EXHIBIT 1.1
BDPI Holdings Corporation
$125,000,000
11% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
March 11, 1998
CHASE SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
c/o Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Pursuant to the Recapitalization Agreement dated as of October 14, 1997
(the "Recapitalization Agreement"), among BDPI Holdings Corporation, a Delaware
corporation (the "Company"), Xxxxxx, Inc., a New Jersey corporation ("Xxxxxx"),
and Xxxxxx Decorative Products Holdings, Inc., a Delaware corporation that
immediately following the consummation of the Recapitalization and the Imperial
Acquisition on the Closing Date (each as defined in the Offering Memorandum
referred to below) will change its name to The Imperial Home Decor Group Inc.
(the "Issuer"), on the Closing Date the Company will merge with the Issuer, with
the Issuer as the surviving corporation in the merger, and the other components
of the Recapitalization (as defined in the Offering Memorandum) will be
consummated. Pursuant to the Acquisition Agreement dated as of November 4, 1997
(the "Imperial Acquisition Agreement"), among Xxxxxxx & Xxxxxx Products Co., a
Delaware corporation ("CAPC"), Imperial Wallcoverings, Inc., a Delaware
corporation ("Imperial"), and the Company, the Company will acquire the U.S. and
Canadian Imperial Wallcoverings business of CAPC. In connection with the
foregoing, the Company proposes to issue and sell $125,000,000 aggregate
principal amount of its 11% Senior Subordinated Notes due 2008 (the
"Securities"). The Securities will be issued pursuant to an Indenture to be
dated as of March 13, 1998 (the "Indenture"), among the Issuer and each of the
subsidiaries of the Issuer on the Closing Date listed on Schedule I hereto
(collectively, the "Subsidiary Guarantors") and The Bank of New York, as trustee
(the "Trustee"), and will be guaranteed on an
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unsecured senior subordinated basis by the Subsidiary Guarantors. The Company
hereby confirms its agreement with Chase Securities Inc. ("CSI") and Bear,
Xxxxxxx & Co. Inc. (together with CSI, the "Initial Purchasers") concerning the
purchase of the Securities from the Company by the Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated February 24, 1998 (the "Preliminary
Offering Memorandum"), and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Issuer and the Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by the Company to
the Initial Purchasers pursuant to the terms of this Agreement. Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, unless otherwise
noted. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers in
accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Issuer will
agree to file with the Securities and Exchange Commission (the "Commission") (i)
a registration statement under the Securities Act (the "Exchange Offer
Registration Statement") registering an issue of senior subordinated notes of
the Issuer (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange Securities will not contain
terms with respect to transfer restrictions) and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement" and together with the
Exchange Offer Registration Statement, the "Registration Statements").
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with, the several Initial Purchasers on
and as of the date hereof and the Closing Date (as defined in Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not
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misleading; provided that the Company makes no representation or warranty
as to information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum in reliance upon and in conformity
with written information relating to the Initial Purchasers furnished to
the Company by or on behalf of any Initial Purchaser specifically for use
therein (the "Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all the information that,
if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or, prior to the
effectiveness of any Registration Statement, to qualify the Indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(d) The Company, the Issuer, Imperial, each of Imperial's subsidiaries
and each of the Issuer's subsidiaries have been duly incorporated and are
validly existing as corporations or limited liability companies in good
standing under the laws of their respective jurisdictions of organization,
are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure so to qualify or have such power
or authority would not, singularly or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Issuer, Imperial, Imperial's
subsidiaries and the Issuer's subsidiaries taken as a whole (a "Material
Adverse Effect").
(e) As of the Closing Date and after giving effect to the consummation
of the Transactions, all the outstanding shares of capital stock of the
Issuer will be duly and validly authorized and issued and will be fully
paid and non-assessable; and the capital stock of the Issuer will conform
in all material respects to the description thereof contained in the
Offering Memorandum. All of the outstanding shares of capital stock of each
subsidiary of the Issuer and each subsidiary of Imperial have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Issuer or Imperial, as the case may be,
free and
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clear of any lien, charge, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party, except that the
capital stock of Reebor Limited is 50% owned by the Issuer and 50% owned by
an unrelated party.
(f) The Company has full right, power and authority to execute and
deliver this Agreement, the Recapitalization Agreement and the Imperial
Acquisition Agreement and, as of the Closing Date, the Issuer and each of
the Subsidiary Guarantors will have full right, power and authority to
execute and deliver the Indenture, the Registration Rights Agreement, the
Letter Agreement (as defined in Section 5(r) below) (in the case of the
Issuer and the Subsidiary Guarantors), the Securities (in the case of the
Issuer only) and the Credit Agreement (all the foregoing are collectively
referred to herein as the "Transaction Documents") to which each is a party
and to perform their respective obligations hereunder and thereunder; and
all corporate or limited liability company action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby (i) have been duly and validly taken by the Company, and (ii) will
be duly and validly taken on the Closing Date by the Issuer and each of the
Subsidiary Guarantors.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of the
Company (and will be duly authorized by the Issuer and the Subsidiary
Guarantors and will be the valid and legally binding agreement of the
Issuer and the Subsidiary Guarantors upon the execution and delivery of the
Letter Agreement on the Closing Date).
