STANDARD COMMERCIAL TOBACCO CO., INC.
$115,000,000
8-7/8% SENIOR NOTES DUE 2005
PURCHASE AGREEMENT
July 25, 1997
BT SECURITIES CORPORATION
WHEAT, FIRST SECURITIES, INC.
c/o BT Securities Corporation
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Standard Commercial Tobacco Co., Inc., a North Carolina
corporation (the "Issuer"), Standard Commercial Corporation (the "Parent") and
Standard Wool, Inc., a wholly owned subsidiary of the Parent (the "Subsidiary
Guarantor" and, together with the Parent, the "Guarantors") hereby confirm their
joint and several agreement with you (the "Initial Purchasers") as set forth
below.
1. The Securities. Subject to the terms and conditions herein
contained, the Issuer proposes to issue and sell to the Initial Purchasers
$115,000,000 aggregate principal amount of its 8-7/8% Senior Notes due 2005 (the
"Notes"). The Notes will be guaranteed (collectively, the "Guarantees") on a
senior basis by the Parent and on a senior basis by the Subsidiary Guarantor.
The Notes and the Guarantees are collectively referred to herein as the
"Securities". The Securities are to be issued under an indenture (the
"Indenture") to be dated as of August 1, 1997 by and among the Issuer, the
Guarantors and Crestar Bank, as Trustee (the "Trustee"). All of the issued and
outstanding capital stock of the Issuer and the Subsidiary Guarantor will be
pledged by the Company to the Trustee for the benefit of holders of the Notes.
On or prior to the Closing Date (as defined below), the Issuer
will execute a new credit facility with a commitment of not less than $170
million among the Issuer and two of its subsidiaries, as borrowers, Deutsche
Bank A.G. as agent and
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Bankers Trust Commercial Corporation as co-agent (the "Global Bank Facility").
The Securities 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 Securities, the Issuer and
the Guarantors have prepared a preliminary offering memorandum dated July 10,
1997 (the "Preliminary Memorandum"), and a final offering memorandum dated July
25, 1997 (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 Securities, the terms of the
offering of the Securities, a description of the Global Bank Facility, a
description of the Issuer and the Guarantors and any material development
relating to the Issuer and the Guarantors occurring after the date of the most
recent historical financial statements included therein.
The Issuer and the Guarantors understand that the Initial
Purchasers propose to make an offering of the Notes only on the terms and in the
manner set forth in the Final Memorandum and Section 8 hereof as soon as the
Initial Purchasers deem advisable after this Agreement has been executed and
delivered, to persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("QIBs") 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 to a limited number of other
institutional "accredited investors" ("Accredited Investors") as defined in Rule
501(a)(1), (2), (3) and (7) under Regulation D of the Act in private sales
exempt from registration under the Act, and outside the United States to certain
persons in reliance on Regulation S under the Act.
The Initial Purchasers and their direct and indirect
transferees of the Securities will be entitled to the benefits of the
Registration Rights Agreement to be dated as of the Closing Date (as defined)
(the "Registration Rights Agreement"), pursuant to which the Issuer and the
Guarantors will agree, among other things, (i) to file with the Securities and
Exchange Commission (the "Commission"), under the circumstances set forth
therein, a registration statement under the Act (the "Exchange Offer
Registration Statement"), relating to Senior Notes due 2005 of the Issuer (the
"Exchange Notes") to be offered in exchange (the "Exchange Offer") for the
Notes, (ii) as
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and to the extent required by the Registration Rights Agreement, to file with
the Commission a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements"), relating to the resale
by certain holders of the Notes, and to use its best efforts to cause such
Registration Statements to be declared effective and (iii) to issue and deliver
Private Exchange Notes (as defined in the Registration Rights Agreement)
pursuant to the Private Exchange (as defined in the Registration Rights
Agreement) to any Initial Purchaser holding Notes having the status of an unsold
allotment. This Purchase Agreement (this "Agreement"), the Notes, the
Guarantees, the Exchange Notes, the Private Exchange Notes, the Indenture and
the Registration Rights Agreement are hereinafter referred to collectively as
the "Operative Documents."
2. Representations and Warranties. The Issuer and each of the
Guarantors, jointly and severally, represent and warrant to and agree with each
of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of its date 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 Issuer in writing by the Initial Purchasers expressly
for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(b) As of the Closing Date, the Parent will have the
authorized, issued and outstanding capitalization set forth in the
Final Memorandum; all of the outstanding shares of capital stock of the
Parent and each of its subsidiaries, a complete and correct list of
which is attached as Schedule I hereto (each, a "Subsidiary" and
collectively, 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; and except as set forth in the Final Memorandum, there
are no mate-
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rial (i) options, warrants or other rights to purchase, (ii) agreements
or other obligations of the Issuer 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 Parent or any of the
Subsidiaries outstanding. Except for the Subsidiaries and as disclosed
in the Final Memorandum, none of the Parent or the Subsidiaries owns,
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 Parent and the Subsidiaries is duly
incorporated, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and has all requisite
corporate power and authority to own its properties and conduct its
business as now conducted and as described in the Final Memorandum;
each of the Parent and the Subsidiaries 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 would not, individually or in the aggregate,
have a material adverse effect on the general affairs, business,
condition (financial or otherwise), prospects or results of operations
of the Parent and the Subsidiaries taken as a whole (any such event, a
"Material Adverse Effect").
(d) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
respective obligations under this Agreement and the other Operative
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the
power and authority to issue, sell and deliver the Securities as
contemplated by this Agreement.
(e) This Agreement has been duly and validly authorized,
executed and delivered by the Issuer and the Guarantors.
(f) The Indenture has been duly and validly authorized by the
Issuer and the Guarantors and, when duly executed and delivered in
accordance with its terms (assuming the due execution and delivery
thereof by the Trustee), will be the legally valid and binding
agreement of each of the Issuer and the Guarantors, enforceable against
each of
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them in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by the discretion of the court
before which any proceeding therefor may be brought; and the Indenture
meets the requirements for qualification under the Trust Indenture Act
of 1939, as amended (the "TIA").
