenture under the 1939 Act and except for compliance with
the securities or Blue Sky laws of various jurisdictions), or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the certificate or articles of incorporation or bylaws, or other organizational
documents, of the Company or any Subsidiary or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under, any
material agreement, indenture, lease or other instrument to which the Company or
any Subsidiary or Coinmach Laundry is a party or by which any of them or any of
their respective properties may be bound which conflict, breach or default would
have a Material Adverse Effect, or (iii) violates or will violate in any
material respect any statute, law, regulation or filing or judgment, injunction,
order or decree (assuming compliance with all applicable state securities or
"blue sky" laws and assuming the accuracies of the representations and
warranties of the Initial Purchasers in Section 2(b) hereof) applicable to the
Company or any Subsidiary or any of their respective properties, or (iv) will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to the terms of any
agreement or instrument to which either of them is a party or by which either of
them may be bound, the creation of which lien, charge or encumbrance would have
a Material Adverse Effect.
(u) The consolidated financial statements, together with related
schedules and notes included in, or incorporated by reference into the Offering
Memorandum, present fairly the consolidated financial position, results of
operations and changes in stockholders' equity and cash flows of the Company at
the respective dates or for the respective periods to which they apply and have
been prepared in accordance with generally accepted accounting principles
consistently applied, except as otherwise stated therein, throughout the periods
involved. The other financial and statistical information and data set forth
in, or incorporated by reference into, the Offering Memorandum is accurately
presented and, to the extent such information and data is derived from the
financial books and records of the Company, is prepared on a basis consistent
with such financial statements and the books and records of the Company.
-11-
(v) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Offering Memorandum
(i) have been prepared in accordance with applicable requirements of Regulation
S-X promulgated under 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
statements and other pro forma financial information included in the Offering
Memorandum are, in the opinion of the Company, reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(w) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement; the execution and delivery of this Agreement and
the Registration Rights Agreement by the Company, and the performance by the
Company of its obligations under this Agreement and the Registration Rights
Agreement, have been duly and validly authorized by the Company, and each of
this Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Company, and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement hereof and thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law, and except as rights to indemnity and contribution hereunder and
thereunder may be limited by federal or state securities laws or principles of
public policy.
(x) Except as disclosed in the Offering Memorandum, subsequent to the
date as of which such information is given in the Offering Memorandum to the
date hereof, neither the Company nor any Subsidiary has incurred any liability
or obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries, taken as a whole, and there has not been any material change in
the capital stock, or material increase in the short-term or long-term debt, of
the Company or any Subsidiary or, to the knowledge of the Company, any material
adverse change, or any development involving or which could reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and the Subsidiaries taken as a whole.
(y) Except as permitted by the Act, the Company has not distributed
and, prior to the later to occur of the Closing Date and completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the Offering
Memorandum.
-12-
(z) The Company is not and, upon sale of the Securities to be issued
and sold thereby in accordance herewith and the application of the net proceeds
to the Company of such sale as described in the Offering Memorandum under the
caption "Use of Proceeds," will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
(aa) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Act) as any security of the Company that is listed on
a national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated interdealer quotation system.
(bb) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Act) has directly, or through
any agent (provided that no representation is made as to the Initial Purchaser
or any person acting on its behalf), sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined in the
Act) which is or will be integrated with the offering and sale of the Securities
in a manner that would require the registration of the Securities under the Act
or engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) in connection with the offering of
the Securities.
(cc) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 2 hereof are true and correct in all material
respects, (ii) the Initial Purchasers complied with the covenants set forth in
Section 2 hereof, (iii) the Initial Purchasers complied with the offering and
transfer procedures and restrictions described in the Offering Memorandum, (iv)
the accuracy of the representations and warranties made in accordance with this
Agreement and the Offering Memorandum by Eligible Purchasers to whom the Initial
Purchasers initially resell Securities and (v) Eligible Purchasers to whom the
Initial Purchasers initially resell Securities receive a copy of the Offering
Memorandum prior to such sale, the purchase and sale of the Securities pursuant
hereto (including the Initial Purchasers' proposed offering of the Securities on
the terms and in the manner set forth in the Offering Memorandum and Section 2
hereof) do not require registration under the Act.