(h) The Registration Rights Agreement will be duly authorized by the
Issuer and each of the Subsidiary Guarantors on the Closing Date and, when
duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of
the Issuer and each of the Subsidiary Guarantors enforceable against the
Issuer and each of the Subsidiary Guarantors in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law) and except to the extent that the indemnification and contribution
provisions thereof may be unenforceable.
(i) The Indenture will be duly authorized by the Issuer and each of
the Subsidiary Guarantors on the Closing Date and, when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Issuer and each of
the Subsidiary Guarantors enforceable against the Issuer and each of the
Subsidiary Guarantors in accordance with its terms, except to the extent
that such enforceability may be limited by
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applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
by general equitable principles (whether considered in a proceeding in
equity or at law). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture that is
qualified thereunder.
(j) The Securities will be duly authorized by the Issuer and each of
the Subsidiary Guarantors on the Closing Date and, when duly executed,
authenticated, issued and delivered as provided in the Indenture and paid
for as provided herein, will be duly and validly issued and outstanding and
will constitute valid and legally binding obligations of the Issuer, as
issuer, and each of the Subsidiary Guarantors, as guarantors, entitled to
the benefits of the Indenture and enforceable against the Issuer, as
issuer, and each of the Subsidiary Guarantors, as guarantors, in accordance
with their terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(k) The Letter Agreement will be duly authorized by the Issuer and
each of the Subsidiary Guarantors on the Closing Date and when duly
executed and delivered in accordance with the terms thereof, will
constitute the valid and legally binding agreement of the Issuer and each
of the Subsidiary Guarantors, enforceable against the Issuer and each of
the Subsidiary Guarantors in accordance with its terms, except to the
extent such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law) and
except to the extent that the indemnification and contribution provisions
thereof may be unenforceable.
(l) The Recapitalization Agreement has been duly authorized, executed
and delivered by the Company, the Issuer and Xxxxxx and constitutes the
valid and legally binding agreement of the Company, the Issuer and Xxxxxx,
enforceable against the Company, the Issuer and Xxxxxx in accordance with
its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
by general equitable principles (whether considered in a proceeding in
equity or at law).
(m) The Imperial Acquisition Agreement has been duly authorized,
executed and delivered by the Company, Imperial and CAPC and constitutes
the valid and legally binding agreement of the Company, Imperial and CAPC
in accordance with its terms, except to the extent that such enforceability
may be
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limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(n) The Credit Agreement will be duly executed by the Issuer and
certain of its subsidiaries on the Closing Date and, when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Issuer and such
subsidiaries, enforceable against the Issuer and such subsidiaries in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(o) Each Transaction Document conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(p) The execution, delivery and performance by the Company, the Issuer
and each of the Subsidiary Guarantors of each of the Transaction Documents
to which each is a party, the issuance, authentication, sale and delivery
of the Securities and compliance by the Issuer and each of the Subsidiary
Guarantors with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
(other than liens that secure obligations under the Credit Agreement and
the related guarantees), the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company, the Issuer, Imperial, any of
Imperial's subsidiaries or any of the Issuer's subsidiaries is a party or
by which the Company, the Issuer, Imperial, any of Imperial's subsidiaries
or any of the Issuer's subsidiaries is bound or to which any of the
property or assets of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries is subject except for such
conflicts, breaches, violations or defaults that would not have a Material
Adverse Effect or a material adverse effect on the ability of the Company,
the Issuer, Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries to perform their respective obligations under the Transactions
Documents to which they are a party, nor will such actions result in any
violation of the provisions of the charter or by-laws (or any comparable
organic documents) of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries or (assuming compliance
with all applicable state securities or "Blue Sky" laws and assuming the
accuracy of the representations and warranties of the Initial Purchasers
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in Section 2 hereof) any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries or any of their properties
or assets except for such violations (other than violations of the charter,
by-laws or any comparable organic documents of the Company, the Issuer,
Imperial, any of Imperial's subsidiaries or any of the Issuer's
Subsidiaries) that would not have a Material Adverse Effect or a material
adverse effect on the ability of the Company, the Issuer, Imperial, any of
Imperial's subsidiaries or any of the Issuer's subsidiaries to perform
their respective obligations under the Transaction Documents to which they
are a party; and no consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental agency
or body under any such statute, judgment, order, decree, rule or regulation
is required for the execution, delivery and performance by the Company, the
Issuer and each of the Subsidiary Guarantors of each of the Transaction
Documents to which each is a party, the issuance, authentication, sale and
delivery of the Securities and compliance by the Issuer and each of the
Subsidiary Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made prior to the
Closing Date, (ii) as may be required to be obtained or made under the
Securities Act and applicable state securities laws as provided in the
Registration Rights Agreement or under the TIA with respect to
qualification of the Indenture, (iii) required to be made pursuant to the
Credit Agreement or (iv) the failure of which to obtain would not restrain,
prevent or impose burdensome conditions on the transactions contemplated by
the Transaction Documents.