(g) The Notes have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Issuer pursuant to
this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof, will be the legally valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance
with their terms and entitled to the benefits of the Indenture, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by the discretion of
the court before which any proceeding therefor may be brought.
(h) The Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized for issuance by the Issuer and,
when issued and authenticated in accordance with the terms of the
Indenture, the Registration Rights Agreement, the Exchange Offer and
the Private Exchange, will be the legally valid and binding obligations
of the Issuer, enforceable against the Issuer in accordance with their
terms and entitled to the benefits of the Indenture, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by the discretion of
the court before which any proceeding therefor may be brought.
(i) The Guarantees have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Guarantors and, when
the Notes are duly and validly
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authorized, executed, issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof, will be the legally valid and binding
obligations of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms and entitled to the benefits
of the Indenture, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law) or by the discretion of the court before which any proceeding
therefor may be brought.
(j) The Registration Rights Agreement has been duly authorized
by the Issuer and the Guarantors and, when duly executed and delivered
by the Issuer and the Guarantors (assuming the due execution and
delivery thereof by you), will be the legally valid and binding
obligation of the Issuer and the Guarantors, enforceable against each
of them in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by the discretion of the court
before which any proceeding therefor may be brought and, as to rights
of indemnification and contribution, by principles of public policy or
U.S. federal or state securities laws relating thereto.
(k) The Global Bank Facility, substantially in the form most
recently delivered to the Initial Purchasers prior to the date of this
Agreement, has been duly authorized by the Issuer and the guarantors
thereof and, when duly executed and delivered by the Issuer and the
guarantors thereof, will be the legally valid and binding obligation of
the Issuer and the guarantors thereof, enforceable against each of them
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by the
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discretion of the court before which any proceeding therefor may be
brought.
(l) No consent, waiver, approval, authorization or order of or
filing, registration, qualification, license or permit of or with any
court or governmental agency or body, or third party is required for
(i) the issuance and sale by the Issuer of the Notes to the Initial
Purchasers or the consummation by the Issuer of each of the other
transactions contemplated hereby or by any of the other Operative
Documents, (ii) the issuance by the Guarantors of the Guarantees or the
consummation by the Guarantors of the other transactions contemplated
hereby or by any of the Operative Documents, and (iii) the execution by
the Issuer and the guarantors thereof of the Global Bank Facility and
the consummation by the Issuer and the guarantors of each of the
transactions contemplated by the Global Bank Facility, except, in each
case, such as have been or, prior to the Closing Date, will be obtained
and such as may be required under applicable state securities or "Blue
Sky" laws in connection with the purchase and resale of the Securities
by the Initial Purchasers, and with respect to the Registration
Statements, such as are required under the Act and applicable state
securities "Blue Sky" laws. None of the Parent or any of the
Subsidiaries is (A) in violation of its charter or bylaws (or similar
organizational document), (B) 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 (C) 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, 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, individually or in the aggregate,
have a Material Adverse Effect.
(m) The execution, delivery and performance by the Issuer and
the Guarantors of this Agreement and each of the other Operative
Documents (to the extent a party thereto) and the consummation of the
transactions contem-
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plated hereby and thereby (including, without limitation, the issuance
and sale of the Securities to the Initial Purchasers and the issuance
of the Exchange Notes or Private Exchange Notes in the Exchange Offer
or the Private Exchange, as the case may be) do not and will not
violate, conflict with or constitute or result in a breach of or a
default under (or constitute an event which with notice or passage of
time or both would constitute a default under) or cause an acceleration
of any obligation under, or result in the imposition or creation of (or
the obligation to create or impose) a Lien (as defined in the Final
Memorandum) on any properties or assets of the Parent or any Subsidiary
with respect to (A) the terms or provisions of any Contract, except for
any such conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (B)
the charter or bylaws (or similar organizational document) of the
Issuer, the Parent or any of the Subsidiaries, or (C) (assuming
compliance by the Initial Purchasers with the Act and 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) any statute, judgment, decree, order, rule or regulation
applicable to the Issuer, the Parent or any of the Subsidiaries or any
of their respective properties or assets, except for any such conflict,
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect.
(n) Deloitte & Touche LLP, who is reporting on certain
financial statements of the Parent (on both a consolidated and
unconsolidated basis), the Issuer and the Subsidiary Guarantor in the
Final Memorandum, is an independent public accounting firm within the
meaning of the Act. The financial statements of the Parent (on both a
consolidated and unconsolidated basis), the Issuer and the Subsidiary
Guarantor and related notes thereto 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 all material respects in accordance with the Commission's
published rules and guidelines with respect to pro forma financial
statements and (iii) present fairly in all material respects the
financial position of the Parent (on both a consolidated and
unconsolidated basis), the Issuer and the Subsidiary Guarantor as of
the dates indicated and the results of
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their respective operations and the changes in the financial position
for the periods specified, in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout such
periods, except as otherwise stated therein. The summary and selected
financial and statistical data included 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 stated therein.
(o) 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
Exchange Act, (ii) have been prepared in all material respects in
accordance with the Commission's published 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.
(p) Other than as described in the Final Memorandum, there is
not pending or, to the knowledge of the Issuer or the Guarantors,
threatened any action, suit, proceeding, inquiry or investigation to
which the Parent or any of the Subsidiaries is a party, or to which the
property or assets of the Parent or any of the Subsidiaries is subject,
before or brought by any court, arbitrator or governmental agency or
body which, if determined adversely to the Parent or any such
Subsidiary, as the case may be, would, individually or in the
aggregate, have a Material Adverse Effect or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Securities to be sold hereunder or the consummation of
the other transactions described in the Final Memorandum.
(q) Each of the Parent and the Subsidiaries possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, foreign, local and other governmental authorities,
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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, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; each of the Parent and the Subsidiaries
has fulfilled and performed all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any
such Permit, except where the failure to perform such obligations or
the occurrence of such event would not have a Material Adverse Effect;
and none of the Parent 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, individually or in the
aggregate, have a Material Adverse Effect.
