EXECUTION COPY
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PRECISE TECHNOLOGY, INC.
$75,000,000
11 1/8% Senior Subordinated Notes due 2007
Purchase Agreement
June 10, 1997
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
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PRECISE TECHNOLOGY, INC.
$75,000,000
11 1/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
June 10, 1996
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Precise Technology, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to Bear, Xxxxxxx & Co. Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated (the "Initial Purchasers") $75,000,000 aggregate principal
amount of its 11 1/8% Senior Subordinated Notes due 2007 (the "Notes"), subject
to the terms and conditions set forth herein. The Notes will be issued pursuant
to an indenture (the "Indenture"), to be dated the Closing Date (as defined
below), among the Company and Marine Midland Bank, as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture.
1. Issuance of Securities. The Company proposes, upon the terms and subject
to the conditions set forth herein, to issue and sell to the Initial Purchasers
an aggregate of $75,000,000 principal amount of Notes. The Company's payment
obligations under the Subordinated Notes (as defined below) will be jointly and
severally guaranteed (the "Subsidiary Guarantees") on a senior subordinated
basis by Precise TMP, Inc., Xxxxxx Tool, Mold & Die, Inc., Precise Polestar,
Inc., Precise Technology of Delaware Inc. and Precise Technology of Illinois
Inc. (collectively, the "Guarantors") pursuant to the Subsidiary Guarantees. The
Notes and the New Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "Subordinated Notes." All references to
Notes, New Notes and Subordinated Notes shall be deemed to include the
Subsidiary Guarantees related thereto.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Notes (and all securities issued in exchange
therefor or in substitution thereof) shall bear the following legend:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S. PERSON,
IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF
APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF
THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF THE ISSUER SO REQUESTS, AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT."
2. Offering. The Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements
under the Act. The Company has prepared a preliminary offering
memorandum, dated May 19, 1997 (the "Preliminary Offering
Memorandum"), and a final offering memorandum, dated June 10, 1997
(the "Offering Memorandum"), relating to the Company and the Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Notes on the
terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs"), (ii) a limited number of other
institutional "accredited investors," as defined in Rule 501(a) (1),
(2), (3) or (7) under the Act, that, prior to their purchase of the
Notes, deliver to the Initial Purchasers a letter containing the
representations and agreements set forth in Annex A to the Offering
Memorandum (each, an "Accredited Institution"), and (iii) to non-U.S.
persons permitted to purchase the Notes in offshore transactions in
reliance upon Regulation S under the Act (each, a "Regulation S
Purchaser") (such persons specified in clauses (i), (ii) and (iii)
being referred to herein as the "Eligible Purchasers"). The Initial
Purchasers will offer the Notes to Eligible
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Purchasers initially at a price equal to 100% of the principal amount thereof.
Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement relating
thereto (the "Registration Rights Agreement") in substantially the form of
Exhibit A hereto, to be dated the Closing Date, for so long as such Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
"Commission"), under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the 111/8% New Senior Subordinated Notes due 2007 (the "New Notes") to be
offered in exchange for the Notes (the "Exchange Offer") and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Notes,
and to use their best efforts to cause such Registration Statements to be
declared effective and to consummate the Exchange Offer. This Agreement, the
Subordinated Notes, the Subsidiary Guarantees, the Indenture and the
Registration Rights Agreement, are hereinafter sometimes referred to
collectively as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to the Initial Purchasers,
and the Initial Purchasers agree to purchase from the Company, $75,000,000
aggregate principal amount of Notes. The purchase price for the Notes will be
$970.00 per $1,000 principal amount thereof.
(b) Delivery of the Notes shall be made, against payment of the purchase
price therefor, at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 A.M. New York City time, on June 13,
1997, or at such other time as shall be agreed upon by the Initial Purchasers
and the Company. The time and date of such delivery and payment are herein
called the "Closing Date."
(c) Notes sold by the Initial Purchasers to QIBs, Accredited Institutions
and pursuant to Regulations S will be represented by separate Notes in
definitive global form, registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), each having an aggregate principal amount
corresponding to the aggregate principal amount of the Notes sold to such QIBs,
Accredited Institutions and pursuant to Regulations S (collectively, the "Global
Notes"). The Global Notes shall be delivered by the Company to the Initial
Purchasers (or as the Initial Purchasers direct) in each case with any transfer
taxes thereon duly paid by the Company against payment by the Initial Purchasers
of the purchase price thereof by wire transfer in same day funds to the order of
the Company. The Global Notes shall be made available to the Initial Purchasers
for inspection not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
4. Agreements of the Company and the Guarantors. Each of the Company and
the Guarantors, jointly and severally, covenants and agrees with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Subordinated Notes for
offering or sale in any jurisdiction, or the initiation of any proceeding
for such purpose by any state securities commission or other regulatory
authority and (ii) of the happening of any event that, in the reasonable
opinion of either counsel to the Company or counsel to the Initial
Purchasers, makes any statement of a material fact made in the Preliminary
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Offering Memorandum or the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The Company and the Guarantors shall use their best efforts to
prevent the issuance of any stop order or order suspending the
qualification or exemption of any Subordinated Notes under any state
securities or Blue Sky laws and, if at any time any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption of any Subordinated Notes under any state
securities or Blue Sky laws, the Company and the Guarantors shall use their
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company and the Guarantors consent to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum prior to the
Closing Date unless the Initial Purchasers shall previously have been
advised thereof and shall not have objected thereto within a reasonable
time after being furnished a copy thereof. The Company shall promptly
prepare, upon the Initial Purchasers' reasonable request, any amendment or
supplement to the Preliminary Offering Memorandum or the Offering
Memorandum that may be necessary or advisable in connection with Exempt
Resales.