(q)(i) Deloitte & Touche LLP ("D&T") are independent certified public
accountants with respect to the Issuer and its subsidiaries and (ii) Xxxxxx
Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx") are independent certified public
accountants with respect to Imperial and its subsidiaries, in each case
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder. The historical financial statements
(including the related notes) contained in the Offering Memorandum have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present, in all material respects, the financial position of the entities
purported to be covered thereby at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated; and the historical financial information contained in the
Offering Memorandum under the headings "Capitalization", "Selected
Historical Financial Information-BDPH", "Selected Historical Financial
Information-Imperial" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" are derived from the
8
accounting records of the Issuer, Imperial, Imperial's subsidiaries and the
Issuer's subsidiaries, as the case may be, and fairly present the
information purported to be shown thereby. The pro forma financial
information contained in the Offering Memorandum has been prepared on a
basis consistent with the historical financial statements contained in the
Offering Memorandum (except for the pro forma adjustments specified therein
and except with respect to the treatment of sample book, design and
engraving costs and expenditures related to cylinder bases), includes all
material adjustments to the historical financial information required by
Rule 11-02 of Regulation S-X under the Securities Act and the Exchange Act
(other than as disclosed in the Offering Memorandum) to reflect the
transactions described in the Offering Memorandum, gives effect to
assumptions made on a reasonable basis and fairly presents the historical
and proposed transactions contemplated by the Offering Memorandum and the
Transaction Documents. The other historical financial and statistical
information and data included in the Offering Memorandum are, in all
material respects, fairly presented.
(r) There are no legal or governmental proceedings pending to which
the Company, the Issuer, Imperial, any of Imperial's subsidiaries or any of
the Issuer's subsidiaries is a party or of which any property or assets of
the Company, the Issuer, Imperial, any of Imperial's subsidiaries or any of
the Issuer's subsidiaries is the subject that, singularly or in the
aggregate, if determined adversely to the Company, the Issuer, Imperial,
any of Imperial's subsidiaries or any of the Issuer's subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of the Company, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(s) No action has been taken and no statute, rule, regulation or order
has been enacted, adopted or issued by any governmental agency or body that
prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or order
of any nature by any federal or state court of competent jurisdiction has
been issued with respect to the Company, the Issuer, Imperial, any of
Imperial's subsidiaries or any of the Issuer's subsidiaries that would
prevent or suspend the issuance or sale of the Securities or the use of the
Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to the
best knowledge of the Company, threatened against or affecting the Company,
the Issuer, Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries before any court or arbitrator or any governmental agency,
body or official, domestic or foreign, that could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or in any
manner draw into question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant thereto;
and the Company has no knowledge of any request by any securities authority
in any jurisdiction for additional information to be included in the
Preliminary Offering Memorandum and
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the Offering Memorandum.
(t) None of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries is (i) in violation of its
charter or by-laws (or other comparable organic documents), (ii) in default
in any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which it is a party or by which it is
bound or to which any of its property or assets is subject or (iii) in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject, other than, in the case of clause (ii) or (iii), such defaults or
violations that would not, singularly or in the aggregate, have a Material
Adverse Effect.
(u) The Company, the Issuer, Imperial, each of Imperial's subsidiaries
and each of the Issuer's subsidiaries possess all material licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies that are necessary for the ownership of their
respective properties or the conduct of their respective businesses as
described in the Offering Memorandum, except where the failure to possess
or make the same would not, singularly or in the aggregate, have a Material
Adverse Effect, and none of the Company, the Issuer, Imperial, Imperial's
subsidiaries or the Issuer's subsidiaries has received notification of any
revocation or modification of any such license, certificate, authorization
or permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course.
(v) The Issuer, Imperial, each of Imperial's subsidiaries and each of
the Issuer's subsidiaries have filed all federal, state, local and foreign
income and franchise tax returns required to be filed through the date
hereof and have paid all taxes due thereon, except taxes that are being
contested in good faith and for which adequate reserves have been made, and
no tax deficiency has been determined adversely to the Issuer, Imperial,
any of Imperial's subsidiaries or any of the Issuer's subsidiaries that has
had (nor does the Issuer, Imperial, any of Imperial's subsidiaries or any
of the Issuer's subsidiaries have any knowledge of any tax deficiency that,
if determined adversely to the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries, could reasonably be
expected to have) a Material Adverse Effect.
(w) None of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries is (i) an "investment
company" or a company "controlled by" an investment company within the
meaning of the Investment
10
Company Act of 1940, as amended (the "Investment Company Act"), and the
rules and regulations of the Commission thereunder or (ii) a "holding
company" or a "subsidiary company" of a holding company or an "affiliate"
thereof within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(x) The Issuer, Imperial, each of Imperial's subsidiaries and each of
the Issuer's subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(y) As of the Closing Date, the Issuer and each of its subsidiaries
will have insurance covering their respective properties, operations,
personnel and businesses, which insurance will be in amounts and will
insure against such losses and risks as are customary for similar
businesses or is required by law. None of the Issuer, Imperial, Imperial's
subsidiaries or the Issuer's subsidiaries has received notice from any
insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance.
(z) The Issuer, Imperial, each of Imperial's subsidiaries and each of
the Issuer's subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses; and
the conduct of their respective businesses will not conflict in any
material respect with, and the Issuer, Imperial, Imperial's subsidiaries
and the Issuer's subsidiaries have not received any notice of any claim of
conflict with, any such rights of others, except where such conflicts would
not, singularly or in the aggregate, have a Material Adverse Effect.