(r) Since the respective dates as to which information is
given in the Final Memorandum, except as described therein, (i) none of
the Parent 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, or 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 Parent and the Subsidiaries, taken as a
whole, (ii) none of the Parent 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
the Parent's regularly scheduled 1% Common Stock dividend on its Common
Stock in the ordinary course of business) and (iii) there shall not
have been any material change in the capital stock or long-term
indebtedness of the Parent or the Subsidiaries.
(s) Each of the Parent and the Subsidiaries has filed all
necessary federal or state and foreign income and franchise tax
returns, except where the failure to so file such returns would not,
individually or in the aggre-
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gate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon except as to taxes being contested in good faith and for
which adequate reserves in accordance with GAAP have been provided, or
where the failure to pay any such taxes would not, individually or in
the aggregate, have a Material Adverse Effect; and other than tax
deficiencies which the Parent or any of the Subsidiaries is contesting
in good faith and for which the Parent or such Subsidiary has provided
adequate reserves in accordance with GAAP, there is no tax deficiency
that has been asserted against the Parent or any Subsidiary that would
have, individually or in the aggregate, a Material Adverse Effect.
(t) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the Issuer
and the Parent believe to be reliable and accurate in all material
respects.
(u) None of the Issuer or the Guarantors or any agent acting
on its behalf has taken or will take any action that might cause this
Agreement or the sale of the Securities 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.
(v) Each of the Parent and the Subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property described in the Final
Memorandum as being owned by it and good and marketable title to the
leasehold estates in the real and personal property described in the
Final Memorandum as 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, individually or in the aggregate, have a Material Adverse Effect.
All leases, contracts and agreements to which any of the Parent or the
Subsidiaries is a party or by which any of them is bound are valid and
enforceable against each of the Parent or such Subsidiary, as the case
may be, and are valid and enforceable against the other party or
parties thereto and are in full force and effect with only such
exceptions as would not, individually or in the aggregate, have a
Material Adverse Effect, except as such enforceability may be limited
by bankruptcy, insolvency, reor-
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ganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by the discretion of
the court before which any proceeding therefor may be brought. The
Parent 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 Parent or any of 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, if such assertion of infringement or
conflict were sustained, would have a Material Adverse Effect.
(w) There are no legal or governmental proceedings involving
or affecting any of the Parent 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 so described in the
Final Memorandum, nor are there any material contracts or other
documents which would be required to be described in a prospectus
pursuant to the Act that are not so described in the Final Memorandum.
(x) Except as described in the Final Memorandum or as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (A) each of the Parent and the Subsidiaries is
in compliance with and not subject to any known liability under
applicable Environmental Laws (as defined below), (B) each of the
Parent and the Subsidiaries has made all filings and provided all
notices required under any applicable Environmental Law, and has, and
is in compliance with, all Permits required under any applicable
Environmental Laws and each of them is in full force and effect, (C)
there is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation or investigation, proceeding,
notice or demand letter or request for information pending or
threatened against the Parent or any of the Subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by any of
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the Parent or any Subsidiary, (E) none of the Parent or any
Subsidiaries has received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law, (F) no property or facility of
the Parent or any Subsidiary is (i) listed or proposed for listing on
the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental
authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal or state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials into
the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and above ground storage tanks and related piping,
and emissions, discharges, releases or threatened releases therefrom.
(y) There is no strike, labor dispute, slowdown or work
stoppage with the employees of any of the Parent or the Subsidiaries
which is pending or to the knowledge of the Parent or the Subsidiaries
threatened.
(z) Each of the Parent and the Subsidiaries carries insurance
in such amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties except where the
failure to carry such insurance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(aa) Except as described in the Final Memorandum, none of the
Issuer, the Parent or any of the Subsidiaries has incurred any
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
Retire-
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ment Income Security Act of 1974, as amended ("ERISA"), to which any of
the Issuer, the Parent or the Subsidiaries makes or ever has made a
contribution and in which any employee of any of the Issuer, the Parent
or any such Subsidiary is or has ever been a participant, which in the
aggregate could have a Material Adverse Effect. With respect to such
plans, each of the Issuer, the Parent and the Subsidiaries is in
compliance in all respects with all applicable provisions of ERISA,
except where the failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect.
(bb) Each of the Parent 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.
(cc) None of the Parent or the Subsidiaries is or will be 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.
(dd) None of the Parent or the Subsidiaries has taken,
directly or indirectly, any action designed, or which might reasonably
be expected to cause or result, under the Exchange Act, in, or which
has constituted, stabilization or manipulation of the price of any
security of the Parent or the Subsidiaries to facilitate the sale or
resale of the Securities.
(ee) The Notes, the Guarantees, the Indenture, the
Registration Rights Agreement, this Agreement and the Global Bank
Facility conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
(ff) No holder of securities of the Issuer or the Guarantors
will be entitled to have such securities registered under the
registration statements required to be
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filed by the Issuer and the Guarantors pursuant to the Registration
Rights Agreement, other than as expressly permitted thereby.
(gg) Immediately after the consummation of the transactions
contemplated by this Agreement and the Indenture, the present fair
value of the assets of each of the Issuer and the Guarantors will
exceed the sum of its stated liabilities and identified contingent
liabilities; none of the Issuer or the Guarantors (each on a
consolidated basis) is, or will be (each on a consolidated basis),
after giving effect to the execution, delivery and performance of the
Notes, the Guarantees, this Agreement and the Indenture, and the
consummation of the transactions contemplated hereby and thereby, (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.
(hh) None of the Parent or 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 Securities in a manner that would require the
registration under the Act of the Securities 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 Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
(ii) No securities of the same class (within the meaning of
Rule 144A under the Act) as the Notes are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
are quoted in a U.S. automated inter-dealer quotation system.