(dd) The Company and each Subsidiary is in compliance with, and not
subject to any liability under, the common law and all applicable federal,
state, local and foreign laws, regulations, rules, codes, ordinances,
directives, and orders relating to pollution or to protection of public or
employee health or safety or to the environment, including, without limitation,
those that relate to any Hazardous Material (as defined herein) ("Environmental
Laws"), except, in each case, where noncompliance or liability, individually or
in the aggregate, would not have a Material Adverse Effect. The term "Hazardous
Material" means any pollutant, contaminant, hazardous, dangerous, or toxic
chemical, material, waste, substance or constituent, each subject to regulation
under any Environmental Law.
-13-
Any certificate signed by any officer of the Company (each an "Authorized
Officer") and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Company to the Initial Purchasers as to the
matters covered thereby.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the
Initial Purchasers and their respective officers, shareholders, employees and
directors and any person who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability or claim (including the reasonable cost of
investigating such claim) which, jointly or severally, the Initial Purchasers or
any such officer, shareholder, employee, director or controlling person may
incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement of a material fact contained in the Offering
Memorandum, or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in the Offering Memorandum, or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, except insofar as any such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or omission or alleged untrue statement or omission which has been made therein
or omitted therefrom in reliance upon and in conformity with the information
provided in writing to the Company by or on behalf of the Initial Purchasers
expressly for use in the Offering Memorandum, and the Company agrees that the
only such information provided in writing by or on behalf of the Initial
Purchasers, expressly for use in the Offering Memorandum, is that information
contained in the section entitled "Plan of Distribution," the last paragraph on
the cover page, the "blue sky" legends on page iii, the section entitled "Risk
Factors-Absence of Public Markets" and the word "SUPERtack/TM/" wherever used.
The foregoing indemnity agreement shall be in addition to any liability which
the Company may otherwise have; provided, however, that the indemnity
obligations arising under this Section 6 with respect to the Offering
Memorandum, shall not inure to the benefit of the Initial Purchasers and their
controlling persons and the respective directors, officers and employees if the
person asserting any losses or other claims purchased the Securities from the
Initial Purchasers and if a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have timely furnished any amendments thereof
or supplements thereto), was not sent or given by the Initial Purchasers or on
their behalf to such persons at or prior to the written confirmation of the sale
of the Securities to such person, and if the Offering Memorandum (as then
amended or supplemented if the Company shall have timely furnished any
amendments thereof or supplements thereto) would have cured the defect giving
rise to such claims or losses.
If any action is brought against the Initial Purchasers or their officers,
shareholders, employees, directors or person who controls any of the Initial
Purchasers (as described above) in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, the Initial Purchasers
shall promptly notify the Company in writing of the institution of such action
(provided, that the failure to give such notice shall not relieve the Company of
any liability which it may have pursuant to this Agreement, unless such failure
has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the Company shall,
-14-
subject to the terms of this Agreement, assume the defense of such action,
including the employment of counsel and payment of reasonable expenses. The
Initial Purchasers or such officer, shareholder, employee, director or person
who controls any of the Initial Purchasers (as described above) shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Initial Purchasers or of
such persons unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have employed reasonably satisfactory counsel to take charge
of the defense of such action or such indemnified party or parties shall have
been advised by counsel that there may be defenses available to it or them that
are different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company; provided, that the Company shall
only be responsible for the fees and expenses of one counsel for the Initial
Purchasers hereunder. Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which consent shall not be
unreasonably withheld, and such settlement includes an unconditional release of
the Company from all liability on claims that are the subject matter of the
claim or action.
(b) The Initial Purchasers agree, severally and jointly, to indemnify,
defend and hold harmless the Company, each of its directors, officers and
employees and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur under the
Act, the Exchange Act or otherwise, as such expenses are incurred, insofar as
such loss, expense, liability or claim arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made in or omitted from the Offering Memorandum in reliance upon and in
conformity with the information relating to the Initial Purchasers furnished in
writing or failed to be furnished by or on behalf of the Initial Purchasers to
the Company. The Company agrees that the only information provided in writing
by or on behalf of the Initial Purchasers to the Company, expressly for use in
the Offering Memorandum, is that information contained in the section entitled
"Plan of Distribution," the last paragraph on the cover page, the "blue sky"
legends on page iii, the section entitled "Risk Factors-Absence of Public
Markets" and the word "SUPERtack/TM/" wherever used.