(aa) The Issuer, Imperial, each of Imperial's subsidiaries and each of
the Issuer's subsidiaries have good and marketable title in fee simple to,
or have valid rights to lease or otherwise use, all items of real and
personal property that are material to the business of the Issuer,
Imperial, Imperial's subsidiaries and the Issuer's subsidiaries, in each
case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except such as (i) do not materially interfere with
the use made and proposed to be made of such property by the Issuer,
Imperial, Imperial's
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subsidiaries and the Issuer's subsidiaries, (ii) are contemplated by the
Transaction Documents or (iii) could not reasonably be expected to have a
Material Adverse Effect.
(bb) No labor disturbance by or dispute with the employees of the
Issuer, Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries exists or is threatened that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(cc) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit plan
is in compliance in all material respects with applicable law, including
ERISA and the Code; the Issuer, Imperial, each of Imperial's subsidiaries
and each of the Issuer's subsidiaries have not incurred and do not expect
to incur liability under Title IV of ERISA with respect to the termination
of, or withdrawal from, any pension plan for which the Issuer, Imperial,
any of Imperial's subsidiaries or any of the Issuer's subsidiaries would
have any liability; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which could reasonably be expected to cause the loss of such qualification.
(dd) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of
toxic or other wastes or other hazardous substances by, due to or caused by
the Issuer, Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries (or, to the knowledge of the Issuer or Imperial, any other
entity (including any predecessor) for whose acts or omissions the Issuer,
Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries is or could reasonably be expected to be liable) upon any of
the property now or previously owned or leased by the Issuer, Imperial, any
of Imperial's subsidiaries or any of the Issuer's subsidiaries, or upon any
other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or that would, under any
statute or any ordinance, rule (including rule of common law), regulation,
order, judgment, decree or permit, give rise to any liability, except for
any violation or liability that could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material
12
Adverse Effect; and there has been no disposal, discharge, emission or
other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries has knowledge, except for
any such disposal, discharge, emission or other release of any kind which
could not reasonably be expected to have, singularly or in the aggregate
with all such discharges and other releases, a Material Adverse Effect.
(ee) None of the Issuer, Imperial, any of Imperial's subsidiaries or
any of the Issuer's subsidiaries, to the best knowledge of the Issuer,
Imperial, each of Imperial's subsidiaries and each of the Issuer's
subsidiaries, any director, officer, agent, employee or other person
associated with or acting on behalf of the Issuer, Imperial, any of
Imperial's subsidiaries or any of the Issuer's subsidiaries has (i) used
any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment, in each case that would, singularly or in the aggregate, result in
a Material Adverse Effect.
(ff) On and immediately after the Closing Date, the Issuer (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair market
value (or present fair saleable value) of the assets of the Issuer is not
less than the total amount required to pay the probable liabilities of the
Issuer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (ii) the Issuer is able
to realize upon its assets and pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in the
normal course of business, (iii) assuming the sale of the Securities as
contemplated by this Agreement and the Offering Memorandum, the Issuer is
not incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Issuer is not engaged in any business
or transaction, and is not about to engage in any business or transaction,
for which its property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in
which the Issuer is engaged. In computing the amount of such contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(gg) Except as described in the Offering Memorandum, as of the Closing
13
Date there will be no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any
shares of capital stock of or other equity or other ownership interest in
the Issuer or any of the Issuer's subsidiaries.
(hh) None of the Issuer, Imperial, any of Imperial's subsidiaries or
any of the Issuer's subsidiaries owns any "margin securities" as that term
is defined in Regulations G and U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds of
the sale of the Securities will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might
cause any of the Securities to be considered a "purpose credit" within the
meanings of Regulation G, T, U or X of the Federal Reserve Board.
(ii) None of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Issuer or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Securities.
(jj) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(kk) None of the Company, the Issuer, Imperial, any of their
respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers) has engaged or will engage in any directed
selling efforts (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons have complied and
will comply with the offering restrictions requirement of Regulation S to
the extent applicable.
(ll) None of the Company, the Issuer, Imperial or any of their
respective affiliates has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as such term is defined in the Securities Act), which is or will
be integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities Act.
(mm) Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Xxxxxxx 0, xxxx of the Company, the Issuer,
Imperial, any of their respective affiliates or any person acting on its or
their behalf has engaged, in connection with the offering of the
Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act.
14
(nn) There are no securities of the Issuer registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed
on a national securities exchange or quoted in a U.S. automated
inter-dealer quotation system.
(oo) None of the Company, the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries has taken or will take,
directly or indirectly, any action prohibited by Regulation M under the
Exchange Act in connection with the offering of the Securities.
(pp) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(qq) None of the Issuer, Imperial, any of Imperial's subsidiaries or
any of the Issuer's subsidiaries does business with the government of Cuba
or with any person or affiliate located in Cuba within the meaning of
Florida Statutes Section 517.075.
(rr) The Issuer, Imperial, Imperial's subsidiaries and the Issuer's
subsidiaries have implemented a program to analyze and address the risk
that their computer hardware and software may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem") and have
determined that their computer hardware and software will be able to
process all date information prior to and after December 31, 1999 without
any errors, aborts, delays or other interruptions in operations directly
resulting from the Year 2000 Problem.