(jj) None of the Parent, the Subsidiaries, any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) or any person acting on any of their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as
that term is defined in Regulation S under the Act ("Regulation S"))
with respect to the Securities; the Issuer and its respective
Affiliates and any person acting on any of its behalf
-16-
(other than the Initial Purchasers) have complied with the offering
restrictions requirement of Regulation S.
(kk) Assuming that the representations and warranties of the
Initial Purchasers contained in Section 8 are true and correct, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers or the reoffer and resale by the
Initial Purchasers in the manner contemplated by this Agreement to
register the Securities under the Act or to qualify the Indenture in
respect of the Securities under the TIA.
(ll) On the Closing Date, a valid and enforceable security
interest in the Collateral (as defined in the Indenture) will be
created in favor of the Trustee for the benefit of the Holders, subject
to no other lien, charge, encumbrance or interest.
(mm) On the Closing Date, the ownership of the Parent's
subsidiaries, will be such that all of its tobacco operating
subsidiaries will be direct or indirect subsidiaries of the Issuer and
all of its wool operating subsidiaries will be direct or indirect
subsidiaries of the Subsidiary Guarantor; PROVIDED that Standard Wool
(UK) Limited will be wholly owned by the Issuer and approximately 19.6%
of the capital stock of Standard Wool France will be owned by the
Issuer.
Any certificate signed by any officer of the Issuer or any
Guarantor and delivered to any Initial Purchaser or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Issuer or such
Guarantor, as the case may be, to each Initial Purchaser as to the matters
covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Issuer and the
Guarantors agree to issue and sell to the Initial Purchasers, and the Initial
Purchasers, acting severally and not jointly, agree to purchase $115,000,000
aggregate principal amount of the Notes (including the related Guarantees) in
the respective amounts set forth opposite their respective names on Schedule II
attached hereto at 97.25% of their principal amount. One or more certificates in
definitive form for the Notes and Guarantees that the Initial Purchasers have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or
-17-
names as the Initial Purchasers request upon notice to the Issuer at least 36
hours prior to the Closing Date, shall be delivered by or on behalf of the
Issuer 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) to
such account or accounts as the Issuer 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 Securities 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 August 1, 1997, or at such other place, time or date as the
Initial Purchasers, on the one hand, and the Issuer, on the other hand, may
agree upon, such time and date of delivery against payment being herein referred
to as the "Closing Date." The Issuer will make such certificate or certificates
for the Securities 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.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Securities 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 Issuer and the Guarantors. The Issuer and
the Guarantors covenant and agree with each of the Initial Purchasers that:
(a) The Issuer will not amend or supplement the Final
Memorandum or make 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, which consent shall not unreasonably be withheld.
The Issuer 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
Securities by the Initial Purchasers.
(b) The Issuer and the Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities
for offering and sale under the
-18-
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
Securities; provided, however, that in connection therewith, the Issuer
and the Guarantors 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 initial resale by the Initial
Purchasers of the Notes, the Exchange Notes or the Private Exchange
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 Issuer and the
Guarantors will promptly notify the Initial Purchasers thereof and will
prepare, at the expense of the Issuer, an amendment or supplement to
the Final Memorandum that corrects such statement or omission or
effects such compliance.
(d) The Issuer 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 Issuer will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) For so long as any of the Securities remain outstanding,
the Parent will furnish to the Initial Purchasers upon request copies
of all reports and other communications (financial or otherwise)
furnished by the Issuer 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 Parent or the Issuer with the
Commission or any national securities exchange on which any class of
securities of the Parent may be listed.
-19-
(g) None of the Issuer, the Guarantors or any of their
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 Securities in a
manner which would require the registration under the Act of the
Securities.
(h) None of the Issuer or any Guarantor will, nor will the
Parent 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
Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
(i) For so long as any of the Securities remain outstanding,
the Parent will make available at its expense, upon request, to any
holder of such Securities and any prospective purchasers thereof, the
information specified in Rule 144A(d)(4) under the Act, unless the
Parent is then subject to Section 13 or 15(d) of the Exchange Act.
(j) The Issuer and the Guarantors will use their best efforts
to (i) permit the Securities to be designated for trading in the
Private Offerings, Resales and Trading through Automated Linkages
market (the "PORTAL Market") of the NASD and (ii) permit the Securities
to be eligible for clearance and settlement through The Depository
Trust Company.
(k) In connection with Securities offered and sold in an
off-shore transaction (as defined in Regulation S) the Issuer 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 Parent and the Issuer agree, jointly and
severally, to pay all costs and expenses incident to the performance of their
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
-20-
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 Parent or the Issuer, (iv) preparation (including printing),
issuance and delivery to the Initial Purchasers of the Securities, (v) the
qualification of the Securities 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 Securities, (vii) fees and expenses
of the Trustee including reasonable fees and expenses of its counsel, (viii) all
expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL Market, (ix) any fees charged by
investment rating agencies for the rating of the Securities and (x) all
reasonable out-of-pocket expenses of the Initial Purchasers. If the sale of the
Securities 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, because this Agreement is terminated or because of any failure,
refusal or inability on the part of the Issuer or the Guarantors to perform all
obligations and satisfy all conditions on their 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 Parent and Issuer agree, jointly and
severally, to promptly reimburse the Initial Purchasers upon demand for all
out-of-pocket 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 Securities.
7. Conditions of the Initial Purchasers' Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Securities
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 Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP, counsel for
the Issuer and the Guarantors, in form and substance satisfactory to
counsel for the Initial Purchasers, to the effect that:
-21-
(i) Each of the Issuer and the Guarantors is duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and is duly
qualified to do business as a foreign corporation in good
standing in each jurisdiction in the United States in which
they own or lease properties, or conduct any business, so as
to require such qualification, except where the failure to so
qualify would not, individually or in the aggregate, have a
Material Adverse Effect.
(ii) All of the outstanding shares of capital stock
of the Issuer and the Guarantors have been duly authorized and
validly issued, are fully paid and nonassessable and all of
the capital stock of the Issuer and the Subsidiary Guarantor
is owned by the Parent.