If any action is brought against the Company or any such person in respect
of which indemnity may be sought against the Initial Purchasers pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Initial Purchasers in writing of the institution of such action and the Initial
Purchasers shall assume the defense of such action, including the employment of
counsel and payment of reasonable expenses. The Company or such person shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or such
person unless the employment of such counsel shall have been authorized in
writing by the Initial Purchasers in connection with the defense of such action
or the Initial Purchasers shall not have employed reasonably satisfactory
counsel to take charge of the defense of such action or such indemnified party
or parties shall have been advised by counsel that there may be defenses
available to it or them that are different from or additional to
-15-
those available to the Initial Purchasers (in which case the Initial Purchasers
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Initial Purchasers and paid as incurred. Anything in this
paragraph to the contrary notwithstanding, the Initial Purchasers shall not be
liable for any settlement of any such claim or action effected without the
written consent of the Initial Purchasers, which consent shall not be
unreasonably withheld, and such settlement includes an unconditional release of
the Initial Purchasers from all liability on claims that are the subject matter
of the claim or action. Notwithstanding the provisions of this Section 6, each
Initial Purchaser's indemnification obligations shall be limited to the amount
of the commission received by such Initial Purchaser applicable to the
Securities purchased by such Initial Purchaser hereunder.
(c) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsection (a) or (b) of this Section
6 in respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses,
liabilities or claims in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other hand from the offering of the Securities or if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such losses, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Initial Purchasers. The relative fault of the
Company on the one hand and of the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, expenses, liabilities and claims referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
(d) The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 6(c) above.
Notwithstanding the provisions of this Section 6, (i) no Initial Purchaser shall
be required to contribute any amount in excess of the discounts, commission and
other compensation, if any, received by such Initial Purchaser applicable to the
Securities purchased by such Initial Purchaser hereunder by reason of such
untrue statement or alleged untrue statement or omission or alleged omission and
(ii) 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.
-16-
(e) The indemnity and contribution agreements contained in this
Section 6 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect irrespective
of any investigation made by or on behalf of the Initial Purchasers, or any of
their officers, employees, directors, shareholders or person who controls any of
the Initial Purchasers within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its respective
directors, officers, employees or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Securities. The Company and the Initial Purchasers agree promptly to notify the
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of its respective officers and directors in
connection with the issuance and sale of the Securities, or in connection with
the Offering Memorandum.
7. Conditions of the Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase the Securities on the Closing Date hereunder
is subject to the fulfillment, in the Initial Purchasers' sole discretion, of
the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, be
contemplated. No order suspending the sale of the Securities in any jurisdiction
designated by the Initial Purchasers shall have been issued and no proceedings
for that purpose shall have been commenced or shall be pending or, to the
knowledge of the Company, shall be contemplated.
(b) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
condition (financial or other), business, prospects, properties or results of
operations of the Company or any Subsidiary, which in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Securities.
(c) The Initial Purchasers shall not have been advised by the Company
or shall not have reasonably concluded and disclosed to the Company that the
Offering Memorandum contains an untrue statement of a fact which in the opinion
of the Initial Purchasers or their counsel is material or omits to state a fact
which in the opinion of the Initial Purchasers or their counsel is material and
is required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) The Company shall have furnished to the Initial Purchasers the
opinion of Xxxxxxxx, Kill & Olick, P.C., counsel to the Company, dated the
Closing Date substantially to the effect that:
-17-
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with all requisite corporate power and authority to own its
properties and conduct its business as presently conducted;
(ii) Each Subsidiary has been duly incorporated or organized and
is validly existing as a corporation or partnership under the laws of the
jurisdiction in which it is incorporated or organized, with all requisite
corporate power and authority to own its properties and conduct its
business as presently conducted; Super Laundry Equipment Corp. and Grand
Wash & Dry Launderette, Inc. are in good standing under the laws of the
respective jurisdictions in which they are incorporated or organized;
(iii) All the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid
and non-assessable. All outstanding shares of capital stock of each
Subsidiary are owned by the Company, free and clear of any security
interests, claims, liens or encumbrances, except as disclosed in the
Offering Memorandum;
(iv) Except as disclosed in the Offering Memorandum, to the