(ss) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, management or business prospects of the Issuer,
Imperial, Imperial's subsidiaries and the Issuer's subsidiaries taken as a
whole, (ii) none of the Issuer, Imperial, any of Imperial's subsidiaries or
any of the Issuer's subsidiaries has incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of
business, (iii) none of the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries has entered into any
material transaction other than in the ordinary course of business and (iv)
there has not been any change in the capital stock or long-term debt of the
Issuer, Imperial, any of Imperial's subsidiaries or any of the Issuer's
subsidiaries, or any dividend or distribution of any kind declared, paid or
made by the Issuer, Imperial, any of Imperial's subsidiaries or any of the
Issuer's subsidiaries on any class of their respective capital stock.
15
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule II hereto at a purchase price equal to 97% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that they propose to
offer the Securities for resale upon the terms and subject to the conditions set
forth herein and in the Offering Memorandum. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees with the Company that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company that:
(i) the Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act.
(ii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act.
16
(iii) none of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restriction
requirements of Regulation S.
(iv) at or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company that (i) it has not offered or sold and
prior to the date six months after the Closing Date will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses 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 and the Public
Offers of Securities Regulations 1995 with respect to anything done by it in
relation to the Securities 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 issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(e) Each Initial Purchaser, severally and not jointly, agrees with the
Company
17
that, prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(f) The Company acknowledges and agrees that the Initial Purchasers may
sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser.
(g) The Initial Purchasers represent and agree that (i) they have not
solicited, and will not solicit, offers to purchase any of the Securities from,
(ii) they have not sold, and will not sell, any of the Securities to, and (iii)
they have not distributed, and will not distribute, the Offering Document to,
any person or entity in any jurisdiction outside of the United States except, in
each case in compliance in all material respects with all applicable laws. For
the purpose of this Agreement, "United States" means the United States of
America, its territories, its possessions and other areas subject to its
jurisdiction.
3. Delivery of and Payment for the Securities. (a) Delivery of and payment
for the Securities shall be made at the offices of Xxxxx, Day, Xxxxxx & Xxxxx,
New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Company, at 10:00 A.M., New York City time, on March
13, 1998, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchasers and the Company
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the Securities
shall be made to the Company by wire or book-entry transfer of same-day funds to
such account or accounts as the Company shall specify prior to the Closing Date
or by such other means as the parties hereto shall agree prior to the Closing
Date against delivery to the Initial Purchasers of the certificates evidencing
the Securities. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Initial Purchasers hereunder. Upon delivery, the Securities shall be in
global form, registered in such names and in such denominations as CSI on behalf
of the Initial Purchasers shall have requested in writing not less than two full
business days prior to the Closing Date. The Company agrees to make one or more
global certificates evidencing the Securities available for inspection by CSI on
behalf of the Initial Purchasers
18
in New York, New York at least 12 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with each of the
several Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchasers promptly after
it becomes aware of any order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale in
any jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its reasonable best efforts to prevent the
issuance of any such order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum or suspending
any such qualification and, if any such suspension is issued, to use its
reasonable best efforts to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
19
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and prospective purchasers of the Securities
designated by such holders);
(f) for so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall be
furnished by the Company to the Trustee or to the holders of the Securities
pursuant to the Indenture or the Exchange Act or any rule or regulation of
the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Company, the Issuer and the
Issuer's subsidiaries shall not be obligated to qualify as foreign
corporations or limited liability companies in any jurisdiction in which
they are not so qualified or to file a general consent to service of
process in any jurisdiction;
(h) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) that could be integrated
with the sale of the Securities in a manner that would require registration
of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration
20
Statement or the Shelf Registration Statement, as the case may be, not to,
and to cause its affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or
offer to sell the Securities by means of any form of general solicitation
or general advertising within the meaning of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act; and not to offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any securities under circumstances
where such offer, sale, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act to cease to be applicable to
the offering and sale of the Securities as contemplated by this Agreement
and the Offering Memorandum;
(k) for a period of 240 days from the date of the Offering Memorandum,
not to offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Issuer, Imperial, any of Imperial's
subsidiaries or any of the Issuer's subsidiaries (other than the Securities
or the Exchange Notes (as defined in the Registration Rights Agreement))
(collectively, the "Sale of Securities") if, not later than five Business
Days (as defined in the Offering Memorandum) following the receipt of
written notice from the Issuer of a proposed Sale of Securities, the
Initial Purchasers notify the Issuer that in their reasonable judgment such
Sale of Securities would impair their ability to market the Securities.
(l) during the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchasers,
not to, and not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Company or any
of its affiliates and resold in a transaction registered under the
Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI on
behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
21
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities, except, in each case, as permitted by Regulation M under the
Exchange Act;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to, on or after
the Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(r) to not take any action prior to the execution and delivery of the
Indenture that, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture;
(s) prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing
communications in the ordinary course of business and consistent with the
past practices of the Company and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers,
unless in the judgment of the Company and its counsel, and after
notification to the Initial Purchasers, such press release or communication
is required by law; and
(t) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy in all material respects, on and as of the date hereof and the Closing
Date, of the representations and warranties of the Company contained herein and
of the Issuer and the Subsidiary Guarantors contained in the Letter Agreement,
to the accuracy of the statements of the Issuer and each of the Subsidiary
Guarantors and their respective officers made in any certificates delivered
pursuant hereto, to the performance by the Company of its obligations hereunder,
and to each of the following additional terms and conditions:
22
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and disclosed
to the Company on or prior to the Closing Date that the Offering Memorandum
or any amendment or supplement thereto contains an untrue statement of a
fact that, in the opinion of counsel for the Initial Purchasers, is
material or omits to state any fact which, in the opinion of such counsel,
is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the Initial Purchasers,
and the Company, the Issuer and the Subsidiary Guarantors shall have
furnished to the Initial Purchasers and their counsel all documents and
information that they or their counsel may reasonably request to enable
them to pass upon such matters.