(iii) Each of Issuer and the Guarantors has the
requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and each of
the other Operative Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby,
including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes and the
Guarantees, as applicable, as contemplated by this Agreement.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Issuer and the
Guarantors.
(v) The Indenture has been duly and validly
authorized by the Issuer and the Guarantors and, when duly
executed and delivered in accordance with its terms (assuming
the due execution and delivery thereof by the Trustee), will
be the valid and legally binding agreement of each of the
Issuer and the Guarantors, enforceable against each of the
Issuer and the Guarantors in accordance with its terms, except
as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights generally, by general equitable principles (regardless
of whether such enforceability is considered in a proceeding
in equity or at law) or by the discretion of the court
-22-
before which any proceeding therefor may be brought; and the
Indenture meets the requirements for qualification under the
TIA.
(vi) When issued and authenticated in accordance with
the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, the Notes will
be the legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their terms
and entitled to the benefits of the Indenture, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) or by the discretion of the court before
which any proceeding therefor may be brought.
(vii) When issued and authenticated in accordance with
the terms of the Indenture, the Registration Rights Agreement,
the Exchange Offer and the Private Exchange, the Exchange
Notes and the Private Exchange Notes will be the legally valid
and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their terms and entitled to the
benefits of the Indenture, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally, by
general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) or by the discretion of the court before which any
proceeding therefor may be brought.
(viii) The Guarantees have been duly and validly
authorized for issuance and sale to the Initial Purchasers by
the Guarantors and, when the Notes are duly and validly
authorized, executed, issued and authenticated in accordance
with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the
legally valid and binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in
accordance with their terms and entitled to the benefits of
the Indenture, except as such enforceability
-23-
may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to one affecting creditors' rights generally, by
general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) or by the discretion of the court before which any
proceeding therefor may be brought.
(ix) The Registration Rights Agreement has been duly
authorized by the Issuer and the Guarantors and, when duly
executed and delivered by the Issuer and the Guarantors in
accordance with its terms (assuming the due execution and
delivery thereof by the other parties thereto), will be the
legally valid and binding obligation of the Issuer and each of
the Guarantors, enforceable against each of them in accordance
with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by the
discretion of the court before which any proceeding therefor
may be brought.
(x) The Global Bank Facility has been duly
authorized by the Issuer and the guarantors thereof and, when
duly executed and delivered by the Issuer and the guarantors
thereof in accordance with its terms (assuming the due
execution and delivery thereof by the other parties thereto),
will be the legally valid and binding obligation of the Issuer
and each of the guarantors thereof, enforceable against each
of them in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) or by the discretion of the court before
which any proceeding therefor may be brought.
(xi) The statements set forth in the Final Memorandum
under the captions "Principal Shareholders,"
"Business--Tobacco-Properties," "Business--Wool--
-24-
Properties, "Business-Legal Proceedings" and "Private
Placement," insofar as they purport to summarize matters of
United States law or other legal matters, fairly and
accurately summarize such laws and regulations in all material
respects.
(xii) The statements in the Final Memorandum under the
headings "Description of the Global Bank Facility," "The
Refinancing Plan," "Description of the Notes" and "Exchange
Offer and Registration Rights," insofar as such statements
purport to summarize certain provisions of the Indenture, the
Notes, the Guarantees, the Exchange Notes, the Registration
Rights Agreement and the Global Bank Facility and subject to
the limitations contained in such statements, provide a fair
and accurate summary in all material respects of such
provisions of such agreements.
(xiii) The execution, delivery and performance by the
Issuer and each of the Guarantors of the Purchase Agreement,
each of the other Operative Documents and the Global Bank
Facility (to the extent a party thereto) and the consummation
of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the
Securities to the Initial Purchasers) do not and 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 or
cause an acceleration of any obligation under, or result in
the imposition or creation of (or the obligation to create or
impose) a Lien (other than any Lien imposed or created under
the Global Bank Facility or disclosed in the Offering
Memorandum) on any properties or assets of the Issuer or any
Guarantor with respect to (i) the terms or provisions of any
Contract (which, based solely on representations of the Issuer
and the Guarantors are the only Contracts the termination of
which would result in a Material Adverse Effect) known to such
counsel to which the Issuer or any Guarantor is a party,
except for any such conflict, breach, violation, default or
event which would not, individually or in the aggregate, have
a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws (or similar organizational document)
of the Issuer or any Guarantor, or (iii) (assuming compliance
by the Ini-
-25-
tial Purchasers with the Act and 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) any statute, rule or regulation known to
such counsel to be of general applicability to, or any
judgment, decree or order known to such counsel to be
applicable to, the Issuer or any Guarantor or any of their
respective properties or assets, except for any such conflict,
breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
(xiv) To the knowledge of such counsel, no consent,
waiver, approval, authorization or order of or filing,
registration, qualification, license or permit of or with any
court or governmental agency or body of the United States or
the State of North Carolina or any third party is required for
the issuance and sale by the Issuer and the Guarantors of the
Securities to the Initial Purchasers or the consummation by
the Issuer and the Guarantors of the other transactions
contemplated hereby, including the creation and perfection of
the contemplated security interest in the Collateral, except
(i) in connection with the registration under the Act of the
Exchange Notes and the Guarantees of the Exchange Notes
pursuant to the Registration Rights Agreement, (ii) the
qualification of the Indenture under the TIA in connection
with the registration of the Exchange Notes, (iii) such as may
be required under Blue Sky laws, as to which such counsel need
express no opinion and (iv) those which have previously been
obtained.
(xv) To the knowledge of such counsel, there are no
legal or governmental proceedings involving or affecting any
of the Issuer or any of the Guarantors 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 so
described in the Final Memorandum, nor are there any material
contracts or other documents which would be required to be
described in a prospectus pursuant to the Act that are not so
described in the Final Memorandum.
(xvi) None of the Issuer or any of the Guarantors is,
or (assuming that the Securities are sold on the date hereof
as provided in the Purchase Agreement and proceeds from such
sale are applied as described in
-26-
the Final Memorandum under the caption "Use of Proceeds") will
on the date of such opinion be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended.