actual knowledge of such counsel, there is no pending or threatened action,
suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or each Subsidiary which are
not disclosed in the Offering Memorandum and which, if adversely decided,
could reasonably be expected to have a Material Adverse Effect or
materially affect the issuance of the Securities or the consummation of the
transactions contemplated by this Agreement;
(v) This Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company, and the
Company has full corporate power and authority to enter into this Agreement
and the Registration Rights Agreement;
(vi) Except as disclosed in the Offering Memorandum, to the
actual knowledge of such counsel, no consent, approval, authorization or
order of any federal, New York or Delaware court or governmental agency or
body is required for the consummation of the transactions contemplated
hereby, except such as may be required under the Blue Sky laws of any
jurisdiction in connection with the purchase and resale of the Securities
by the Initial Purchasers (as to which such counsel need express no
opinion) (assuming that any Eligible Purchaser who buys the Securities in
the Exempt Resales is a Qualified Institutional Buyer or an Accredited
Investor, the accuracy of the Initial Purchasers' representations and
those of the Company in this Agreement regarding the absence of general
solicitation in connection with the Exempt Resales, and the accuracy of
the representations made by an Accredited Investor who purchases Securities
pursuant to an Exempt Resale as set forth in the letter of representation
executed by such Accredited Investor in the form of Annex A to the Offering
Memorandum) and such other approvals (specified in such opinion) as have
been obtained or those, the failure to obtain would result in a Material
Adverse Effect;
-18-
(vii) To such counsel's actual knowledge, neither the Company
nor any Subsidiary (A) is presently in breach of, or in default (nor has an
event occurred that with notice, lapse of time or both would constitute
such a default) under, any indenture, mortgage, deed of trust, note, bond,
debenture, bank loan or credit agreement, or any other evidence of
indebtedness, agreement or instrument to which the Company or any
Subsidiary or Coinmach Laundry is a party, (B) is in violation of its
certificate or articles of incorporation or bylaws or other organizational
documents, or (C) has received any notice of conflict with the asserted
rights of others in respect of trademarks, service marks or other rights
necessary for the conduct of their business, in each case in which such
breach, default, violation or conflict would have a Material Adverse
Effect, except as indicated in the Offering Memorandum;
(viii) Neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated, nor the
fulfillment of the terms hereof, will conflict with, result in a breach of,
or constitute a default under (A) the terms of any indenture or other
agreement or instrument known to such counsel to which the Company or any
Subsidiary or Coinmach Laundry is a party or (B) any federal, New York or
Delaware law, statute, rule or regulation which is normally applicable to
corporations such as the Company, or, to such counsel's knowledge, any
judgment, order, decree, consent or memorandum of understanding of any
federal, New York or Delaware court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of the Subsidiaries (where such breach or default would have
a Material Adverse Effect) (assuming (1) that any Eligible Purchaser who
buys the Securities in the Exempt Resales is a Qualified Institutional
Buyer or an Accredited Investor, (2) the accuracy of the Initial
Purchasers' representations and those of the Company in this Agreement
regarding the absence of general solicitation in connection with the Exempt
Resales, (3) the accuracy of the representations made by an Accredited
Investor who purchases Securities pursuant to an Exempt Resale as set forth
in the letter of representation executed by such Accredited Investor in the
form of Annex A to the Offering Memorandum) (provided that such counsel
need not express any opinion regarding the Blue Sky laws of any
jurisdiction), or the charter or by-laws of the Company;
(ix) The Securities have been duly and validly authorized by the
Company for issuance, and the Company has full corporate power and
authority to issue, sell and deliver the Securities; the Securities, when
executed by the Company and authenticated by the Trustee in accordance with
the Indenture and 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 enforceable against the Company
in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relative to
creditors' rights generally and subject to the applicability of general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement
is considered in a proceeding in equity or at law);
-19-
(x) The Exchange Notes have been duly and validly authorized by
the Company for issuance in accordance with the terms of the Indenture;
(xi) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now
or hereafter in effect relative to creditors' rights generally and subject
to the applicability of general principles of equity and the discretion of
the court before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in equity or at
law); the Indenture complies as to form in all material respects with the
requirements of the TIA, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder; it is not
necessary in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers in the manner contemplated by this Agreement or
in connection with the Exempt Resales to qualify the Indenture under the
TIA;
(xii) The statements describing statutes, regulations or legal
or governmental proceedings under the captions "Business and Properties -
Legal Proceedings", "Certain Federal Income Tax Considerations" and
"Transfer Restrictions" in the Offering Memorandum are correct as to legal
matters set forth therein in all material respects;
(xiii) The statements in the Offering Memorandum, insofar as
they are descriptions of contracts, agreements or other legal documents,
are accurate in all material respects and present fairly the information
required to be shown.