(d) Xxxxx, Day, Xxxxxx & Xxxxx shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, the Issuer and
the Subsidiary Guarantors, addressed to the Initial Purchasers and dated
the Closing Date, in form and substance to be agreed upon.
(e) The Initial Purchasers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchasers
may reasonably require, and the Company shall have furnished to such
counsel such documents and information as they reasonably request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchasers a
letter (each, an "Initial Letter") of each of D&T and Xxxxxx Xxxxxxxx,
addressed to the Initial Purchasers and dated the date hereof, in form and
substance satisfactory to the Initial Purchasers, substantially to the
effect set forth in Annex B-1 and B-2, respectively, hereto.
23
(g) The Company shall have furnished to the Initial Purchasers (i) a
letter (the "D&T Bring-Down Letter") of D&T and (ii) a letter (the "Xxxxxx
Xxxxxxxx Bring- Down Letter" and, together with the D&T Bring-Down Letter,
the "Bring-Down Letters") of Xxxxxx Xxxxxxxx, in each case, addressed to
the Initial Purchasers and dated the Closing Date (i) confirming that
before giving effect to the Recapitalization and the Imperial Acquisition
(A) in the case of D&T, they are independent public accountants with
respect to the Issuer and its subsidiaries and (B) in the case of Xxxxxx
Xxxxxxxx, they are independent public accountants with respect to Imperial
and its subsidiaries, in each case within the meaning of Rule 101 of the
Code of Professional Conduct of the AICPA and its interpretations and
rulings thereunder, (ii) stating, as of the date of the Bring-Down Letters
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Offering Memorandum, as of a date not more than three business days
prior to the date of the Bring-Down Letters), that the conclusions and
findings of such accountants with respect to the financial information and
other matters covered by the Initial Letter furnished by D&T or Xxxxxx
Xxxxxxxx, as the case may be, are accurate and (iii) confirming in all
material respects the conclusions and findings set forth in such Initial
Letter.
(h) The Issuer shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of its chief executive officer and
chief financial officer stating that (A) such officers have carefully
examined the Offering Memorandum, (B) in their opinion, the Offering
Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
since the date of the Offering Memorandum, no event has occurred that
should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and would not
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (C) as of the Closing Date, the
representations and warranties of the Company in this Agreement are true
and correct in all material respects, the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder on or prior to the Closing Date, (D) as of the Closing
Date, the representations and warranties of the Issuer and the Subsidiary
Guarantors in the Letter Agreement are true and correct in all material
respects, the Issuer and the Subsidiary Guarantors have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied thereunder on or prior to the Closing Date and (E) subsequent to
the date of the most recent financial statements contained in the Offering
Memorandum, there has been no material adverse change in the financial
position or results of operation of the Issuer, Imperial or any of their
respective subsidiaries, or
24
any change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of operations,
business or prospects of the Issuer, Imperial and their respective
subsidiaries taken as a whole.
(i) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Issuer and each Subsidiary Guarantor.
(j) The Indenture shall have been duly executed and delivered by the
Issuer, the Subsidiary Guarantors and the Trustee, and the Securities shall
have been duly executed and delivered by the Issuer and duly authenticated
by the Trustee.
(k) The Securities shall have been approved by the NASD for trading in
the PORTAL Market.
(l) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the extent
practicable to the Initial Purchasers reasonably in advance of the Closing
Date.
(m) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
that in the reasonable judgment of the Initial Purchasers would materially
impair the ability of the Initial Purchasers to purchase, hold or effect
resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Issuer, Imperial, Imperial's subsidiaries and the Issuer's
subsidiaries taken as a whole, the effect of which, in any such case
described above, is, in the reasonable judgment of the Initial Purchasers,
so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum
(exclusive of any amendment or supplement thereto).