(xvii) No registration under the Act of the Securities
is required in connection with the sale of the Securities to
the Initial Purchasers as contemplated by this Agreement and
the Final Memorandum or in connection with the initial resale
of the Securities by the Initial Purchasers in accordance with
Section 8 of this Agreement, and prior to the commencement of
the Exchange Offer or the effectiveness of the Shelf
Registration Statement, the Indenture is not required to be
qualified under the TIA, in each case assuming (i) that the
purchasers who buy such Securities in the initial resale
thereof are (x) qualified institutional buyers as defined in
Rule 144A promulgated under the Act or (v) accredited
investors as defined in Rule 501(a) (1), (2), (3) or (7)
promulgated under the Act or (z) reasonably believed by the
Initial Purchasers to be persons other than U.S. Persons (as
such term is defined in Regulation S under the Act) to whom
such sale may be made in reliance on the exemption from
registration provided by Regulation S under the Act, (ii) the
accuracy and completeness of the Initial Purchasers'
representations in Section 8 and those of the Issuers and the
Guarantors contained in this Agreement regarding the absence
of a general solicitation in connection with the sale of such
Securities to the Initial Purchasers and the initial resale
thereof and (iii) the due performance by the Initial
Purchasers of the agreements set forth in Section 8 hereof.
(xviii) No securities of the same class (within the
meaning of Rule 144A under the Act) as the Notes are listed on
a national securities exchange registered under Section 6 of
the Exchange Act or are quoted in a United States automated
inter-dealer quotation system.
(xix) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance,
execution or delivery of the Securities will violate
Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
-27-
(xx) On the Closing Date, the ownership of the
Parent's subsidiaries, will be such that all of its tobacco
operating subsidiaries will be direct or indirect subsidiaries
of the Issuer and all of its wool operating subsidiaries will
be direct or indirect subsidiaries of the Subsidiary
Guarantor; PROVIDED that Standard Wool (UK) Limited will be
wholly owned by the Issuer and approximately 19.6% of the
capital stock of Standard Wool France will be owned by the
Issuer.
At the time the foregoing opinion is delivered, Xxxxxx Xxxxxxx
Xxxxx & Xxxxxx LLP shall additionally state that it has participated in
conferences with officers and other representatives of the Issuer and
the Guarantors, representatives of the independent public accountants
for the Issuers 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, and, although it
has not independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except to the extent
specified in subsections (xi) and (xii), no facts have come to its
attention which lead it to believe that the Final Memorandum, on the
date thereof or on 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 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 notes thereto and the other
financial, statistical and accounting data included in the Final
Memorandum).
In rendering the foregoing opinions, Xxxxxx Xxxxxxx Xxxxx &
Xxxxxx LLP may rely, to the extent such counsel deems proper, upon the
representations and certifications of officers of the Parent, the
Issuer and the Subsidiaries or of public officials.
References to the Final Memorandum in this subsection (a)
shall include any amendment or supplement thereto prepared by the
Issuer in accordance with the provisions of this Agreement at the
Closing Date.
-28-
(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 Rosenman & Colin LLP, New York counsel for the
Issuer and the Guarantors, in form and substance satisfactory to
counsel for the Initial Purchasers, to the effect that:
(i) Assuming due authorization of the Indenture by
the Issuer and the Guarantors, when duly executed and
delivered by the Issuer and the Guarantors in accordance with
its terms (assuming the Indenture has been duly authorized,
executed and delivered by the Trustee), the Indenture will be
the valid and legally binding agreement of each of the Issuer
and the Guarantors, enforceable against each of the Issuer and
the Guarantors in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) or by the discretion of the court before
which any proceeding therefor may be brought.
(ii) Assuming due authorization of the Notes by the
Issuer, when issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor
in accordance with the terms hereof, the Notes will be the
legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their terms
and entitled to the benefits of the Indenture, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) or by the discretion of the court before
which any proceeding therefor may be brought.
(iii) Assuming due authorization of the Exchange Notes
and the Private Exchange Notes by the Issuer, when issued and
authenticated in accordance with the terms of the Indenture,
the Registration Rights Agreement, the Exchange Offer and the
Private Exchange, the Exchange Notes and the Private Exchange
-29-
Notes will be the legally valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with
their terms and entitled to the benefits of the Indenture,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights generally, by general equitable principles (regardless
of whether such enforceability is considered in a proceeding
in equity or at law) or by the discretion of the court before
which any proceeding therefor may be brought.
(iv) Under New York law, a valid and enforceable
security interest in the Collateral has been created in favor
of the Trustee for the benefit of the Holders, subject to no
other lien, charge, encumbrance or interest.
(c) On the Closing Date, the Initial Purchasers shall have
received opinions in form and substance satisfactory to the Initial
Purchasers, dated as of the Closing Date, from such foreign counsel of
the Issuer and the Guarantors as are reasonably requested by the
Initial Purchasers and addressed to the Initial Purchasers with respect
to certain matters that the Initial Purchasers may reasonably require.
(d) 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, opinions and
other documents and information as it may reasonably request to pass
upon such matters.
(e) The Initial Purchasers shall have received from Deloitte &
Touche 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.
(f) The representations and warranties of the Issuer and the
Guarantors contained in this Agreement shall be
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true and correct in all material respects 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 officers of the Issuer and the Guarantors
made pursuant to any certificate delivered in accordance with the
provisions hereof shall be true and correct in all material respects on
and as of the date made and on and as of the Closing Date; the Issuer
and the Guarantors shall have performed all covenants and agreements
and satisfied all conditions on their 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 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.
(g) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(h) 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 Parent or any
Subsidiary 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.
(i) The Initial Purchasers shall have received a certificate
of each of the Issuer and the Guarantors, each dated the Closing Date,
signed on behalf of each of the Issuer and the Guarantors by its
Chairman of the Board, President or Chief Executive Officer and any
Vice President or the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Issuer
and the Guarantors contained in this Agreement are true and
correct in all material respects on and as of the date hereof
and on and as of the Closing Date, and the Issuer and the
Guarantors have per-
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formed all covenants and agreements and satisfied all
conditions on their 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 Securities hereunder has not
been enjoined (temporarily or permanently).
(j) On the Closing Date, the Initial Purchasers shall have
received the Registration Rights Agreement executed by the Issuer and
the Guarantors and such agreement shall be in full force and effect at
all times from and after the Closing Date.
(k) The Issuer shall have delivered to the Initial Purchasers
a true, correct and complete copy of the Global Bank Facility, the
Issuer and the other parties thereto shall have executed and delivered
the Global Bank Facility; and the Global Bank Facility shall be in full
force and effect, subject only to the Closing hereunder.
(l) On the Closing Date, the ownership of the Parent's
subsidiaries, will be such that all of its tobacco operating
subsidiaries will be direct or indirect subsidiaries of the Issuer and
all of its wool operating subsidiaries will be direct or indirect
subsidiaries of the Subsidiary Guarantor; PROVIDED that Standard Wool
(UK) Limited will be wholly owned by the Issuer and approximately 19.6%
of the capital stock of Standard Wool France will be owned by the
Issuer.
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
Issuer 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.
-32-
8. Offering of Securities; Restrictions on Transfer. (a) Each
of the Initial Purchasers represents and warrants (as to itself only) that it is
a QIB. Each of the Initial Purchasers agrees with the Issuer (as to itself only)
that (i) it has not and will not solicit offers for, or offer or sell, the
Securities 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 Securities only from, and will offer the
Securities 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 such person has represented to
the Initial Purchasers 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 Securities, 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
this clause (B), in purchasing such Securities 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).
(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 complied and will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes any Memorandum or any such other material,
in all cases at its own expense; (ii) the Securities 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 Securities and will offer and sell the Securities (A) as part of
its dis-
-33-
tribution 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 Securities, 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 Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the
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(b) and not defined in this Agreement have the
meanings given to them in Regulation S.
(c) Each of the Initial Purchasers represents and warrants (as
to itself only) that the source of funds being used by it to acquire the
Securities does not include the assets of any "employee benefit plan" (within
the meaning of Section 3 of ERISA) or any "plan" (within the meaning of Section
4975 of the Code).
9. Indemnification and Contribution. (a) The Issuer and the
Guarantors agree, jointly and severally, to indemnify and hold harmless the
Initial Purchasers, their affiliates 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 losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
-34-
(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 Issuer or any
Guarantor or based upon written information furnished by or on behalf
of the Issuer or any Guarantor filed in any jurisdiction in order to
qualify the Securities 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, in the light of the circumstances under which they
were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers, each such affiliate and
each such controlling person for any reasonable legal or other reasonable
expenses incurred by the Initial Purchasers, such affiliate 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, that the Issuer and the Guarantors will not be
liable (i) 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 Issuer or any Guarantor by the Initial Purchasers specifically for use
therein or (ii) with respect to the Preliminary Memorandum, to the extent that
any such loss, claim, damage or liability arises solely from the fact that the
Initial Purchasers sold Securities to a person to whom there was not sent or
given, on or prior to the written confirmation of such sale, a copy of the Final
Memorandum, as amended and supplemented, if the Issuer or any Guarantor shall
have previously furnished copies thereof to the Initial Purchasers in accordance
with this Agreement and the Final Memorandum, as amended and supplemented, would
have corrected any such untrue statement or omission. This indemnity agreement
will be in addition to any liability that the Issuer and the Guarantors may
otherwise have to the indemnified parties. The Issuer and the Guarantors shall
not be liable under this Section 9 for any settlement of
-35-
any claim or action effected without their prior written consent, which shall
not be unreasonably withheld.
The Initial Purchasers shall not, without the prior written
consent of the Issuer, effect any settlement or compromise of any pending or
threatened proceeding in respect of which the Issuer and the Guarantors are or
could have been a party, or indemnity could have been sought hereunder by the
Issuer and the Guarantors, unless such settlement (A) included an unconditional
written release of the Issuer and the Guarantors, in form and substance
reasonably satisfactory to the Issuer, 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 the
Issuer or the Guarantors.
(b) The Initial Purchasers agree, severally and not jointly,
to indemnify and hold harmless the Issuer and the Guarantors, their respective
directors, officers and each person, if any, who controls the Issuer and the
Guarantors 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
Issuer or any of the Guarantors 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, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Initial Purchaser, furnished to the Issuer
or any Guarantor by such Initial Purchaser specifically for use therein; and
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any reasonable legal or other expenses incurred by the
Issuer or any of the Guarantors 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
-36-
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.
Neither the Issuer nor the Guarantors shall, 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.
(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 the indemnifying party 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
-37-
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 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 Issuer 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 li-
-38-
abilities (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 Securities 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 Issuer and the Guarantors 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 (before deducting expenses) received by the Issuer 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 Issuer or the Guarantors on the one hand, or such Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
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 Issuer, the Guarantors 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 affiliate of an
Initial Purchaser, 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 Issuer or any Guarantor, each officer
-39-
of the Issuer or any Guarantor and each person, if any, who controls the Issuer
or any Guarantor 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 Issuer and
the Guarantors.
10. Survival Clause. The representations, warranties,
agreements, covenants, indemnities and other statements of the Issuer, the
Guarantors, their 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 Issuer, the Guarantors, any of their officers or directors, the
Initial Purchasers or any controlling person referred to in Section 9 hereof and
(ii) delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 9, 13 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 Issuer given prior to
the Closing Date in the event that the Issuer or any of the Guarantors 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:
(i) either the Issuer or the Guarantors 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 reasonable judgment of the Initial Purchasers, has
had or has a Material Adverse Effect, or there shall have been, in the
reasonable 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 any of the Parent or the Guarantors), except in
each case as described in the Final Memorandum (exclusive of any
amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the NASDAQ National Market shall
have been suspended or minimum or
-40-
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 reasonable judgment of the Initial Purchasers, makes
it impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any securities of the Issuer or the Parent shall have
been downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical rating organization or trading
in any such securities shall have been suspended by any stock exchange
on which any such securities are listed.
(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 the front cover page and in the
second, fourth, fifth and sixth paragraphs under the heading "Private Placement"
in the Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Issuer for the purposes of Sections 2(a) and 9 hereof and the Initial
Purchasers confirm that such statements are correct as of the date hereof and as
of the Closing Date.
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, with a copy to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx; if sent to the
Issuer or the Guarantors, shall be mailed or delivered to the Issuer at 0000
Xxxxxx Xxxx, X.X. Xxx
-00-
000, Xxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxxxx, with a
copy to Xxxxxx Xxxxxxx Xxxxx & Xxxxxx L.L.P., 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx.
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 Issuer and the Guarantors 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 Issuer and the Guarantors contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control an
Initial Purchaser 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 Issuer and the Guarantors, their respective officers and any person or
persons who control the Issuer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Securities 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.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Remainder of Page Intentionally Left Blank
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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 between the
Issuer, the Guarantors and the Initial Purchasers.
Very truly yours,
STANDARD COMMERCIAL TOBACCO CO., INC.
By: /s/Hampton X. Xxxxx, Xx.
---------------------------
Name: Hampton X. Xxxxx, Xx.
Title: Vice President
STANDARD COMMERCIAL CORPORATION
By: /s/X.X. Xxxx
----------------------------
Name: X.X. Xxxx
Title: Vice President & Secretary
STANDARD WOOL, INC.
By: /s/Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: Secretary
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The foregoing Agreement is
hereby confirmed and accepted
as of the date first
above written.
BT SECURITIES CORPORATION
By: /s/Xxxxxxx Xxxxx
-----------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
WHEAT, FIRST SECURITIES, INC.
By: /s/R. Xxxxxx Xxxxx IV
-----------------------
Name: R. Xxxxxx Xxxxx IV
Title: Managing Director
SCHEDULE I
SUBSIDIARIES
OF STANDARD COMMERCIAL CORPORATION
Name of Subsidiary Jurisdiction of Incorporation Percentage of Subsidiary's Stock
Owned by the Company
Standard Commercial Tobacco Co. Inc. North Carolina 100%
Trans-Continental Leaf Tobacco Xxxxxxxxxxxx 100%
Corporation
Standard Wool Australia (PTY) Ltd. Australia 100%
Xxxxxxx & Co.(a/k/a Standard Wool Germany 100%
Germany)
Standard Commercial Tobacco Company United Kingdom 100%
(UK) Ltd.
Exelka S.A. Greece 51%
Standard Wool France S.A. France 100%
Xxxxxxx Freres & CIE S.A. Switzerland 51%
Xxxxxxx Xxxxx Iharacat Sanayi Turkey 51%
Ticaret AS (a/k/a Izmir)
Standard Wool, Inc. Delaware 100%
Stancom Tobacco (Private) Ltd. Zimbabwe 100%
Standard Commercial Tobacco Company Canada 100%
(Canada)
Sena Investments (Private) Ltd. Zimbabwe 100%
Tobacco Processors (Zimbabwe) (PVT) Zimbabwe 18%
Ltd.
Transhellenic Tobacco S.A. Greece 51%
Transacatab Spa Italy 100%
World Wide Tobacco Espana S.A. Spain 67%
Standard Commercial Services, Inc. North Carolina 100%
Standard Commercial Tobacco Services United Kingdom 100%
UK
W.A. Xxxxx Company North Carolina 100%
Werkhof Gmbh Germany 100%
Tobacco Processors (Malawi) Ltd. Malawi 50%
Tobacco Processors (Lilongwe) Ltd. Malawi 51.92%
Xxxxx International, Ltd. Thailand 49%
Xxxxx Xxxxx Ihracat AS Turkey 50%
AOZT Transcontinental Leaf Tobacco St. Petersburg (Russia) 100%
Corporation
Stancom Zambia (PVT) Ltd. Zambia 100%
Stanfrie (PVT) Ltd. Zimbabwe 100%
Stancom Malawi Malawi 100%
Siemssen Threshie Jamaica 100%
Siemssen Threshie (Malawi) Ltd. Malawi 100%
Standard Wool of New Zealand New Zealand 100%
Xxxxxxx & Co BV Netherlands 100%
Bela Import-Export GmbH Germany 100%
Xxxxxx Xxxxxxxxxx S.A. France 100%
Hulme Wool Scouring Co. Australia 100%
CRES Tobacco Company North Carolina 100%
Peignage De Xx Xxxxx France 100%
Stawool Brokers PTY Ltd. Australia 100%
Standard Wool (Chile) S.A. Chile 100%
X.X. Xxxxx Pty Ltd. Australia 100%
Independent Wool Dumpers PTY Ltd. Australia 16%
Standard Wool South Africa South Africa 100%
(Propriety) Ltd.
Standard Wool Argentina Argentina 100%
X.Xxxxxx Zimbabwe (PVT) Ltd. Zimbabwe 18%
Mascot Wools PTY Ltd. Australia 100%
Transcontinental Participacues E Brazil 100%
Emprecendimentos LTDA
Epasa Exportadora de Productos Argentina 50%
Agrarios S.A.
Trans-Continental Farming Ltd. Canada 100%
Roca Sacif Argentina 100%
Standard Wool Holdings S.A Argentina 100%
Advhus Gestion France 100%
Eryka Mediterranee SARL Greece 100%
Xxxxx Xxxxxxxx India 100%
Esaltab (Zimbabwe) (PVT) Ltd. Zimbabwe 100%
Interrural Development Corporation Liechtenstein 100%
Siam Tobacco Export Corporation Ltd. Thailand 49%
Standard Wool Farming PTY Ltd. Australia 100%
SCHEDULE II
Principal
Amount of
Initial Purchaser Notes
BT Securities Corporation................................... $ 61,250,000
Wheat, First Securities, Inc................................ $ 53,750,000
Total.................................................. $115,000,000