(xiv) The Securities issued on the date hereof conform in all
material respects to the description thereof contained in the Offering
Memorandum;
(xv) When the Securities are issued and delivered to the Initial
Purchasers pursuant to this Agreement, such Securities will not be of the
same class (within the meaning of Rule 144A(d)(3) under the Act) as any
security of the Company that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a
United States automated interdealer quotation system;
(xvi) No registration of the Securities under the Act is
required for the sale of the Securities by the Company to the Initial
Purchasers as contemplated in this Agreement or for the Exempt Resales
(assuming (A) that any Eligible Purchaser who buys the Securities in the
Exempt Resales is a Qualified Institutional Buyer or an Accredited
Investor; (B) the accuracy of the Initial Purchasers' representations and
those of the Company in this Agreement regarding, among other things, the
absence of general solicitation in connection with the Exempt Resales, (C)
the accuracy of the representations made by each Accredited Investor who
purchases Securities pursuant to an Exempt Resale as set forth in the
letter of representation executed by such Accredited Investor in the form
of Annex A to the Offering Memorandum and (D) the due performance by the
Initial Purchasers of the agreements set
-20-
forth in Section 2(b) hereof, it being understood that no opinion is
expressed as to any resale other than the Exempt Resales;
(xvii) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of
the Securities by the Initial Purchasers;
(xviii) The Company is not an "investment company" or subject to
regulation as an "investment company" under the 1940 Act; and
In addition, such counsel shall also state that such counsel has
participated in conferences with representatives of the Initial Purchasers,
officers and other representatives of the Company and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Offering Memorandum and related matters
were discussed and that, although such counsel is not independently
verifying or passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except as set forth in clauses (v), (xii) and (xiii)
of this Section 7(d)), on the basis of the foregoing (relying as to
materiality to a large extent upon officers and other representatives of
the Company), no facts have come to the attention of such counsel which
lead such counsel to believe that the Offering Memorandum as of its date or
the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, that such counsel need not
express any comment with respect to (i) the financial statements and
schedules contained therein or incorporated therein by reference, including
the notes thereto, the auditors' report thereon and the related summary of
accounting policies, and (ii) the other financial and statistical data
included therein (including projections).
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of New York, the
General Corporation Law of the State of Delaware and the federal laws of
the United States of America, to the extent applicable, and are rendered at
the request of the Company to, and may be relied upon solely by, the
Initial Purchasers and shall so state therein.
(e) The Initial Purchasers shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxx L.L.P., counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial Purchasers, with respect to such
matters as the Initial Purchasers may request.
(f) The Initial Purchasers and the Company shall have received a
letter addressed to the Initial Purchasers, and dated the date hereof and the
Closing Date from Ernst & Young LLP, independent public accountants,
substantially in the form heretofore approved by the Initial Purchasers and the
Company.
-21-
(g) There shall not have been any material change in the capital stock
of the Company nor any material increase in the short-term or long-term debt of
the Company (other than in the ordinary course of business) from that set forth
or contemplated in the Offering Memorandum (or any amendment or supplement
thereto); there shall not have been, since the respective dates as of which
information is given in the Offering Memorandum, except as may otherwise be
stated in the Offering Memorandum, any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; and the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Offering Memorandum (or any amendment or supplement
thereto); and the Initial Purchasers shall have received a certificate, dated
the Closing Date and signed by the president and the chief financial officer of
the Company (or such other officers as are acceptable to the Initial
Purchasers), to the effect set forth in this Section 7(h) and in Section 7(i)
hereof.
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied in any material respect with any of its agreements
herein contained and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
(i) The Securities shall have been approved for trading on PORTAL.
(j) The Company shall have furnished or caused to be furnished to the
Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers and counsel for the Initial
Purchasers.
Any certificate or document signed by any Authorized Officer of the Company
and delivered to the Initial Purchasers, or to counsel for the Initial
Purchasers, shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the statements made therein.