25
(o) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body that would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities or
any of the Issuer's other debt securities or preferred stock by any
"nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review (other than an announcement with positive implications of a
possible upgrading), its rating of the Securities or any of the Issuer's
other debt securities or preferred stock.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Issuer on any exchange or in the over-the-counter market shall have
been suspended or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York state authorities or (iii)
an outbreak or escalation of hostilities involving the U.S. or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in the
case of this clause (iv), is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or the delivery of the Securities on the terms and in the
manner contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(r) Substantially simultaneously with the sale of the Securities
hereunder (i) the Recapitalization shall have been consummated on the terms
described in the Offering Memorandum, (ii) the Imperial Acquisition shall
have been consummated on the terms described in the Offering Memorandum,
(iii) the Credit Agreement shall have been executed and delivered and the
initial borrowings thereunder shall have been made and (iv) the Initial
Purchasers shall have received counterparts of an agreement in the form of
Annex C hereto (the "Letter Agreement") that shall have
26
been executed and delivered by a duly authorized officer of the Issuer and
each Subsidiary Guarantor, whereby, among other things, the Issuer and each
Subsidiary Guarantor will become party to this Agreement and be subject to
the obligations and entitled to the rights and benefits of the Company
under this Agreement, including, but not limited to, those set forth under
Sections 2, 4, 8, 9, 10, 11, 12 and 13 hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers, in their absolute discretion, by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(m),
(n), (o), (p) or (q) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the non-defaulting Initial Purchasers may make arrangements for the purchase of
the Securities (the "Unpurchased Securities") which such defaulting Initial
Purchaser agreed but failed to purchase by other persons satisfactory to the
Company and the non-defaulting Initial Purchasers, but if no such arrangements
are made within 36 hours after such default, then the Issuer shall be entitled
to a further period of 36 hours within which to procure another party or parties
reasonably satisfactory to the non-defaulting Initial Purchaser to purchase such
Unpurchased Securities upon such terms herein set forth. If, however, the
non-defaulting Initial Purchaser shall not have completed such arrangements
within 36 hours after such default or the Issuer has not completed such
arrangements within 72 hours after such default, as the case may be, then this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers or the Company, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 12
and except that the provisions of Sections 9 and 10 shall not terminate and
shall remain in effect. As used in this Agreement, the term "Initial Purchasers"
includes, for all purposes of this Agreement unless the context otherwise
requires, any party not listed in Schedule II hereto that, pursuant to this
Section 7, purchases Securities which a defaulting Initial Purchaser agreed but
failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company or any non-defaulting Initial
Purchaser for damages caused by its default. If other persons are obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to seven full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the
27
Company agrees promptly to prepare any amendment or supplement to the Offering
Memorandum that effects any such changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this Agreement
shall have been terminated in accordance with Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchasers for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase and resale of the Securities. If
this Agreement is terminated pursuant to Section 7 by reason of the default of
one or more of the Initial Purchasers, the Company shall not be obligated to
reimburse any defaulting Initial Purchaser on account of such expenses.
9. Indemnification. (a) The Company shall indemnify and hold harmless each
Initial Purchaser, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 9(a) and Section 10 as an
Initial Purchaser), from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which that Initial Purchaser may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) 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 or supplement thereto or in any information provided by the
Company pursuant to Section 4(e) or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Initial Purchaser
promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser in connection with investigating or defending or preparing to
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any Initial Purchasers' Information; and provided, further, that with
respect to any such untrue statement in or omission from the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of any such Initial Purchaser to the extent that
the sale to the person asserting any such loss, claim, damage, liability or
action was an
28
initial resale by such Initial Purchaser and any such loss, claim, damage,
liability or action of or with respect to such Initial Purchaser results from
the fact that both (A) to the extent required by applicable law, a copy of the
Offering Memorandum was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person and (B) the
untrue statement in or omission from the Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, such failure to deliver the
Offering Memorandum was a result of non-compliance by the Company with Section
4(b).
(b) Each Initial Purchaser, severally and not jointly, shall indemnify and
hold harmless the Company, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 9(b) and Section 10 as
the Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) 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 or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any Initial
Purchasers' Information, and shall reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 9(a) or 9(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have under this Section 9 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its
29
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that an indemnified party shall have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
reasonably could be expected to be a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Company and the Initial Purchasers in this Section 9
and in Section 10 are in addition to any other liability that the Company or the
Initial Purchasers, as the case may be, may otherwise have, including in respect
of any breaches of representations, warranties and agreements made herein by any
such party.
10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b)
30
otherwise than as a result of the limitations therein contained, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Company,
on the one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault 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 the
Company or information supplied by the Company on the one hand or to any Initial
Purchasers' Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this
Section 10 were to be determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes of
this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
10, no Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total discounts and commissions received by such Initial
Purchaser with respect to the Securities purchased by it under this Agreement
exceeds the amount of any damages which such Initial Purchaser has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 10 are several in proportion to their respective
purchase obligations and not joint.
31
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Initial Purchasers, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except as provided in Sections 9 and
10 with respect to affiliates, officers, directors, employees, representatives,
agents and controlling persons of the Company and the Initial Purchasers and in
Section 4(e) with respect to holders and prospective purchasers of the
Securities. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Expenses. The Company agrees with the Initial Purchasers to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Securities to the Initial Purchasers and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements thereto; (c) the costs of reproducing and distributing
each of the Transaction Documents; (d) the costs incident to the preparation,
printing and delivery of the certificates evidencing the Securities, including
stamp duties and transfer taxes, if any, payable upon issuance of the Securities
to the Initial Purchasers; (e) the fees and expenses of the Company's counsel
and independent accountants; (f) the fees and expenses of qualifying the
Securities under the securities laws of the several jurisdictions as provided in
Section 4(h) and of preparing, printing and distributing Blue Sky Memoranda
(including related fees and expenses of counsel for the Initial Purchasers) as
herein provided; (g) any fees charged by rating agencies for rating the
Securities; (h) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties) in
connection with the Indenture and the Securities ; (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement which are not
otherwise specifically provided for in this Section 12; provided, however, that
except as provided in this Section 12 and Section 8, the Initial Purchasers
shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company or
the Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancelation of this Agreement (except as provided in Sections 7 and 8) or any
investigation made by or on behalf of any of them or any of their respective
affiliates, officers, directors, employees, representatives, agents or
controlling persons.