(d) If, after the date hereof and prior to the consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment
of the Company or in the reasonable opinion of counsel for the Company or
counsel for the Initial Purchasers, it becomes necessary or advisable to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser which is a prospective purchaser, not
misleading, or if it is necessary or advisable to amend or supplement the
Offering Memorandum to comply with applicable law, (i) to notify the
Initial Purchasers (who will thereafter not use such Offering Memorandum to
confirm sales of the Notes until it is appropriately amended or
supplemented) and (ii) to prepare promptly an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein as so
amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that such Offering Memorandum will
comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of
the Subordinated Notes under the securities or Blue Sky laws of such
jurisdictions of the United States as the Initial Purchasers may reasonably
request and to continue such qualification in effect so long as required
for the Exempt Resales; provided, however, that neither the Company nor any
Guarantor shall be required in connection therewith to register or qualify
as a foreign corporation where it is not now so qualified or to take any
action that would subject it to service of process in suits or taxation, in
each case, other than as to matters and transactions relating to the
Offering Memorandum or Exempt Resales, in any jurisdiction where it is not
now so subject.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company and the Guarantors hereunder, including in
connection with: (i) the preparation, printing, filing and distribution of
the Preliminary Offering Memorandum and the Offering Memorandum (including,
without limitation,
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financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the qualification or registration of the Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the preparation and delivery of all
preliminary and final Blue Sky memoranda and all other agreements,
memoranda, correspondence and all other documents prepared and delivered in
connection herewith and with the Exempt Resales and the reasonable fees and
disbursements of counsel for the Initial Purchasers relating thereto
(provided that such fees and disbursements shall not exceed $10,000 in the
aggregate)), (iii) the preparation, issuance, transfer and delivery by the
Company of the Notes and the Guarantors of the Subsidiary Guarantees to the
Initial Purchasers, (iv) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with Exempt
Resales, (v) the fees, disbursements and expenses of the Company's and
Guarantors' counsel and accountants, (vi) all expenses and listing fees in
connection with the application for quotation of the Subordinated Notes in
the National Association of Securities Dealers, Inc. ("NASD") Private
Offering, Resales and Trading through Automated Linkages ("PORTAL") market,
(vii) all fees and expenses (including fees and expenses of counsel to the
Company) of the Company and the Guarantors in connection with the approval
of the Subordinated Notes by DTC for "book-entry" transfer, (viii) rating
the Subordinated Notes by rating agencies, (ix) the reasonable fees and
expenses of the Trustee and its counsel, (x) the performance by the Company
and the Guarantors of their other obligations under this Agreement and the
other Operative Documents and (xi) "roadshow" travel and other reasonable
expenses incurred in connection with the marketing and sale of the Notes
(other than customary expenses paid for by the Initial Purchasers).
(g) To use the proceeds from the sale of the Notes in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any
Subordinated Notes.
(i) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the
Subordinated Notes.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or the
Eligible Purchasers of the Notes or to take any other action that would
result in the Exempt Resales not being exempt from registration under the
Act.
(k) For so long as any of the Subordinated Notes remain outstanding
and during any period in which the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), upon request, to make available to any QIB or beneficial owner of
Notes in connection with any sale thereof and any prospective purchaser of
such Notes from such QIB or beneficial owner, the information required by
Rule 144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate form to
i permit registered New Notes to be offered in exchange for the Notes and
to comply with all applicable federal and state securities laws in
connection with the Exchange Offer, subject to the terms of the
Registration Rights Agreement.
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(m) To comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Subordinated Notes by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of the
Subordinated Notes in PORTAL and to obtain approval of the Notes by DTC for
"book-entry" transfer.
(o) For so long as any of the Subordinated Notes remain outstanding,
to deliver without charge to the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of all reports,
financial statements and proxy or information statements filed by the
Company with the Commission or any national securities exchange, all
publicly available information that the Company distributes to its public
stockholders and such other publicly available information concerning the
Company or its Subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared in the ordinary course by the Company,
copies of any unaudited interim financial statements for any period
subsequent to the periods covered by the financial statements appearing in
the Offering Memorandum.
(q) Not to take and not permit any of its Subsidiaries to take,
directly or indirectly, any action designed to, or that would reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Subordinated Notes. Except as permitted by the Act, the Company will not
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering memorandum,
including, without limitation, the Offering Memorandum, or (iii) other
offering material in connection with the offering and sale of the
Subordinated Notes.
(r) To comply with all of its agreements in the Indenture, the
Registration Rights Agreement and the other Operative Documents.
5. Representations and Warranties. (a) The Company and the Guarantors,
jointly and severally, represent and warrant to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering Memorandum have
been prepared in connection with the Exempt Resales. The Preliminary
Offering Memorandum, at the date thereof and at all time subsequent thereto
to the date hereof, and the Offering Memorandum as of the date hereof, do
not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties contained in this paragraph shall not apply to statements in
or omissions from the Preliminary Offering Memorandum and the Offering
Memorandum (or any supplement or amendment thereto) made in reliance upon
and in conformity with information relating to the Initial Purchasers
furnished to the Company, in writing, by the Initial Purchasers expressly
for use therein.
(ii) When the Notes are issued and delivered pursuant to this
Agreement, no Note will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or the Guarantors that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
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(iii) Each of the Company and its Subsidiaries (A) has been duly
organized and is validly existing as a corporation in good standing under
the laws of its respective jurisdiction of incorporation, (B) has all
requisite corporate power and authority to carry on its business as
described in the Offering Memorandum and to own, lease and operate its
properties, and (C) is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
reasonably be expected to (y) result in a material adverse effect on the
properties, business, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a
whole or (z) result in a material adverse affect on the ability of the
Company and the Guarantors to perform their respective obligations under
this Agreement and the other Operative Documents (any of the events set
forth in clauses (y) or (z), a "Material Adverse Effect").
(iv) All of the outstanding shares of capital stock of the Company and
each of its Subsidiaries have been duly authorized, validly issued, and are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights. On March 31, 1997, after giving pro forma
effect to the issuance and sale of the Notes pursuant hereto and the
consummation of the other Refinancing Transactions (as defined in the
Offering Memorandum) in the manner contemplated in the Offering Memorandum,
the Company would have had an authorized and outstanding consolidated
capitalization as set forth in the Offering Memorandum under the caption
"Capitalization."
(v) Except for capital stock of the Company's Subsidiaries pledged in
connection with the New Credit Agreement, (i) all of the outstanding
capital stock of each of the Company's Subsidiaries is owned by the
Company, directly or through another Subsidiary, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance
and (ii) there are not currently, and will not be as a result of the
Offering, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible into
or exchangeable for, any capital stock or other equity interest of the
Company or any of its Subsidiaries.
(vi) The Company has all 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 Subordinated Notes as provided herein and therein.
(vii) Each Guarantor has all requisite corporate power and authority
to execute, deliver and perform its respective 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 endorse
its guarantee on the Subordinated Notes as provided herein and therein.
(viii) This Agreement has been duly and validly authorized, executed
and delivered by each of the Company and the Guarantors and (assuming the
due authorization, execution and delivery by the Initial Purchasers) is a
valid and binding agreement of the Company and the Guarantors, enforceable
against them in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or other similar laws and court decisions
relating to or affecting the rights of creditors generally or by general
principles of equity, and except as rights to indemnification and
contribution may be limited by applicable law.
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(ix) The Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will be a valid and
binding agreement of the Company, enforceable against it in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or other
similar laws and court decisions relating to or affecting the rights of
creditors generally or by general principles of equity, and except as
rights to indemnification and contribution may be limited by applicable
law.
(x) The Notes have been duly and validly authorized for issuance and
sale to the Initial Purchasers by the Company pursuant to this Agreement
and, when executed, issued and authenticated in accordance with the terms
of the Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be valid and binding obligations of the
Company, enforceable against it in accordance with their terms and entitled
to the benefits of the Indenture, except as enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or other similar laws and court decisions relating to or
affecting the rights of creditors generally or by general principles of
equity, and except as rights to indemnification and contribution may be
limited by applicable law.
(xi) The New Notes have been duly and validly authorized for issuance
by the Company and, when executed, issued and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, will be valid and
binding obligations of the Company, enforceable against it in accordance
with their terms and entitled to the benefits of the Indenture, except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or other similar laws and court
decisions relating to or affecting the rights of creditors generally or by
general principles of equity, and except as rights to indemnification and
contribution may be limited by applicable law.
(xii) The Subsidiary Guarantees have been duly and validly authorized
by each of the Guarantors and, when executed, issued and authenticated in
accordance with the terms of the Indenture and when the Subordinated Notes
have been executed, issued, authenticated and delivered in accordance with
the terms thereof, will be valid and binding agreements of the Guarantors,
enforceable against them in accordance with their terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or other similar laws and court
decisions relating to or affecting the rights of creditors generally or by
general principles of equity, and except as rights to indemnification and
contribution may be limited by applicable law.
(xiii) No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming (A) that the purchasers who buy the Notes in
the Exempt Resales are Eligible Purchasers and (B) the accuracy of the
Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Notes to the Initial Purchasers
and the Exempt Resales contained herein. No form of general solicitation or
general advertising (as those terms are used in Regulation D under the Act)
was used by the Company, the Guarantors or any of their representatives
(other than the Initial Purchasers, as to which the Company and the
Guarantors make no representation or warranty) in connection with the offer
and sale of any of the Notes in connection with Exempt Resales, including,
but not limited to, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of the same
class as the Notes have been issued and sold by the Company or any of its
Subsidiaries within the six-month period immediately prior to the date
hereof.
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(xiv) The Registration Rights Agreement has been duly and validly
authorized by each of the Company and the Guarantors and, when duly
executed and delivered by each of the Company and the Guarantors (assuming
due authorization, execution and delivery thereof by the Initial
Purchasers), will be a valid and binding agreement of each of the Company
and the Guarantors, enforceable against them in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws and
court decisions relating to or affecting the rights of creditors generally
or by general principles of equity, and except as rights to indemnification
and contribution may be limited by applicable law.
(xv) The New Credit Agreement (as defined in the Offering Memorandum)
has been duly and validly authorized by each of the Company and its
Subsidiaries party thereto and, when duly executed and delivered by each of
the Company and its Subsidiaries party thereto (assuming the due
authorization, execution and delivery by the agent and the lenders party
thereto), will be a valid and binding agreement of each of the Company and
its Subsidiaries party thereto, enforceable against them in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or other
similar laws and court decisions relating to or affecting the rights of
creditors generally or by general principles of equity, and except as
rights to indemnification and contribution may be limited by applicable
law.
(xvi) The Amendment and Consent Agreement (the "Amendment and Consent
Agreement"), by and among the parties to the Warrant Agreement (as defined
in the Offering Memorandum) and the Shareholder Agreement (as defined in
the Offering Memorandum) has been duly and validly authorized, executed and
delivered by each of Parent (as defined in the Offering Memorandum) and the
Company and, (assuming the due authorization, execution and delivery by the
other parties thereto), is a valid and binding agreement of each of Parent
and the Company, enforceable against them in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws and
court decisions relating to or affecting the rights of creditors generally
or by general principles of equity, and except as rights to indemnification
and contribution may be limited by applicable law.
(xvii) The terms of Indenture, the Notes, the New Notes, the
Subsidiary Guarantees, the Registration Rights Agreement and the New Credit
Agreement, respectively, when executed and delivered, will conform in all
material respects to the descriptions thereof in the Offering Memorandum.
(xviii) None of (A) the execution, delivery or performance by the
Company and the Guarantors of this Agreement and the other Operative
Documents, (B) the issuance and sale of the Subordinated Notes and the
Subsidiary Guarantees by the Company and the Guarantors and (C) the
consummation by the Company and the Guarantors of the transactions
described in the Offering Memorandum under the caption "Use of Proceeds,"
violates, conflicts with or constitutes a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or requires consent
under (other than those as to which the requisite waivers or consents have
been obtained or will be obtained on or prior to the Closing Date by the
Company or any of its Subsidiaries), or results in the imposition of a lien
or encumbrance on any properties of the Company or any of its Subsidiaries
(except as contemplated by any of the Operative Documents or the New Credit
Agreement), or an acceleration of any indebtedness of the Company or any of
its Subsidiaries pursuant to (assuming compliance with all applicable state
securities or Blue Sky laws and assuming the accuracy of the
representations and
10
warranties of the Initial Purchasers in this Agreement), (1) the charter or
bylaws of the Company or any of its Subsidiaries, (2) any material
obligation, agreement, covenant or condition contained in any bond,
debenture, note, indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which any of them or their property is or may be bound
(except any such agreement or instrument that is terminated on or prior to
the Closing Date and after giving effect to any amendment of such agreement
or instrument on or prior to the Closing Date), (3) any statute, rule or
regulation applicable to the Company, the Guarantors or any Subsidiary
thereof or any of their assets or properties (whether owned or leased), or
(4) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company or any of its Subsidiaries
or any of their assets or properties, except for violations, conflicts,
breaches or defaults with respect to clauses (C)(2) through (C)(4) of this
paragraph that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Company and the Guarantors, there exists no condition that, with notice,
the passage of time or otherwise, would constitute a default under any such
agreement or instrument referred to in clause (C)(2), except for such
defaults that would not reasonably be expected to have a Material Adverse
Effect. No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with any court or
governmental agency, body or administrative agency having jurisdiction over
the Company, any of the Guarantors or any of their respective properties or
assets is required for (i) the execution, delivery and performance by the
Company and the Guarantors of this Agreement and the other Operative
Documents, (ii) the issuance and sale of the Subordinated Notes and the
Subsidiary Guarantees by the Company and the Guarantors and the
transactions contemplated hereby and thereby, or (iii) the consummation by
the Company and the Guarantors of the transactions described in the
Offering Memorandum under the caption "Use of Proceeds," except such as
have been obtained or made or will be obtained or made on or prior to the
Closing Date or (w) as may be required under state securities or Blue Sky
laws or the laws of any foreign jurisdiction in connection with the offer
and sale of the Subordinated Notes and the Subsidiary Guarantees, (x) as
may be required by the NASD, (y) in the case of the Registration Rights
Agreement and the transactions contemplated thereby, under the Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and (z)
as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(xix) There is (A) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries,
now pending or, to the best knowledge of the Company or any Subsidiary,
threatened to which the Company or any Subsidiary thereof is or may be a
party or to which the business or property of the Company or any Subsidiary
thereof is or may be subject, (B) no statute, rule, regulation or order
applicable to the Company or any Subsidiary or any of their respective
businesses or properties that has been enacted, adopted or issued by any
governmental agency or, to the knowledge of the Company, that has been
proposed by any governmental body or (C) no injunction, restraining order
or order by a federal or state court or foreign court of competent
jurisdiction to which the Company or any Subsidiary thereof is or may be
subject or to which the business, assets, or property of the Company or any
Subsidiary thereof are or may be subject, that, in the case of clauses (A),
(B) and (C) above, (1) would be required to be disclosed in the Preliminary
Offering Memorandum and the Offering Memorandum if each of such documents
were a prospectus under the Act and that is not so disclosed, or (2) would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(xx) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency that
has jurisdiction over the Company or any of its Subsidiaries that prohibits
the issuance of the Subordinated Notes or prohibits the use of the
11
Offering Memorandum; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has been
issued that prohibits the issuance of the Subordinated Notes or prohibits
the sale of the Subordinated Notes in any jurisdiction referred to in
Section 4(e) hereof.
(xxi) There is (A) no material unfair labor practice complaint pending
against the Company or any of its Subsidiaries or, to the best knowledge of
the Company and the Guarantors, threatened against any of them, before the
National Labor Relations Board, any state or local labor relations board or
any foreign labor relations board, and no material grievance or material
arbitration proceeding arising out of or under any collective bargaining
agreement is pending against the Company or any of its Subsidiaries or, to
the best knowledge of the Company and the Guarantors, threatened against
any of them, (B) no material strike, labor dispute, slowdown or stoppage
pending against the Company or any of its Subsidiaries or, to the best
knowledge of the Company and the Guarantors, threatened against any of them
and (C) to the best knowledge of the Company and the Guarantors, no union
representation question existing with respect to the employees of the
Company and its Subsidiaries which, in the case of clauses (A), (B) or (C),
would reasonably be expected to have a Material Adverse Effect. None of the
Company or any of its Subsidiaries has violated (A) any federal, state or
local law or foreign law relating to discrimination in hiring, promotion or
pay of employees applicable to the Company or any of its Subsidiaries, (B)
any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules
and regulations thereunder applicable to the Company or any of its
Subsidiaries, which, in the case of clauses (A), (B) or (C), would
reasonably be expected to have a Material Adverse Effect.
(xxii) None of the Company or any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") which would reasonably be expected to have a Material Adverse
Effect.
(xxiii) There is no liability, or to the best knowledge of the
Company, alleged potential liability, (including, without limitation,
alleged or potential liability or investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company or any of its Subsidiaries
arising out of, based on or resulting from (a) the presence or release into
the environment of any Hazardous Material (as defined herein) at any
location, whether or not owned by the Company or any of its Subsidiaries
which would reasonably be expected to have a Material Adverse Effect or (b)
any violation or alleged violation of any Environmental Law, which alleged
or potential liability would be required to be disclosed in the Offering
Memorandum if such document were a prospectus under the Act and that is not
so disclosed. The term "Hazardous Material" means (a) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (b) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (c) any petroleum or petroleum product, (d) any polychlorinated
biphenyl and (e) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material waste or substance regulated under or within the
meaning of any other Environmental Law.
(xxiv) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
their respective properties and to conduct their respective businesses in
the manner described in the Offering Memorandum, except for those permits
the absence of which would not reasonably be expected to have a Material
Adverse Effect; the Company and each of its Subsidiaries has
12
fulfilled and performed all of its obligations with respect to such
permits, except for such obligations the failure of which to be fulfilled
or performed would not reasonably be expected to have a Material Adverse
Effect, 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
for any such events that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect and, except as
described in the Offering Memorandum, such permits contain no restrictions
that are or will be materially burdensome to the Company or any of its
Subsidiaries.
(xxv) Each of the Company and its Subsidiaries has, (A) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except Permitted Liens (as defined in the
Offering Memorandum under "Description of Notes") and liens under
agreements that will be terminated on the Closing Date), (B) peaceful and
undisturbed possession under all material leases to which any of them is a
party as lessee and (C) all material licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all material declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts and other
tribunals (each an "Authorization") necessary to engage in the business
conducted by it in the manner described in the Offering Memorandum, except,
in the case of clauses (A), (B) and (C), for such exceptions which,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect. No proceeding has been instituted by any
governmental body or agency to limit, suspend or revoke any such
Authorization, except such proceedings which, individually, or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect. All such Authorizations are and, after giving effect to the
Refinancing Transactions, will be valid and in full force and effect and
the Company and its Subsidiaries are in compliance in all material respects
with the terms and conditions of all such Authorizations and with the rules
and regulations of the regulatory authorities having jurisdiction with
respect thereto, except for such noncompliances which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect. All material leases to which the Company or any of its Subsidiaries
is a party are valid and binding and no default by the Company or any of
its Subsidiaries has occurred and is continuing thereunder and, to the best
knowledge of the Company and the Guarantors, no defaults by the other
parties thereto are existing under any such lease that adversely affect the
Company's or any Guarantor's rights under such lease in any material
respect.
(xxvi) The material properties of the Company and its Subsidiaries are
in good repair (reasonable wear and tear excepted) and are suitable for
their uses, with such exceptions as would not reasonably be expected to
have a Material Adverse Effect.
(xxvii) The Company and each of its Subsidiaries owns, possesses or
has the right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property"), the absence of which would reasonably be expected
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing. The use of
the Company's material Intellectual Property in connection with the
business and operations of the Company and its Subsidiaries as it is now
conducted does not infringe on the rights of any person.
(xxviii) All tax returns required to be filed by the Company and
except where the failure to file such tax returns
13
would not reasonably be expected to have a Material Adverse Effect. All
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that
are due and payable have been paid, other than those for which the failure
to pay would not reasonably be expected to have an Material Adverse Effect
or that are being contested in good faith and for which adequate reserves
have been provided in accordance with generally accepted accounting
principles or those currently payable without penalty or interest. To the
knowledge of the Company and the Guarantors, there are no material proposed
additional tax assessments against the Company, any of its Subsidiaries or
the assets or property of the Company or any of its Subsidiaries.
(xxix) None of the Company or any of its Subsidiaries is an
"investment company" or a "promoter" or "principal" for an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxx) There are no holders of securities of the Company or any of its
Subsidiaries who, by reason of the execution by the Company and the
Guarantors of this Agreement or any other Operative Document or the
consummation of the transactions contemplated hereby and thereby, have the
right to request or demand that the Company or any of its Subsidiaries
register under the Act securities held by them.
(xxxi) Each of the Company and its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (a) transactions are executed in accordance with management's general
or specific authorizations; (b) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(c) access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxii) Each of the Company and its Subsidiaries maintains insurance
(including self-insurance) covering its properties, operations, personnel
and businesses and, in the reasonable judgment of the Company, such
insurance will insure against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
Subsidiaries and their respective businesses. None of the Company or any of
its Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance. All material insurance
policies will be outstanding and in full force and effect as of the Closing
Date.
(xxxiii) None of the Company or any Guarantor has (a) taken, directly
or indirectly, any action designed to, or that might reasonably be expected
to, cause or result in stabilization or manipulation of the price of any
security of the Company or any Guarantor to facilitate the sale or resale
of the Notes or (b) since the date of the Preliminary Offering Memorandum
(1) sold, bid for, purchased or paid any person any compensation for
soliciting purchases of the Notes or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company or any Guarantor, except as disclosed in the
Offering Memorandum.
(xxxiv) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes to be purchased by the
Eligible Purchasers will not involve any non-exempt prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986 on the part of the Company or any of its Subsidiaries.
The representation made by the Company and the Guarantors in the preceding
sentence is made in reliance upon and
14
subject to the accuracy of, and compliance with, the representations and
covenants made or deemed made by the Eligible Purchasers as set forth in
the Offering Memorandum under the caption "Notice to Investors."
(xxxv) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of
its date, contains the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
(xxxvi) Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as
disclosed in the Offering Memorandum, (a) none of the Company or any of its
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material, individually or in the aggregate, to the
Company and its Subsidiaries taken as a whole, nor entered into any
transaction not in the ordinary course of business, (b) there has not been,
singly or in the aggregate, any change or development which would
reasonably be expected have a Material Adverse Effect and (c) there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(xxxvii) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Subordinated Notes, the application
of the proceeds from the issuance and sale of the Subordinated Notes and
the consummation of the Refinancing Transactions as set forth in the
Offering Memorandum, will violate Regulations G, T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
(xxxviii) The Company has no direct or indirect Subsidiaries other
than the Guarantors.
(xxxix) To the best knowledge of the Company and the Guarantors, the
accountants who have certified or will certify the financial statements
included or to be included as part of the Offering Memorandum are
independent accountants. The historical financial statements of the Company
and its Subsidiaries comply as to form in all material respects with the
accounting requirements applicable to registration statements on Form S-1
under the Act and present fairly in all material respects the financial
position and results of operations of the Company and its Subsidiaries at
the dates and for the periods indicated. Such financial statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods presented. The pro
forma financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements, except for
the pro forma adjustments specified therein, and give effect to assumptions
made on a reasonable basis and present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement and the
other Operative Documents; and such pro forma financial statements comply
as to form in all material respects with the accounting requirements
applicable to registration statements on Form S-1 under the Act. In the
opinion of the Company and the Guarantors, the assumptions used in the
preparation of the pro forma financial statements are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. The other financial and statistical
information and data included in the Offering Memorandum, historical and
pro forma, are accurately presented in all material respects and were
prepared on a basis consistent with the financial statements, historical
and pro forma, included in the Offering Memorandum and the books and
records of the Company and the Guarantors.
(xl) The Company and the Guarantors do not intend to, nor do they
believe that they will, incur debts beyond their ability to pay such debts
as they mature. Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and the present
15
fair saleable value of the assets of the Company on a consolidated basis
will exceed the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent liabilities)
of the Company on a consolidated basis as they become absolute and matured.
Immediately after the consummation of the transactions contemplated by this
Agreement, the assets of the Company on a consolidated basis will not
constitute unreasonably small capital to carry out its businesses as it is
proposed to be conducted, including the capital needs of the Company on a
consolidated basis, taking into account the projected capital requirements
and capital availability.
(xli) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company and any other person or
between any Guarantor and any other person that would give rise to a valid
claim against the Company, any Guarantor or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Subordinated Notes.
(xlii) The Company and each of its Subsidiaries have complied with all
of the provisions of Florida H.B. 1771, codified as Section 517.075 of the
Florida statutes, and all regulations promulgated thereunder relating to
issuers doing business with the Government of Cuba or with any person or
any affiliate located in Cuba.
(xliii) Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Initial Purchasers or counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by
the Company or the Guarantor, as the case may be, to the Initial Purchasers
as to the matters covered thereby.
(xliv) Prior to the Exchange Offer or the effectiveness of the Shelf
Registration Statement, the Indenture is not required to be qualified under
the Trust Indenture Act.
(xlv) None of the Company, the Guarantors nor any of their respective
affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S with respect to the Notes or the
Subsidiary Guarantees.
The Company and the Guarantors acknowledge that each of the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Guarantors and counsel for the Initial Purchasers, will rely upon the accuracy
and truth of the foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers individually represents, warrants and
covenants to the Company and the Guarantors and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Notes with a view
to any distribution thereof that would violate the Act or the securities
laws of any state of the United States or any other applicable jurisdiction
and (B) will be reoffering and reselling the Notes only to (x) QIBs in
reliance on the exemption from the registration requirements of the Act
provided by Rule 144A, (y) not more than ten Accredited Institutions that
execute and deliver a letter containing certain representations and
agreements in the form attached as Annex A to the Offering Memorandum and
16
(z) persons other than U.S. persons (as such term is defined in Regulation
S) in offshore transactions in reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) nor any conduct constituting
a public offering within the meaning of Section 4(2) of the Act has been or
will be used by the Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Notes, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
(iv) Such Initial Purchaser agrees that, in connection with the Exempt
Resales, it will solicit offers to buy the Notes only from, and will offer
to sell the Notes only to, Eligible Purchasers. The Initial Purchaser
further agrees that it will offer to sell the Notes only to, and will
solicit offers to buy the Notes only from, (1)(A) QIBs who, in purchasing
the Notes will be deemed to have represented and agreed that (x) they are
purchasing the Notes for their own accounts or accounts with respect to
which they exercise sole investment discretion and that they or such
accounts are QIBs and (y) they acknowledge that the seller of such Notes
may be relying on the exemption from the provisions of Section 5 of the Act
provided by Rule 144A thereunder and that such Notes will not have been
registered under the Act, (B) Accredited Institutions who make the
representations contained in, and execute and return to the Initial
Purchaser, a certificate in the form of Annex A attached to the Offering
Memorandum and (C) Regulation S purchasers who, in purchasing the Notes
will be deemed to have represented and agreed that their purchase of Notes
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Act and (2) Eligible Purchasers that agree
that (x) Notes purchased by them may be resold, pledged or otherwise
transferred only (I) to a person whom the seller reasonably believes is a
QIB in a transaction meeting the requirements of Rule 144A under the Act,
(II) in a transaction meeting the requirements of Rule 144 under the Act,
(III) outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 of the Act, (IV) in accordance with
another exemption from the registration requirements of the Act (and based
upon an opinion of counsel acceptable to the Company), (V) to the Company
or (VI) pursuant to an effective registration statement and, in each case,
in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will
deliver to each person to whom such Notes or an interest therein is
transferred a notice substantially to the effect of the foregoing.
(v) None of such Initial Purchaser nor any of its affiliates or any
person acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to
the Notes or the Subsidiary Guarantees.
(vi) The Notes offered and sold by such Initial Purchaser pursuant
hereto in reliance on Regulation S have been and will be offered and sold
to persons who are not U.S. persons only in offshore transactions (as such
terms are defined in Regulation S).
(vii) The sale of the Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S is not part of a plan or scheme
to evade the registration provisions of the Act.
(viii) Such Initial Purchaser further represents and agrees that (1)
it has not offered or sold and will not offer or sell any Notes to persons
in the United Kingdom prior to the expiry of the period of six months from
the issue date of the Notes, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent)
17
for the purposes of their business or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995, (ii) it has complied and will comply with all applicable provisions
of the Financial Services Xxx 0000 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom
and (iii) it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with the
issuance of the Notes to a person who is of a kind described in Article
11(3) of the Financial Services Act of 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom the document may otherwise
lawfully be issued or passed on.
Each of the Initial Purchasers understands that the Company and the
Guarantors and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and counsel for
the Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each of the Initial Purchasers, (ii) each
person, if any, who controls either of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
(iii) the respective officers, directors, partners, employees,
representatives and agents of any of the Initial Purchasers or any
controlling person to the fullest extent lawful, from and against any and
all losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any investigation
or litigation, commenced or threatened, or any claim whatsoever, and any
and all amounts paid in settlement of any claim or litigation), to which
they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any
supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Company nor any Guarantor will be
liable in any such case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense (i) arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Initial Purchasers expressly for use therein or (ii) is
caused by an untrue statement or omission or alleged untrue statement or
omission that was contained or made in the Preliminary Offering Memorandum
and (1) any such loss, liability, claim, damage or expense suffered by any
indemnified party resulted from an action, claim, or suit by any person who
purchased Notes from the Initial Purchasers in the Offering, (2) the
Initial Purchasers failed to deliver or provide a copy of the Offering
Memorandum to such person at or prior to the confirmation of the sale of
such Notes, (3) the Company shall have previously furnished copies of the
Offering Memorandum to the Initial Purchasers and (4) the Offering
Memorandum (as so amended and supplemented) would have cured the defect
giving rise to such loss, liability, claim, damage or expense. This
indemnity agreement will be in addition to any liability which the Company
and the Guarantors may otherwise have, including under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly, agrees
to indemnify and hold harmless (i) each of the Company and the Guarantors,
(ii) each person, if any, who controls the
18
Company or any Guarantor within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (iii) their respective officers,
directors, partners, members, employees, representatives and agents or any
controlling person to the fullest extent lawful from and against any
losses, liabilities, claims, damages and expenses whatsoever (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred
in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any and
all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, 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 any such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Initial
Purchasers expressly for use therein; provided, however, that in no case
shall the Initial Purchasers be liable or responsible for any amount in
excess of the discounts and commissions received by the Initial Purchasers,
as set forth on the cover page of the Offering Memorandum. This indemnity
will be in addition to any liability which the Initial Purchasers may
otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 6 or
otherwise except to the extent that it has been prejudiced in any material
respect by such failure). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have been advised in writing by counsel
that there may be legal defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and
expenses of counsel shall be borne by the indemnifying parties; provided,
however, that the indemnifying party under subsection (a) or (b) above
shall only be liable for the legal expenses of one counsel (in addition to
any local counsel) for all indemnified parties in each jurisdiction in
which any claim or action is brought; provided, however, that the
indemnifying party shall be liable for separate counsel for any indemnified
party in a jurisdiction, if counsel to the indemnified party or parties
shall have reasonably concluded in writing that there may be defenses
available to such indemnified party that are different from or additional
to those
19
available to one or more of the other indemnified parties and that separate
counsel for such indemnified party is prudent under the circumstances.
Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or
action effected without its prior written consent; provided, however, that
such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 6 is for any reason held to be
unavailable to an indemnified party or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company or the
Guarantors, any contribution received by the Company or the Guarantors from
persons, other than the Initial Purchasers, who may also be liable for
contribution, including persons who control the Company or the Guarantors within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to
which the Company, the Guarantors and one or both of the Initial Purchasers may
be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on one hand, and the
Initial Purchasers, on the other hand, from the offering of the Notes or, if
such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Guarantors, on one hand, and the Initial Purchasers, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors, on one hand, and the Initial Purchasers, on the other hand,
shall be deemed to be in the same proportion as (i) the total proceeds from the
offering of Notes (net of discounts but before deducting expenses) received by
the Company and the Guarantors and (ii) the discounts received by the Initial
Purchasers, respectively, in each case as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on one hand, and of the Initial Purchasers, on the other hand, shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Guarantors
or the Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall either of the Initial
Purchasers be required to contribute any amount in excess of the amount by which
the discount applicable to the Notes purchased by such Initial Purchaser
pursuant to this Agreement exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls either of the Initial Purchasers within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of any of the Initial Purchasers or any controlling person shall have the same
rights to contribution as such Initial Purchaser, and each person, if any, who
controls the Company or any Guarantor within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as the Company or such Guarantor, subject in each case to clauses
(i) and (ii) of this Section 7. Any party entitled to contribution will,
promptly after receipt
20
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise (except to
the extent it has been prejudiced in any material respect by such failure). No
party shall be liable for contribution with respect to any action or claim
settled without its prior written consent; provided, however, that such written
consent was not unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The several obligations
of the Initial Purchasers to purchase and pay for the Notes, as provided herein,
shall be subject to the satisfaction or waivers of the following conditions:
(a) All of the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct in all
material respects on the date hereof and on the Closing Date with the same
force and effect as if made on and as of the date hereof and the Closing
Date, respectively. The Company and the Guarantors shall have performed or
complied in all material respects with all of the agreements herein
contained and required to be performed or complied with by it at or prior
to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies made
available to the Initial Purchasers not later than 12:00 p.m., New York
City time, on the day following the date of this Agreement or at such later
date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Notes in any jurisdiction referred to in Section 4(e) shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or, to the best knowledge of the Company, threatened.
(c) As of the Closing Date, no action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or
issued by any governmental agency which would, as of the Closing Date,
prohibit the issuance of the Notes; no action, suit or proceeding shall
have been commenced and be pending against or affecting or, to the best
knowledge of the Company and the Guarantors, threatened against, the
Company or any of the Guarantors before any court or arbitrator or any
governmental body, agency or official that, if adversely determined, would
reasonably be expected to have a Material Adverse Effect; and no stop order
shall have been issued preventing the use of the Offering Memorandum, or
any amendment or supplement thereto, or which would reasonably be expected
to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum and except as disclosed in the Offering Memorandum, (i) there
shall not have been any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the capital
stock or the long-term debt, or material increase in the short-term debt,
of the Company and the Guarantors from that set forth in the Offering
Memorandum, (ii) no dividend or distribution of any kind shall have been
declared, paid or made by the Company on any class of its capital stock,
and (iii) neither the Company nor any of its Subsidiaries shall have
incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company and its
Subsidiaries, taken as a whole, and that are required to be disclosed on a
balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or
notes thereto included in the Offering Memorandum. Since the date hereof
and since the dates as of which information is given in the Offering
Memorandum, there shall not have occurred any change in the properties,
business,
21
results of operations, condition (financial or otherwise), affairs or
prospects of the Company or the Guarantors which has had or would
reasonably be expected to have a Material Adverse Effect.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company and the Guarantors by the
Chief Executive Officer, President or any Vice President and the Controller
or other principal financial or accounting officer of the Company, in form
and substance reasonably satisfactory to the Initial Purchasers,
confirming, as of the Closing Date, (i) the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 8, (ii) each signer of such
certificate has examined the Offering Memorandum and the Offering
Memorandum does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and (iii) that, as of
the Closing Date, the obligations of the Company and the Guarantors to be
performed hereunder on or prior thereto have been duly performed in all
material respects.
(f) The Initial Purchasers shall have received on the Closing Date (i)
an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers, of Winston &
Xxxxxx, counsel for the Company and the Guarantors, to the effect set forth
in Exhibit B hereto (with customary exceptions and qualifications) and (ii)
copies of each opinion of counsel to the Company or the Guarantors, if any,
delivered in connection with the New Credit Agreement and the Amendment and
Consent Agreement, which opinions shall allow the Initial Purchasers to
rely thereon.
(g) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
(h) At the time this Agreement is executed and at the Closing Date,
the Initial Purchasers shall have received from Ernst & Young LLP,
independent public accountants for the Company, dated as of the date of
this Agreement and as of the Closing Date, customary comfort letters
addressed to the Initial Purchasers and in form and substance satisfactory
to the Initial Purchasers and counsel to the Initial Purchasers with
respect to the financial statements for the fiscal years ended December 31,
1994, December 31, 1995 and December 31, 1996 and certain other financial
information of the Company contained in the Offering Memorandum.
(i) Xxxxxx & Xxxxxxx shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(k) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Subsidiary Guarantees, as the case may be, and
the Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(l) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
22
(m) The Company and its Subsidiaries party thereto shall have entered
into the New Credit Agreement, in the form attached hereto as Exhibit C
(with such changes as the Initial Purchasers shall have agreed to in their
reasonable discretion), and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof and of all other documents and
agreements entered into in connection therewith.
(n) Each condition to the initial borrowing under the New Credit
Agreement (other than the issuance and sale of the Subordinated Notes
pursuant hereto) shall have been satisfied or waived. There shall exist at
and as of the Closing Date (after giving effect to the transactions
contemplated by this Agreement) no conditions that would constitute a
default (or an event that with notice or the lapse of time, or both, would
constitute a default) under the New Credit Agreement. At or prior to the
Closing Date, the closing under the New Credit Agreement shall have been
consummated on terms that conform in all material respects to the
description thereof in the Offering Memorandum and the Initial Purchasers
shall have received evidence satisfactory to the Initial Purchasers of the
consummation thereof.
(o) The Amendment and Consent Agreement, in form and substance
reasonably acceptable to the Initial Purchasers, shall have been executed
by all the parties thereto and shall have become effective, and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof
and of all other documents and agreements entered into in connection
therewith.
(p) Mentmore (as defined in the Offering Memorandum) and the Company
shall have entered into the Management Agreement (as defined in the
Offering Memorandum), in the form attached hereto as Exhibit D (with such
changes as the Initial Purchasers shall have agreed to in their reasonable
discretion), and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof and of all other documents and agreements
entered into in connection therewith.
(q) Parent, the Company and the other parties thereto shall have
entered into the First Amendment to Warrant Purchase Agreement, in the form
attached hereto as Exhibit E (with such changes as the Initial Purchasers
shall have agreed to in their reasonable discretion), and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof
and of all other documents and agreements entered into in connection
therewith.
(r) Parent, the Company and the other parties thereto shall have
entered into the First Amendment to Shareholder Agreement, in the form
attached hereto as Exhibit F (with such changes as the Initial Purchasers
shall have agreed to in their reasonable discretion), and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof
and of all other documents and agreements entered into in connection
therewith.
All opinions, certificates, letters and other documents required by this
Section 8 to be delivered by the Company and the Guarantors will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers. The Company and the Guarantors
will furnish the Initial Purchasers with such conformed copies of such opinions,
certificates, letters and other documents as they shall reasonably request.
9. Initial Purchasers' Information. The Company and the Guarantors
acknowledge that the statements with respect to the offering of the Notes set
forth in the last paragraph of the cover page, the first sentence of the third
paragraph, the sixth sentence of the fourth paragraph and the fifth paragraph
under the caption "Plan of Distribution" in such Offering Memorandum constitute
the only information furnished in writing by the Initial Purchasers expressly
for use in the Offering Memorandum.
23
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Guarantors contained in this Agreement, including the agreements contained
in Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and
the contribution agreements contained in Section 7, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Initial Purchasers, any controlling person thereof or by or on behalf of the
Company or any Guarantor or any controlling person thereof, and shall survive
delivery of and payment for the Notes to and by the Initial Purchasers. The
representations contained in Section 5 and the agreements contained in Sections
4(f), 6, 7 and 11(d) shall survive the termination of this Agreement, including
any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company or any
Guarantor if, on or prior to such date, (i) the Company or any Guarantor
shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed hereunder at or prior
thereto, (ii) any other condition to the obligations of the Initial
Purchasers hereunder as provided in Section 8 is not fulfilled when and as
required in any material respect (other than solely as a result of
nonfulfillment of the condition set forth in Section 8(g)), (iii) since the
date hereof, in the reasonable judgment of the Initial Purchasers, there
shall have occurred an event or development that has or would be reasonably
expected to have a Material Adverse Effect, other than as set forth in the
Offering Memorandum, or (iv)(A) any domestic or international event or act
or occurrence has materially disrupted, or in the reasonable opinion of the
Initial Purchasers will in the immediate future materially disrupt, the
market for the Company's securities or for securities in general; or (B)
trading in securities generally on the New York or American Stock Exchanges
shall have been suspended or materially limited, or minimum or maximum
prices for trading shall have been established, or maximum ranges for
prices for securities shall have been required, on such exchange, or by
such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange trading
by major international banks or persons shall have been declared; or (D)
there is an outbreak or escalation of armed hostilities involving the
United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect
of which shall be, in the Initial Purchasers' reasonable judgment, to make
it inadvisable or impracticable to proceed with the offering or delivery of
the Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse change in
general economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' reasonable judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Notes as
contemplated hereby.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to any of clauses (iii) or (iv)
of Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial
Purchasers set forth herein is
24
not satisfied (other than solely as a result of the nonfulfillment of the
condition set forth in Section 8(g)) or because of any refusal, inability
or failure on the part of the Company or any Guarantor to perform any
agreement herein or comply with any provision hereof, the Company and the
Guarantors will reimburse the Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and expenses of Initial Purchasers'
counsel), incurred by the Initial Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: High Yield Capital Markets, telecopy number: (212)
272-2725, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx, Esq., telecopy number (212)
751-4864; and if sent to the Company or any Guarantor, shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing to
Precise Technology, Inc., 000 Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Secretary, telecopy number: (000) 000-0000, with copies to
Mentmore Holdings Corporation, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
00000-0000, Attention: Xxxxxxx X. Xxxxxx, telecopy number (212) 391- 1393 and
Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
X. Xxxxxxx, Esq., telecopy number (000) 000-0000; provided, however, that any
notice pursuant to Section 7 shall be mailed, delivered or telexed, telegraphed
or telecopied and confirmed in writing.
13. Parties. This Agreement shall be binding upon the Initial Purchasers,
the Company, and the Guarantors and their respective successors and assigns.
This Agreement shall inure solely to the benefit of the Initial Purchasers, the
Company and the Guarantors and the controlling persons and agents referred to in
Sections 6 and 7, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Subordinated Notes from the Initial
Purchasers.
14. Construction. This Agreement shall be construed in accordance with the
internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
25
If the foregoing correctly sets forth the understanding among the Initial
Purchasers, the Company and the Guarantors please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between us.
Very truly yours,
PRECISE TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
PRECISE TMP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
XXXXXX TOOL, MOLD & DIE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
PRECISE POLESTAR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
PRECISE TECHNOLOGY OF DELAWARE INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By: /s/ J. Xxxxxx Xxxxx
----------------------------------
Name: J. Xxxxxx Xxxxx
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxx Xxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxx Xxxxxxxxx
Title: Authorized Signatory