8. Expenses. (a) Whether or not the purchase and sale of the Securities
hereunder is consummated or this Agreement is terminated pursuant to Section 9
hereof, the Company agrees to pay the following costs and expenses and all other
costs and expenses incident to the performance by it of its obligations
hereunder: (i) the preparation, printing or reproduction of the Offering
Memorandum (including financial statements thereto), this Agreement, the
Registration Rights Agreement and the Indenture, (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Offering Memorandum as may be
reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing (or reproduction), authentication,
issuance and delivery of certificates for the Securities including any stamp
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
-22-
and delivered in connection with the offering of the Securities; (v) the fees
payable in connection with the application for quotation of the Securities on
PORTAL; (vi) the qualification of the Securities, if applicable, for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 4(f) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (vii) the performance by the Company of its
obligations under the Registration Rights Agreement, and (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company. The Company hereby
agrees that it will pay in full on the Closing Date the fees and expenses
referred to in clause (vi) of this Section 8 by delivering to counsel for the
Initial Purchasers on such date a check payable to such counsel in the requisite
amount.
(b) If the purchase and sale of the Securities hereunder is not
consummated because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder other than by reason of a default by the
Initial Purchasers hereunder or in payment for the Securities on the Closing
Date, the Company shall reimburse the Initial Purchasers promptly upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities
and the other transactions contemplated hereby.
9. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company, by notice to the
Company, if prior to the Closing Date (a) there shall occur any default or
breach by the Company hereunder or the failure to satisfy any of the conditions
contained in Sections 4 or 7 hereof, (b) if there has been, since the date of
this Agreement or since the respective dates as of which information is provided
in the Offering Memorandum and prior to the Closing Date, any material adverse
change or any downgrading of any of the Company's securities or the placement of
any such securities on a so-called "credit watch" or similar list by any major
credit rating agency, or (c) if, since the date of this Agreement and prior to
the Closing Date, (i) there has occurred any material adverse change in the
financial markets of the United States or any outbreak of hostilities or other
calamity or crisis, the effect of which on the financial securities markets of
the United States is such as to make it, in the reasonable good faith judgment
of the Initial Purchasers, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (ii) trading in any of the
securities of the Company has been suspended by the Commission or by the primary
exchange where such securities are traded, (iii) trading generally on the New
York Stock Exchange or the American Stock Exchange has been suspended (other
than by limitation on hours or number of days of trading), or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by the New York Stock Exchange, the American Stock Exchange
or by order of the Commission or any other governmental authority or (iv) a
banking moratorium has been declared by any of the federal, Texas or New York
authorities.
If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in
Section 8.
-23-
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be directed to Xxxxxxxxx & Company, Inc., 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, attention of Syndicate Department, with a copy to
Xxxxxx & Xxxxxx L. L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx
00000, Attention: Xxxxxxx X. Xxxxx, Esq.; notices to the Company shall be
directed to Coinmach Corporation, 00 Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxx, Senior Vice President, Treasurer and Secretary of
the Company, with a copy to Xxxxxxxx, Kill & Olick, P.C., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx X. Xxxxx, Esq.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company and their respective successors, and
legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to provide any person, firm or corporation, other
than the Initial Purchasers, the Company and its respective successors and legal
representatives and the controlling persons and officers, employees, directors
and shareholders referred to in Section 6 and their respective heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Initial Purchasers, the Company and their
respective successors and legal representatives, and said controlling persons,
shareholders, officers and directors and their respective heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Initial Purchasers shall be deemed to be a
successor by reason merely of such purchase.
12. Governing Law and Time. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without giving effect to any
provisions thereof relating to conflicts of law. Specified times of day refer to
New York time, unless otherwise specified.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchasers and the Company in accordance with its terms.
-24-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
Coinmach Corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Senior Vice President
----------------------------
-25-
Confirmed as of the date first
above mentioned.
XXXXXXXXX & COMPANY, INC.
By: /s/ R. Xxxxx Xxxxxxx
-----------------------------------
Name: R. Xxxxx Xxxxxxx
--------------------------------
Title: Managing Director
---------------------------------
LAZARD FRERES & CO. LLC
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Managing Director
---------------------------------
BT ALEX. XXXXX INCORPORATED
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
--------------------------------
Title: Managing Director
---------------------------------
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Xxxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxxx X. Xxxxx
--------------------------------
Title: Managing Director
---------------------------------
-26-
SCHEDULE I
Coinmach Corporation
--------------------
Initial Purchaser Notes
----------------- -----
Xxxxxxxxx & Company, Inc. $ 60,000,000
Lazard Freres & Co. LLC $ 20,000,000
BT Alex. Xxxxx Incorporated $ 10,000,000
First Union Capital Markets Corp. $ 10,000,000
------------
TOTAL $100,000,000