32
14. Notices, etc.. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxx X. Xxxxx (telecopier no.: (212)
270-0994); or
(b) if to the Company, shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Offering
Memorandum, Attention: Xx. Xxxx Xxxxxxxxxxxx (telecopier no.: (216)
765-8677) with a copy to Mr. Xxxxx Xxxxxxx, The Blackstone Group, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telecopier no.: (000) 000-0000);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Initial Purchasers' Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchasers;
(ii) the legend on the inside front cover page concerning over-allotment and
trading activities by the Initial Purchasers; and (iii) the statements
concerning the Initial Purchasers contained in the third, fourth, fifth,
seventh, ninth, twelfth and thirteenth paragraphs under the heading "Plan of
Distribution".
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
33
19. Amendments. No amendment or waiver of any provision of this Agreement,
nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
20. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
34
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the several Initial
Purchasers in accordance with its terms.
Very truly yours,
BDPI HOLDINGS CORPORATION,
By______________________________
Name:
Title:
Accepted:
CHASE SECURITIES INC.
By____________________________
Authorized Signatory
Address for notices pursuant to Section 9(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
BEAR, XXXXXXX & CO. INC.,
By____________________________
Authorized Signatory
Address for notices pursuant to Section 9(c):
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
SCHEDULE I
Subsidiary Guarantors
The Imperial Home Decor Group (US) LLC
Marketing Service, Inc.
Xxxxxx Plastics, Inc.
WDP Investments, Inc.
Imperial Home Decor Group Holdings I Limited
SCHEDULE II
Principal Amount
Initial Purchasers of Securities
------------------ -------------
Chase Securities $ 93,750,000
Bear, Xxxxxxx & Co. Inc. 31,250,000
------------
Total $125,000,000
------------
ANNEX A
[Form of Exchange and Registration Rights Agreement]
ANNEX C
March 13, 1998
CHASE SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
c/o Chase Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Reference is hereby made to the Purchase Agreement dated March 11, 1998
(the "Purchase Agreement"), among BDPI Holdings Corporation, a Delaware
corporation (the "Company"), and each of you pursuant to which the Company has
agreed to issue and sell and each of you have agreed to purchase the Securities
described therein on the terms set forth therein. Capitalized terms used herein
but not otherwise defined herein have meanings assigned thereto in the Purchase
Agreement (including by reference therein to the Offering Memorandum). This is
the letter agreement referred to in Section 5(r) of the Purchase Agreement.
The parties hereto agree that this Letter Agreement is being executed and
delivered in connection with the issue and sale of the Securities pursuant to
the Purchase Agreement, in order to confirm the obligations of The Imperial Home
Decor Group Inc., a Delaware corporation formerly known as Xxxxxx Decorative
Products Holdings, Inc. (the "Issuer"), and each of the Subsidiary Guarantors
identified on Schedule I thereto, with respect to the Purchase Agreement and the
Securities after the consummation of the Recapitalization and the Imperial
Acquisition and to induce each of the Initial Purchasers to purchase the
Securities thereunder.
The Issuer and the Subsidiary Guarantors hereby confirm their agreement
with each of you as follows:
SECTION 1. In accordance with Section 5(r) of the Purchase Agreement, the
Issuer and the Subsidiary Guarantors by their respective signatures below each
hereby become a party to the Purchase Agreement with the same force and effect
as if originally named therein as a party and the Issuer and the Subsidiary
Guarantors hereby agree to become bound by and become entitled to the rights and
benefits afforded by all the terms and provisions of the Purchase Agreement
applicable to the Company thereunder including, but not limited to, under
Sections 2, 4, 8, 9, 10, 11, 12 and 13 thereof.
SECTION 2. The Issuer and the Subsidiary Guarantors hereby represent and
warrant to, and agree with each of you as of the date hereof that:
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(a) the Issuer and each of the Subsidiary Guarantors have full right,
power and authority to execute and deliver this Letter Agreement and
perform their respective obligations hereunder and all corporate or limited
liability company action required to be taken by each of them for the due
and proper authorization, execution, delivery and performance of this
Letter Agreement and the consummation of the transactions contemplated
hereby has been duly and validly taken and this Letter Agreement has been
duly authorized and validly executed and delivered by the Issuer and each
of the Subsidiary Guarantors and is the valid and legally binding agreement
of the Issuer and each of the Subsidiary Guarantors enforceable against the
Issuer and each of the Subsidiary Guarantors in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
except to the extent that the indemnification and contribution provisions
thereof may be unenforceable; and
(b) the representations, warranties and agreements as to the Issuer
and the Subsidiary Guarantors set forth in Section 1 of the Purchase
Agreement are true and accurate in all material respects on the date hereof
and each reference therein to the knowledge of the Company shall be deemed
to be a reference to the knowledge of the Issuer and the Subsidiary
Guarantors, as the case may be.
SECTION 3. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 4. This Letter Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
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SECTION 5. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Letter Agreement.
Very truly yours,
THE IMPERIAL HOME DECOR GROUP
INC.
By ______________________
Name:
Title:
THE IMPERIAL HOME DECOR GROUP
(US) LLC,
By ______________________
Name:
Title:
MARKETING SERVICE, INC.,
By ______________________
Name:
Title:
XXXXXX PLASTICS, INC.,
By ______________________
Name:
Title:
WDP INVESTMENTS, INC.,
By ______________________
Name:
Title:
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IMPERIAL HOME DECOR GROUP
HOLDINGS I LIMITED,
By ______________________
Name:
Title:
