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Exhibit 1
Pen Holdings, Inc.
$100,000,000
9-7/8% Senior Notes due 2008
PURCHASE AGREEMENT
June 3, 1998
CIBC XXXXXXXXXXX CORP.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Pen Holdings, Inc., a Tennessee corporation (the "Company"), and each
of the Company's subsidiaries set forth on the signature pages hereto (each, a
"Guarantor" and, collectively, the "Guarantors" and, together with the Company,
the "Issuers") hereby confirm their agreement with you (the "Initial
Purchaser"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$100,000,000 aggregate principal amount of its 9-7/8% Senior Notes due 2008 (the
"Notes"). The obligations of the Company under the Indenture (defined below) and
the Notes will be unconditionally guaranteed (the "Guarantees"), on a joint and
several basis, by each Guarantor. The Notes and the Guarantees are to be issued
pursuant to the Indenture (the "Indenture"), dated as of June 8, 1998 among the
Company, the Guarantors and the Bank of New York, as trustee (the "Trustee").
The Notes and the Guarantees are hereinafter referred to collectively as the
"Securities."
The Notes will be offered and sold to the Initial Purchaser without
such offers and sales being registered under the Securities Act of 1933, as
amended (together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the "Securities Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated May 11, 1998 (including the documents
annexed thereto, the "Preliminary Memorandum") and a final offering memorandum
dated June 3, 1998
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(including the documents annexed thereto, the "Final Memorandum"; the
Preliminary Memorandum and the Final Memorandum each herein being referred to as
a "Memorandum"), each setting forth or including a description of the terms of
the Securities, the terms of the offering of the Notes, a description of the
Company and its subsidiaries and any material developments relating to the
Company and its subsidiaries occurring after the date of the most recent
historical financial statements included therein. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in any Memorandum (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and in any Memorandum.
The Company and the Guarantors understand that the Initial Purchaser
proposes to make an offering of the Notes only on the terms and in the manner
set forth in the Memorandum and Section 9 hereof as soon as the Initial
Purchaser deems advisable after this Agreement has been executed and delivered,
to persons in the United States whom the Initial Purchaser reasonably believes
to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the
Securities Act, as such rule may be amended from time to time ("Rule 144A"), in
transactions under Rule 144A, and outside the United States to certain persons
in reliance on Regulation S under the Securities Act.
The Initial Purchaser and its direct and indirect transferees of the
Notes will be entitled to the benefits of the Registration Rights Agreement
dated as of June 8, 1998 among the parties hereto (the "Registration Rights
Agreement") pursuant to which the Issuers have agreed, among other things, to
file (i) a registration statement (the "Registration Statement") with the
Commission registering the Notes or the Exchange Notes (as defined in the
Registration Rights Agreement) under the Securities Act or (ii) a shelf
registration statement pursuant to Rule 415 under the Securities Act relating to
the resale of the Notes by holders thereof or, if applicable, relating to the
resale of Private Exchange Notes (as defined in the Registration Rights
Agreement) by the Initial Purchaser pursuant to an exchange of the Notes for
Private Exchange Notes.
The Securities, the Exchange Notes, the Private Exchange Notes, the
Indenture, the Registration Rights Agreement and this Agreement are herein
collectively referred to as the "Basic Documents". The Issuers propose to issue
the Securities contemporaneously with (i) the repayment of $62.7 million of
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indebtedness outstanding at March 31, 1998 under the Credit Agreement, dated as
of August 16, 1994, by and between the Company's and certain of its subsidiaries
and Mellon Bank, N.A., as agent, and the lenders named therein, as amended (the
"Existing Credit Facility"), (ii) the repayment of an $11.0 million note issued
to the seller as partial consideration of the Company's acquisition of the
Company's Fork Creek reserves (the "Fork Creek Note"), (iii) the repayment of
$1.4 million of certain other indebtedness of the Company or its subsidiaries,
and (iv) the redemption for $3.0 million of outstanding warrants (the "Bank
Warrants") to purchase the Company's common stock issued to the lenders in
connection with an amendment to the Existing Credit Facility (collectively, the
"Transactions"). The Existing Credit Facility, Fork Creek Note, documents
governing the indebtedness referred to in clause (iii) of the preceding
sentence, the letter dated May 11, 1998 among the Company and holders of the
Bank Warrants regarding valuation of the Bank Warrants and the New Credit
Facility (defined below) shall be referred to herein as the "Transaction
Documents".
In addition, concurrently with the issuance of the Securities the
Company and certain of its subsidiaries will enter into a revolving credit
facility (the "New Credit Facility") with Mellon Bank, N.A. and Canadian
Imperial Bank of Commerce, as agents, providing for an aggregate amount of
borrowings of up to $40 million.
2. Representations and Warranties of the Issuers. The Issuers, jointly
and severally, represent and warrant to and agree with the Initial Purchaser
that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and at all times subsequent thereto up to the Closing
Date (as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 2 do not
apply to statements or omissions made in reliance upon and in
conformity with information relating to the Initial Purchaser furnished
to the Company in writing by the Initial Purchaser expressly for use in
the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
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(b) Each of the Company and its subsidiaries set forth in
Exhibit A-1 hereto (the "Subsidiaries") has been duly incorporated and
each of the Company and the Subsidiaries is validly existing in good
standing as a corporation under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own
its properties and conduct its business as now conducted as described
in the Final Memorandum and is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions where
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or other), properties, prospects or results of operations of
the Company and the Subsidiaries, taken as a whole (any such event, a
"Material Adverse Effect"); as of the Closing Date, the Company will
have the authorized, issued and outstanding capitalization set forth in
the Final Memorandum; except as set forth in Exhibit A-2 hereto, the
Company does not have any subsidiaries or own directly or indirectly
any of the capital stock or long-term debt securities of or have any
equity interest in any other person; all of the outstanding shares of
capital stock of the Company and the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights and
are owned free and clear of all liens, encumbrances, equities and
restrictions on transferability (other than those imposed by the
Securities Act, the state securities or "Blue Sky" laws and, in the
case of the Company's Class II Common Stock, transfer restrictions
contained therein) or voting except for those imposed or created by the
New Credit Facility, the Existing Credit Facility or the Pen Holdings,
Inc. Stock Purchase Plan; except as set forth in the Final Memorandum,
all of the outstanding shares of capital stock of the Subsidiaries are
owned, directly or indirectly, by the Company; except as set forth in
the Final Memorandum, no options, warrants or other rights to purchase
from the Company or any Subsidiary, agreements or other obligations of
the Company or any Subsidiary to issue or other rights to convert any
obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company or any Subsidiary are
outstanding and no holder of securities of the Company or any
Subsidiary is entitled to have such securities registered under the
Registration Statement; and
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except as set forth in the Final Memorandum, there is no agreement,
understanding or arrangement among the Company or any Subsidiary and
each of their respective stockholders or any other person relating to
the ownership or disposition of any capital stock of the Company or any
Subsidiary or the election of directors of the Company or any
Subsidiary or the governance of the Company's or any Subsidiary's
affairs, and, if any, such agreements, understandings and arrangements
will not be breached or violated as a result of the execution and
delivery of, or the consummation of the transactions contemplated by,
this Agreement, the other Basic Documents and the Transaction
Documents.
(c) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Securities, the Exchange Notes and the Private Exchange Notes. The
Notes, the Exchange Notes and the Private Exchange Notes have each been
duly and validly authorized by the Company for issuance and, when
executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture, and, in the case the Notes,
delivered to and paid for by the Initial Purchaser in accordance with
the terms hereof, will have been duly executed, issued and delivered
and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms except that the
enforcement thereof may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, implied covenant of good faith and fair dealing,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding at law or in equity)
(collectively, the "Enforceability Exceptions"); the Guarantees
endorsed on the Notes and the guarantees to be endorsed on the Exchange
Notes and the Private Exchange Notes have each been duly and validly
authorized by each of the Guarantors and, when the Notes are executed
by the Company and authenticated by the Trustee in accordance with the
provisions of the Indenture, and delivered to and paid for by the
Initial Purchaser in accordance with the terms hereof, will have been
duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Guarantors, entitled to the benefits
of the Indenture
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and enforceable against the Guarantors in accordance with their terms
except that the enforcement thereof may be limited by the
Enforceability Exceptions; the documents evidencing the Securities are
in the form contemplated by the Indenture.
(d) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly and validly authorized by the
Issuers and meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and,
when executed and delivered by the Issuers (assuming the due
authorization, execution and delivery by the Trustee), will constitute
a valid and legally binding agreement of the Issuers, enforceable
against the Issuers in accordance with its terms except that the
enforcement thereof may be limited by the Enforceability Exceptions.
(e) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the
Issuers and, when executed and delivered by the Issuers, will
constitute a valid and legally binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms except
that the enforcement thereof may be limited by the Enforceability
Exceptions and except as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and
public policy considerations.
(f) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed and
delivered by the Issuers, will constitute a valid and legally binding
agreement of the Issuers, enforceable against the Issuers in accordance
with its terms except that the enforcement thereof may be limited by
the Enforceability Exceptions and except as any rights to indemnity or
contribution hereunder may be limited by federal and state securities
laws and public policy considerations. The Securities, the Indenture
and the Registration Rights Agreement conform in all material respects
to the descriptions thereof in the Final Memorandum.
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(g) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the New
Credit Facility. The New Credit Facility has been duly and validly
authorized by the Issuers and, when executed and delivered by the
Issuers, will constitute valid and legally binding obligations of the
Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by the
Enforceability Exceptions. Each of the Transaction Documents conforms
in all material respects to the description thereof in the Final
Memorandum.
(h) (i) The Issuers have delivered or made available to the
Initial Purchaser a true and correct copy of each of the Transaction
Documents that have been executed and delivered prior to the date of
this Agreement and each other Transaction Document in the form
substantially as it will be executed and delivered on or prior to the
Closing Date, together with all related agreements and all schedules
and exhibits thereto, and as of the date hereof there have been no
amendments, alterations, modifications or waivers of any of the
provisions of any of the Transaction Documents since their date of
execution or from the form in which any such Transaction Document has
been delivered to the Initial Purchaser; and (ii) there exists as of
the date hereof (after giving effect to the Transactions) no event or
condition that would constitute a default or an event of default (in
each case as defined in each of the Transaction Documents) under any of
the Transaction Documents that would result in a Material Adverse
Effect or materially adversely affect the ability of the Company to
consummate the Transactions.
(i) No consent, approval, authorization, license,
qualification, exemption or order of any court or governmental agency
or body or third party is required for the performance of this
Agreement, the Registration Rights Agreement, the Securities, the
Indenture by the Issuers or for the consummation by the Issuers of any
of the Transactions, or the application of the proceeds of the issuance
of the Securities as described in the Final Memorandum, except as has
already been acquired or as may be required under state securities or
"Blue Sky" laws in connection with the purchase and distribution of the
Securities by the Initial Purchaser; all such consents, approvals,
authorizations, licenses, qualifications, exemptions and orders set
forth in the Final Memorandum which are required to be obtained by the
Closing Date have been obtained
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or made, as the case may be, and are in full force and effect
and not the subject of any pending or, to the best knowledge of the
Issuers, threatened attack by appeal or direct proceeding or otherwise.
(j) None of the Company or the Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of any statute,
judgment, decree, order, rule or regulation applicable to it or any of
its properties or assets, which breach or violation would, individually
or in the aggregate, have a Material Adverse Effect, or (iii) in
default (nor has any event occurred which with notice or passage of
time, or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in this Agreement, the Registration Rights Agreement, the
Securities or the Indenture or any other contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which it
is a party or to which it is subject, which default would, individually
or in the aggregate, have a Material Adverse Effect.
(k) The execution, delivery and performance by the Issuers of
this Agreement, the Registration Rights Agreement, the Securities and
the Indenture and the consummation by the Issuers of the transactions
contemplated hereby and thereby and by the Final Memorandum and the
fulfillment of the terms hereof and thereof will not (a) violate,
conflict with or constitute or result in a breach of or a default under
(or an event that, with notice or lapse of time, or both, would
constitute a breach of or a default under) any of (i) the terms or
provisions of any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate or agreement or instrument to which any of the Company or
the Subsidiaries is a party or to which any of their respective
properties or assets are subject, (ii) the certificate of incorporation
or bylaws of any of the Company or the Subsidiaries (or similar
organizational document) or (iii) (assuming compliance with all
applicable state securities or "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency
or other body applicable to the Company or the Subsidiaries or any of
their respective properties or assets or (b) result in the imposition
of any lien upon or with respect to any of the properties or
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assets now owned or hereafter acquired by the Company or any
of the Subsidiaries, which violation, conflict, breach, default or lien
would, individually or in the aggregate, have a Material Adverse
Effect.
(l) The audited consolidated financial statements included in
the Final Memorandum present fairly the consolidated financial
position, results of operations and cash flows of such entities at the
dates and for the periods to which they relate and have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis; the interim unaudited consolidated financial
statements included in the Final Memorandum present fairly the
consolidated financial position, results of operations and cash flows
of such entities at the dates and for the periods to which they relate
subject to year-end audit adjustments and, except as disclosed in the
Final Memorandum, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis with the
audited consolidated financial statements included therein; the summary
and selected financial and statistical data included in the Final
Memorandum present fairly the information shown therein and have been
prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein; and
Price Waterhouse LLP, which has examined certain of such financial
statements as set forth in its reports included in the Final
Memorandum, is an independent public accounting firm as required by the
Securities Act.
(m) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Final Memorandum (A) except for the information presented in the
"Supplemental Historical Unaudited and Pro Forma Financial Data" and
the information set forth in the "Unaudited Pro Forma Condensed
Combined Statements of Operations and Other Data" for the year ended
December 31, 1997 (which information, in each case, has been compiled
on the pro forma basis described in the notes thereto) have been
prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the Commission promulgated
thereunder, the "Exchange Act") and (B) have been properly computed on
the bases described therein; and the assumptions used in the
preparation of the pro forma financial statements and other pro forma
financial information
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included in the Final Memorandum are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(n) Except as described in the Final Memorandum, there is not
pending or, to the best knowledge of the Issuers, threatened any
action, suit, proceeding, inquiry or investigation, governmental or
otherwise, to which any of the Company or the Subsidiaries is a party,
or to which their respective properties or assets are subject, before
or brought by any court, arbitrator or governmental agency or body,
that, if determined adversely to the Company or any such Subsidiary
would, individually or in the aggregate, have a Material Adverse Effect
or that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the Transactions or the issuance or sale of the
Securities to be sold hereunder or the application of the proceeds
therefrom or the other transactions described in the Final Memorandum.
(o) None of the Company or the Subsidiaries has, and, after
giving effect to the Transactions and the issuance and sale of the
Securities, will not have, any liability for any prohibited transaction
or funding deficiency or any complete or partial withdrawal liability
with respect to any pension, profit sharing or other plan which is
subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which any of the Company or the Subsidiaries
makes or ever has made a contribution and in which any employee of any
of the Company or the Subsidiaries is or has ever been a participant.
With respect to such plans, the Company and the Subsidiaries are, and,
after giving effect to the Transactions and the issuance and sale of
the Securities, will be, in compliance in all material respects with
all provisions of ERISA.
(p) The Company and the Subsidiaries own or possess adequate
licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights and know-how that are necessary to conduct
their business as described in the Final Memorandum. None of the
Company or the Subsidiaries has received any notice of infringement of
or conflict with (or knows of any such infringement of or conflict
with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how that, if
such assertion of
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infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company and the Subsidiaries possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals
presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("Permits"), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect; each of the Company and the Subsidiaries has fulfilled and
performed all of its obligations with respect to such Permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit,
except where such revocation, termination or impairment would not have
a Material Adverse Effect; and none of the Company or the Subsidiaries
has received any notice of any proceeding relating to revocation or
modification of any such Permit, except as described in the Final
Memorandum and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(r) Subsequent to the respective dates as of which information
is given in the Final Memorandum and except as described therein, (i)
the Company and the Subsidiaries have not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, in either case whether or not in the ordinary
course of business, (ii) the Company and the Subsidiaries have not
purchased any of their respective outstanding capital stock, or
declared, paid or otherwise made any dividend or distribution of any
kind on any of their respective capital stock or otherwise (other than,
with respect to any of such Subsidiaries, the purchase of, or dividend
or distribution on, capital stock owned by the Company) and (iii) there
shall not have been any change in the capital stock or long-term
indebtedness of the Company or any of the Subsidiaries other than
indebtedness for equipment incurred in the ordinary course as permitted
by the Indenture.
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(s) There are no legal or governmental proceedings, nor are
there any contracts or other documents required by the Securities Act
to be described in a prospectus that are not described in the Final
Memorandum. Except as described in the Final Memorandum, none of the
Company or the Subsidiaries is in default under any of the contracts
described in the Final Memorandum, has received a notice or claim of
any such default or has knowledge of any breach of such contracts by
the other party or parties thereto, except such defaults or breaches as
would not, individually or in the aggregate, have a Material Adverse
Effect.
(t) None of the Company or the Subsidiaries has taken or will
take any action that would cause this Agreement or the issuance or sale
of the Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or
as the same may hereafter be in effect, on the Closing Date.
(u) Each of the Company and the Subsidiaries has good and
marketable title to all real property described in the Final Memorandum
as being owned by it and good and marketable title to the leasehold
estate in the real property described therein as being leased by it,
free and clear of all liens, charges, encumbrances or restrictions,
except, in each case, as referenced in the Final Memorandum and except
for liens for taxes not yet due and payable or such as would not,
individually or in the aggregate, have a Material Adverse Effect. All
leases, contracts and agreements, including those referred to in the
Final Memorandum to which the Company or any of the Subsidiaries is a
party or by which any of them is bound are valid and enforceable
against the Company or any such Subsidiary, are, to the knowledge of
the Issuers, valid and enforceable against the other party or parties
thereto and are in full force and effect.
(v) Each of the Company and the Subsidiaries has filed all
necessary federal, state and foreign income and franchise tax returns,
except where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse Effect, and
have paid all taxes shown as due thereon; and other than tax
deficiencies disclosed in the Final Memorandum which the Company or any
Subsidiary is contesting in good faith and for which adequate reserves
have been provided in accordance with generally accepted accounting
principles, there is no other
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tax deficiency that has been asserted against the Company or any
Subsidiary that would, individually or in the aggregate, have a
Material Adverse Effect.
(w) (i) Immediately after the consummation of the Transactions
and the other transactions contemplated by this Agreement and the other
Basic Documents, the fair value and present fair saleable value of the
assets of each of the Company and the Subsidiaries will exceed the sum
of its stated liabilities and identified contingent liabilities; and
(ii) each of the Company and the Subsidiaries is not, nor will it be,
after giving effect to the execution, delivery and performance of this
Agreement and the other Basic Documents, and the consummation of the
Transactions and the other transactions contemplated hereby and
thereby, (a) left with unreasonably small capital with which to carry
on its business as it is proposed to be conducted, (b) unable to pay
its debts (contingent or otherwise) as they mature or (c) otherwise
insolvent.
(x) Except as disclosed in the Final Memorandum and except as
would not, individually or in the aggregate, have a Material Adverse
Effect, (A) each of the Company and the Subsidiaries is in compliance
with all applicable Environmental Laws, (B) each of the Company and the
Subsidiaries has made all filings and provided all notices required
under any applicable Environmental Law, and has all permits,
authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (C)
there is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the best
knowledge of the Issuers, threatened against the Company or any of the
Subsidiaries under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any Environmental
Law with respect to any assets, facility or property owned, operated,
leased or controlled by the Company or any of the Subsidiaries, (E)
neither the Company nor any of the Subsidiaries has received notice
that it has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA") or any comparable state law, and (F)
no property or facility of the Company or any of the Subsidiaries is
(i) listed or proposed for listing on the National Priorities List
under CERCLA or (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability
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Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental
authority.
For purposes of this Agreement, the following terms shall have
the following meanings: "Environmental Law" means any federal, state,
local or municipal statute, law, rule, regulation, ordinance, code,
policy or rule of common law and any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment binding on any of the Company or the
Subsidiaries, relating to pollution or protection of the environment or
health or safety or any chemical, material or substance, that is
subject to regulation thereunder. "Environmental Claims" means any and
all administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, notices of responsibility, information
requests, liens, notices of noncompliance or violation, investigations
or proceedings relating in any way to any Environmental Law.
(y) None of the Company or the Subsidiaries is, or immediately
after the Closing Date will be, required to register as an "investment
company" or a company "controlled by" an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(z) None of the Company or the Subsidiaries or any of such
entities' directors, officers, employees, agents or controlling persons
has taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result, under the Securities Act or
otherwise, in, or that has constituted, stabilization or manipulation
of the price of the Securities.
(aa) None of the Company, the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Securities Act) directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of
any "security" (as defined in the Securities Act) which is or could be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) in
connection with the offering of the Securities or in any manner
involving a public offering within the meaning
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of Section 4(2) of the Securities Act. Assuming (i) the accuracy of the
representations and warranties of the Initial Purchaser in Section 9
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser in the manner
contemplated by this Agreement to register any of the Securities under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act.
(bb) No securities of any Issuer are of the same class (within
the meaning of Rule 144A under the Securities Act) as the Securities
and listed on a national securities exchange registered under Section 6
of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.
(cc) Except as set forth in the Final Memorandum, there is no
strike, labor dispute, slowdown or work stoppage with the employees of
the Company or any of the Subsidiaries which is pending or, to the best
knowledge of the Company or any of the Subsidiaries, threatened.
(dd) Each of the Company and the Subsidiaries carries
insurance (including self-insurance) in such amounts and covering such
risks as in its reasonable determination is adequate for the conduct of
its business and the value of its properties.
(ee) Each of the Company and the Subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(ff) No holder of securities of the Company or any Subsidiary
will be entitled to have such securities registered under the
registration statements required to be filed by the Company pursuant to
the Registration Rights Agreement other than as expressly permitted
thereby.
(gg) The statistical and market and industry-related data
included in the Final Memorandum are based on or derived
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from sources which the Issuers believe to be reliable and accurate or
represent the Issuers' good faith estimates that are made on the basis
of data derived from such sources.
(hh) Except as stated in the Final Memorandum, the Company
does not know of any claims for services, either in the nature of a
finder's fee or financial advisory fee, with respect to the offering of
the Securities and the transactions contemplated by the Final
Memorandum.
(ii) None of the Company, the Subsidiaries, any of their
respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchaser) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Securities
Act ("Regulation S")) with respect to the Securities and the Company,
the Subsidiaries and their respective Affiliates and any person acting
on its or their behalf have acted in accordance with the offering
restrictions requirement of Regulation S.
Any certificate signed by any officer of the Company or any
Subsidiary and delivered to the Initial Purchaser or to counsel for the Initial
Purchaser shall be deemed a joint and several representation and warranty by the
Issuers to the Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, the Notes, at 97.375% of the total price to investors
set forth on the cover of the Final Memorandum.
One or more certificates in definitive form for the Notes and
the related Guarantees that the Initial Purchaser has agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Initial Purchaser requests upon notice to the Company at least
48 hours prior to the Closing Date (as defined) shall be delivered by or on
behalf of the Company, against payment by or on behalf of the Initial Purchaser,
of the purchase price therefor by wire transfer of immediately available funds
to the account of the Company previously designated by it in writing. Such
delivery of and payment for the Notes and the related Guarantees shall
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be made at the offices of Xxxxxxxx Xxxxxxxxx Professional Corporation, Xxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, at 9:00 a.m. Pittsburgh time, on June 8,
1998, or at such date as the Initial Purchaser and the Company may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The Company will make such certificate or certificates for the
Notes and the related Guarantees available for checking and packaging by the
Initial Purchaser at the offices in New York, New York of CIBC XXXXXXXXXXX CORP.
at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser
proposes to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
5. Certain Covenants. The Issuers jointly and severally
covenant and agree with the Initial Purchaser that:
(i) The Issuers will not amend or supplement the Final
Memorandum or any amendment or supplement thereto unless the Initial
Purchaser shall have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchaser shall not have given its consent (which
consent shall not be unreasonably withheld). The Issuers will promptly,
upon the reasonable request of the Initial Purchaser or counsel for the
Initial Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary in
connection with the resale of the Securities by the Initial Purchaser.
(ii) The Issuers will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchaser may designate and will continue such qualifications
in effect for as long as may be necessary to complete the resale of the
Securities by the Initial Purchaser; provided, however, that in
connection therewith none of the Issuers shall be required to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or to take any other action that would
subject it to general service of process or to taxation in excess of a
nominal amount in respect of doing business in any jurisdiction in
which it is not otherwise subject.
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(iii) If, at any time prior to the completion of the resale by
the Initial Purchaser of the Notes or the Private Exchange Notes, any
event shall occur as a result of which it is necessary, in the opinion
of counsel for the Initial Purchaser, to amend or supplement the Final
Memorandum in order to make such Final Memorandum not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if for any other reason it shall be necessary to amend or
supplement the Final Memorandum in order to comply with applicable
laws, rules or regulations, the Issuers shall (subject to Section 5(i))
forthwith amend or supplement such Final Memorandum at their own
expense so that, as so amended or supplemented, such Final 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 and will comply with all
applicable laws, rules or regulations.
(iv) The Issuers will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of
each Preliminary Memorandum or Final Memorandum or any amendment or
supplement thereto as the Initial Purchaser may reasonably request.
(v) None of the Issuers or any of their respective
Affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the
Securities Act) which could be integrated with the sale of the
Securities in a manner which would require the registration under the
Securities Act of the Securities.
(vi) For so long as any of the Securities remain outstanding,
the Company will furnish to the Initial Purchaser (a) as soon as
available, a copy of each report or other communication (financial or
otherwise) of the Company mailed to the Trustee or holders of the
Securities or stockholders or filed with the Commission or any national
securities exchange on which any class of securities of the Company may
be listed, and (b) from time to time such other information concerning
the Issuers as the Initial Purchaser may reasonably request.
(vii) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Final
Memorandum.
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(viii) Prior to the Closing Date, the Company will furnish to
the Initial Purchaser, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company and the Subsidiaries, for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(ix) The Company will not, and will not permit any of
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) in connection with the offering of the Securities or in
any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(x) For so long as any of the Securities remain outstanding,
the Company will make available at its expense, upon request, to any
holder of Securities and any prospective purchasers thereof the
information specified in Rule 144A(d)(4) under the Securities Act,
unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(xi) The Issuers will use their best efforts to (i) permit
the Securities to be designated PORTAL securities in accordance with
the rules and regulations adopted by the National Association of
Securities Dealers, Inc. (the "NASD") relating to trading in the
Private Offerings, Resales and Trading through Automated Linkages
market (the "Portal Market") and (ii) permit the Securities to be
eligible for clearance and settlement through The Depository Trust
Company.
(xii) In connection with Securities offered and sold in an
offshore transaction (as defined in Regulation S), the Issuers will not
register any transfer of such Securities not made in accordance with
the provisions of Regulation S and will not, except in accordance with
the provisions of Regulation S, if applicable, issue any such
Securities in the form of definitive securities.
(xiii) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provision hereof (other than by reason
of a default or omission by the Initial Purchaser of its obligations
hereunder or pursuant to Section 11(i)-(v), in which case each party is
responsible for its own expenses) or if this Agreement
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shall be terminated by the Initial Purchaser because of any failure or
refusal on the part of the Issuers to comply with the material terms or
fulfill any of the material conditions of this Agreement, the Company
agrees to reimburse the Initial Purchaser for all reasonable
out-of-pocket expenses (including fees and expenses of counsel for the
Initial Purchaser) incurred by the Initial Purchaser in connection
herewith, but in no event will the Company be liable to the Initial
Purchaser for damages on account of loss of anticipated profits from
the sale of the Securities.
(xiv) The Issuers will use their commercially reasonable best
efforts to do and perform all things required to be done and performed
by them under this Agreement and the other Basic Documents prior to or
after the Closing Date and to satisfy all conditions precedent on their
part to the obligations of the Initial Purchaser to purchase and accept
delivery of the Securities.
6. Expenses. Notwithstanding any termination of this Agreement
(pursuant to Section 11 or otherwise), the Issuers jointly and severally agree
to pay the following costs and expenses and all other costs and expenses
incident to the performance by the Issuers of their obligations hereunder: (i)
the negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement and of the other Basic Documents, any amendment or
supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith; (ii) the preparation, printing or reproduction of each Preliminary
Memorandum, the Final Memorandum and each amendment or supplement to any of
them; (iii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of each
Preliminary Memorandum, the Final Memorandum and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Notes and the
related Guarantees, including any stamp taxes in connection with the original
issuance and sale of the Securities and trustees' fees; (v) the reproduction and
delivery of the preliminary and supplemental "Blue Sky" memoranda and all other
agreements or documents reproduced and delivered in connection with the offering
of the Securities; (vi) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several states
(including filing fees
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and the reasonable fees, expenses and disbursements of Xxxxxx Xxxxxx & Xxxxxxx,
counsel to the Initial Purchaser, relating to such registration and
qualification); (vii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Issuers; (ix) fees and expenses of the Trustee
including fees and expenses of its counsel; (x) all expenses and listing fees
incurred in connection with the application for quotation of the Securities on
the PORTAL Market; and (xi) any fees charged by investment rating agencies for
the rating of the Securities.
7. Conditions of the Initial Purchaser's Obligations. The
obligation of the Initial Purchaser to purchase and pay for the Securities is
subject to the accuracy of the representations and warranties contained herein,
to the performance by the Issuers of their respective covenants and agreements
hereunder and to the following additional conditions unless waived in writing by
the Initial Purchaser:
(i) The Initial Purchaser shall have received an opinion of
Xxxxxxxx Ingersoll Professional Corporation, counsel to the Issuers, in
form and substance satisfactory to the Initial Purchaser and Xxxxxx
Xxxxxx & Xxxxxxx, counsel to the Initial Purchaser, dated the Closing
Date, substantially in the form of Exhibit B hereto. In rendering such
opinion, Xxxxxxxx Ingersoll Professional Corporation, shall have
received and may rely solely upon such certificates and other documents
and information, including one or more opinions of local counsel
reasonably acceptable to the Initial Purchaser and Xxxxxx Xxxxxx &
Xxxxxxx, counsel to the Initial Purchaser, as they may reasonably
request to pass upon such matters. In addition, in rendering its
opinion, Xxxxxxxx Xxxxxxxxx Professional Corporation may state that its
opinion is limited to matters of Pennsylvania, New York, Kentucky,
Delaware corporate and federal law.
(ii) The Initial Purchaser shall have received an opinion of
Xxxxxx, Xxxxx & Bockius LLP, tax counsel to the Company, dated the
Closing Date, in form and substance satisfactory to the Initial
Purchaser and Xxxxxx Xxxxxx & Xxxxxxx, that, as of its date and the
date hereof, disclosure of tax matters and proceedings under the
headings "Risk Factors--Risks Associated with IRS Matters" and
"Business--Legal Proceedings--IRS Proceedings" in the Final
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Memorandum does not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(iii) The Initial Purchaser shall have received an opinion,
dated the Closing Date, of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the
Initial Purchaser, with respect to the sufficiency of certain legal
matters relating to this Agreement and such other related matters as
the Initial Purchaser may require. In rendering such opinion, Xxxxxx
Xxxxxx & Xxxxxxx shall have received and may rely upon such
certificates and other documents and information as they may reasonably
request to pass upon such matters. In addition, in rendering their
opinion, Xxxxxx Xxxxxx & Xxxxxxx may state that their opinion is
limited to matters of New York, Delaware corporate and federal law.
(iv) The Initial Purchaser shall have received from Price
Waterhouse LLP, independent public accountants for the Issuers,
"comfort" letters dated the date hereof and the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchaser and
Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Initial Purchaser.
(v) The representations and warranties of the Issuers
contained in this Agreement shall be true and correct on and as of the
Closing Date; the Issuers shall have complied in all material respects
with all agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date.
(vi) There shall not have been any change in the capital
stock of the Company or the Subsidiaries or any material increase in
the consolidated short-term or long-term debt of the Company from that
set forth or contemplated in the Final Memorandum and (b) the Company
and the Subsidiaries shall not have any liabilities or obligations,
contingent or otherwise (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken
as a whole, other than those reflected in the Final Memorandum.
(vii) None of the issuance and sale of the Securities pursuant
to this Agreement or any of the transactions contemplated by any of the
other Basic Documents or the Transaction Documents shall be enjoined
(temporarily or permanently) and no restraining order or other
injunctive
-22-
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order shall have been issued; and there shall not have been any legal
action, order, decree or other administrative proceeding instituted or
threatened against any of the Issuers or against the Initial Purchaser
relating to the issuance of the Securities or the Initial Purchaser's
activities in connection therewith or any other transactions
contemplated by this Agreement or the Final Memorandum, the other Basic
Documents or the Transaction Documents.
(viii) Subsequent to the date of this Agreement and since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting the general
affairs, management, business, condition (financial or other),
properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole, not contemplated by the Final
Memorandum that, in the opinion of the Initial Purchaser, would
materially adversely affect the market for the Securities, or (ii) any
event or development relating to or involving any of the Company or the
Subsidiaries or any of the officers or directors of the Company or the
Subsidiaries that makes any material statement made in the Final
Memorandum untrue or that, in the opinion of the Issuers and their
counsel or the Initial Purchaser and its counsel, requires the making
of any addition to or change in the Final Memorandum in order to state
a material fact required by any applicable law, rule or regulation to
be stated therein or necessary in order to make the statements made
therein not misleading.
(ix) The Initial Purchaser shall have received certificates,
dated the Closing Date and signed by the chief executive officer and
the chief financial officer of each Issuer, to the effect that:
a. All of the representations and warranties of the
Issuers set forth in this Agreement are true and
correct as if made on and as of the Closing Date and
the Issuers have complied in all material respects
with all agreements and satisfied all conditions on
their part to be performed or satisfied under this
Agreement at or prior to the Closing Date.
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b. The issuance and sale of the Securities pursuant to
this Agreement or any of the transactions
contemplated by the Transaction Documents have not
been enjoined (temporarily or permanently) and no
restraining order or other injunctive order has been
issued and there has not been any legal action,
order, decree or other administrative proceeding
instituted or threatened against any of the Issuers
relating to the issuance of the Securities or the
Initial Purchaser's activities in connection
therewith or in connection with any other
transactions contemplated by this Agreement or the
Final Memorandum, the other Basic Documents or the
Transaction Documents.
c. Subsequent to the date of this Agreement and since
the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), there has
not occurred (i) any change, or any development
involving a prospective change, in or affecting the
general affairs, management, business, condition
(financial or other), properties, prospects or
results of operations of the Company and the
Subsidiaries, taken as a whole, not contemplated by
the Final Memorandum that would materially adversely
affect the market for the Securities, or (ii) any
event or development relating to or involving any of
the Company or the Subsidiaries or any of the
respective officers or directors of the Company or
the Subsidiaries that makes any material statement
made in the Final Memorandum untrue or that requires
the making of any addition to or change in the Final
Memorandum in order to state a material fact required
by any applicable law, rule or regulation to be
stated therein or necessary in order to make the
statements made therein not misleading.
d. There has not been any material change in the capital
stock of the Company or the Subsidiaries nor any
material increase in the consolidated short-term or
long-term debt of the Company from that set forth or
contemplated in the Final Memorandum and (b) the
Company and the Subsidiaries have no liabilities or
obligations,
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contingent or otherwise (whether or not in the
ordinary course of business), that are material to
the Company and the Subsidiaries, taken as a whole,
other than those reflected in the Final Memorandum.
e. At the Closing Date and after giving effect to the
consummation of the transactions contemplated by this
Agreement and the other Basic Documents and the
Transactions, there exists no Default or Event of
Default (as defined in the Indenture).
(x) On the Closing Date, the New Credit Facility shall
provide for revolving credit borrowings of not less than $40 million,
of which at least $40 million shall be available on the Closing Date.
(xi) All proceedings taken in connection with the issuance of
the Securities and the transactions contemplated by this Agreement and
the other Basic Documents and all documents and papers relating thereto
shall be reasonably satisfactory to the Initial Purchaser and counsel
to the Initial Purchaser. The Initial Purchaser and counsel to the
Initial Purchaser shall have received copies of such papers and
documents as they may reasonably request in connection therewith, all
in form and substance reasonably satisfactory to them.
(xii) The Company shall apply the proceeds from the issuance
and sale of the Notes as described under "Use of Proceeds" in the Final
Memorandum.
(xiii) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 436(g) under the Securities Act, that (A) it is
downgrading its rating assigned to any debt securities of the Company,
or (B) it is reviewing its rating assigned to any debt securities of
the Company with a view to possible downgrading, or with negative
implications, or direction not determined.
(xiv) On or before the Closing Date, the Initial Purchaser
shall have received the Registration Rights Agreement executed by the
Company and such agreement shall be in full force and effect at all
times from and after the Closing Date.
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(xv) The Issuers shall have furnished or caused to be
furnished to the Initial Purchaser such further certificates and
documents as the Initial Purchaser shall have reasonably requested.
All such opinions, certificates, letters, schedules, documents
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchaser and counsel to the Initial Purchaser. The
Issuers shall furnish to the Initial Purchaser such conformed copies of such
opinions, certificates, letters, schedules, documents and instruments in such
quantities as the Initial Purchaser shall reasonably request.
8. Indemnification and Contribution. (a) Each Issuer jointly
and severally agrees to indemnify and hold harmless the Initial Purchaser, each
director, officer, employee or agent of the Initial Purchaser and each person,
if any, who controls the Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages, liabilities or expenses to which the Initial Purchaser or such
director, officer, employee, agent or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto or (B) any of the
Basic Documents or any application or other document, or any amendment
or supplement thereto, executed by any Issuer or based upon written
information furnished by or on behalf of any Issuer filed in any
jurisdiction in order to qualify the Securities under the securities or
"Blue Sky" laws thereof or filed with the Commission or any securities
association or securities exchange (collectively, the "Documents"); or
(ii) the omission or alleged omission to state, in any
Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, or any of the Documents, a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and will reimburse, as incurred, the Initial Purchaser and
each such director, officer, employee, agent or controlling person for
any legal or other expenses reasonably incurred by the Initial
Purchaser or such director, officer, employee, agent or controlling
-26-
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person in connection with investigating, defending against or appearing
as a third-party witness in connection with any such loss, claim,
damage, liability, expense or action; provided, however, that none of
the Issuers will be liable in any such case to the Initial Purchaser or
any director, officer, employee, agent or controlling person of the
Initial Purchaser to the extent that any such loss, claim, damages,
liability expense or action arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Memorandum or the Final Memorandum or any
amendment or supplement thereto, or any Document, in reliance upon and
in conformity with written information furnished to the Issuers by or
on behalf of the Initial Purchaser specifically for use therein; and
provided, further, that none of the Issuers will be liable to the
Initial Purchaser or any director, officer, employee, agent or any
person controlling the Initial Purchaser with respect to any such
untrue statement or omission made in any Preliminary Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage, expense
or liability purchased Securities from the Initial Purchaser in
reliance upon the Preliminary Memorandum but was not sent or given a
copy of the Final Memorandum (as amended or supplemented) that was made
available by the Issuers to the Initial Purchaser at or prior to the
written confirmation of the sale of the Securities to such person in
any case where such delivery of such Final Memorandum (as so amended or
supplemented) is required by the Securities Act, unless such failure to
deliver such Final Memorandum (as amended or supplemented) was a result
of noncompliance by the Issuers with Section 5(iv) of this Agreement.
This indemnity agreement will be in addition to any liability that the
Issuers may otherwise have to the indemnified parties. The Issuers
further agree that the indemnification, contribution and reimbursement
commitments set forth in this Section 8 shall apply whether or not the
Initial Purchaser is a formal party to any such lawsuits, claims or
other proceedings. None of the Issuers will, without the prior written
consent of the Initial Purchaser, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification by the Initial
Purchaser may be sought hereunder (whether or not the Initial Purchaser
or
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any person who controls the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of
the Initial Purchaser and each such director, officer, employee, agent
or controlling person from all liability arising out of such claim,
action, suit or proceeding.
(b) The Initial Purchaser will indemnify and hold harmless the
Issuers, their respective directors, officers, employees and agents and each
person, if any, who controls any of the Issuers within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which any of the Issuers or any such director,
officer, employee, agent or controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Memorandum or the Final Memorandum or any amendment
or supplement thereto or any Document, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement was made in
reliance upon and in conformity with written information furnished to any of the
Issuers by or on behalf of the Initial Purchaser specifically for use therein;
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by any
of the Issuers or any such director, officer, employee, agent or controlling
person in connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchaser may otherwise have to the indemnified
parties.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability that it may have to any indemnified party except to the extent
that such omission results in the forfeiture by the indemnifying party of
substantial rights and defenses. In case any such action is brought against any
indemnified party, and such indemnified party notifies
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the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the named parties in any such action (including any
impleaded parties) include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be one
or more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to any such indemnifying party,
then the indemnifying parties shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable out-of-pocket costs of investigation, incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions); (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying parties; or (iii) the
indemnifying party shall have failed to assume the defense or retain counsel
reasonably satisfactory to the indemnified party. After such notice from the
indemnifying parties to such indemnified party (so long as the indemnified party
shall have informed the indemnifying parties of such action in accordance with
this Section 8 on a timely basis prior to the indemnified party seeking
indemnification hereunder), the indemnifying parties will not be liable under
this Section 8 for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party, unless such indemnified party waived its rights under this Section 8, in
which case the indemnified party may effect such a settlement without such
consent.
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(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable contribution, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages, expenses or
liabilities (or actions in respect thereof). The relative benefits received by
the Issuers on the one hand and the Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Securities (before deducting expenses) received by the Issuers bear to the
total discounts and commissions received by the Initial Purchaser. The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuers on the one hand or the Initial Purchaser on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses incurred by
such party in connection with investigating or defending any such claim. The
Issuers and the Initial Purchaser agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Issuers on the one hand and the Initial Purchaser on the other hand
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 in the first sentence of this paragraph (d). Notwithstanding any
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other provision of this paragraph (d), the Initial Purchaser shall not be
obligated to make contributions hereunder that in the aggregate exceed the total
discounts and commissions received by the Initial Purchaser under this
Agreement, less the aggregate amount of any damages that the Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements, and 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. For purposes of this paragraph (d), each director, officer,
employee or agent of and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial
Purchaser, and each director, officer, employee and agent of any of the Issuers
and each person, if any, who controls any of the Issuers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Section
8, the indemnification and contribution provisions of the Registration Rights
Agreement shall govern any claim with respect thereto.
9. Offering of Securities; Restrictions on Transfer. (a) The
Initial Purchaser represents and warrants to the Issuers that it is a QIB. The
Initial Purchaser represents, warrants and covenants to the Issuers and agrees
that (i) it is not acquiring the Notes with a view to any distribution that
would violate the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction, (ii) it has not and will not
solicit offers for, or offer or sell, the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and (iii) it has and will
solicit offers for the Securities only from, and will offer the Securities only
to, (A) in the case of offers inside the United States, persons whom the Initial
Purchaser reasonably believes to be QIBs or, if any such person is buying for
one or more institutional accounts for which such person is acting as fiduciary
or agent, only when such person has represented to the Initial Purchaser that
each such account is a QIB, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A and, in each case, in
transactions under Rule 144A and (B) in
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the case of offers outside the United States, to persons other than U.S. persons
("foreign purchasers," which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)), with such knowledge and
experience in financial and business matters as necessary in order to evaluate
the risks and merits of an investment in the Notes.
(b) The Initial Purchaser represents and warrants with respect
to offers and sales outside the United States that (i) it has and will comply
with all applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Securities or has in its possession or
distributes any Memorandum or any such other material, in all cases at its own
expense; (ii) the Securities have not been and will not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the Securities Act or pursuant to
an exemption from the registration requirements of the Securities Act; (iii) it
has offered the Securities and will offer and sell the Securities (A) as part of
its distribution at any time and (B) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date, only in accordance with
Rule 903 of Regulation S and, accordingly, neither it nor any persons acting on
its behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Securities, and any such
persons have complied and will comply with the offering restrictions requirement
of Regulation S; and (iv) it agrees that, at or prior to confirmation of sales
of the Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of the distribution of the
securities at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them in Regulation S."
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Terms used in this Section 9 and not defined in this Agreement have the meanings
given to them in Regulation S.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Issuers, their respective officers and the Initial Purchaser set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Issuers, any of their respective
officers or directors, the Initial Purchaser or any controlling person referred
to in Section 8 hereof and (ii) delivery of, payment for or disposition of the
Securities, and shall be binding upon and shall inure to the benefit of any
successors, assigns, heirs or personal representatives of the Issuers, the
Initial Purchaser and indemnified parties referred to in Section 8 hereof. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchaser by notice to the Issuers given in the
event that the Issuers shall have failed, refused or been unable to satisfy all
conditions on their part to be performed or satisfied hereunder on or prior to
the Closing Date or if at or prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, which
loss or interference, in the sole judgment of the Initial Purchaser,
has had or has a Material Adverse Effect, or there shall have been any
material adverse change, or any development involving a prospective
material adverse change (including without limitation a change in
management or control of the Company or any Subsidiary), in the general
affairs, management, business, condition (financial or other),
properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in or contemplated
by the Final Memorandum (exclusive of any amendment or supplement
thereto);
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(ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market
shall have been suspended or minimum or maximum prices shall have been
established on any such exchange;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States that, in the case of (A), (B) or (C)
above, in the sole judgment of the Initial Purchaser, makes it
impracticable or inadvisable to proceed with the delivery of the
Securities as contemplated by the Final Memorandum, as amended as of
the date hereof; or
(v) any securities of the Company or any of the Subsidiaries
shall have been downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating
organization.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchaser, shall be hand delivered, mailed by
first-class mail, couriered by next-day air courier or telecopied and confirmed
in writing to CIBC XXXXXXXXXXX CORP., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department, and with a copy to
Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxxx, Esq. If sent to any of the Issuers, shall be mailed, delivered or
telecopied and confirmed in writing, to Pen Holdings, Inc., Center Court
Building, 0000 Xxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxx, and with a copy to Xxxxxxxx Ingersoll Professional Corporation, Xxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the
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mail, postage prepaid, if mailed; one business day after being timely delivered
to a next-day air courier guaranteeing overnight delivery; and when receipt is
acknowledged by the addressee, if telecopied.
13. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchaser and Each of the Issuers and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuers contained in Section 8 of this Agreement shall
also be for the benefit of the directors, officers, employees and agents and any
person or persons who control the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 8 of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of the Issuers and any person or persons who control any Issuer within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchaser will be deemed a successor
because of such purchase.
14. No Waiver; Modifications in Writing. No failure or delay
on the part of any Issuer or the Initial Purchaser in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any Issuer or the Initial Purchaser at law or
in equity or otherwise. No waiver of or consent to any departure by any Issuer
or the Initial Purchaser from any provision of this Agreement shall be effective
unless signed in writing by the party entitled to the benefit thereof, provided
that notice of any such waiver shall be given to each party hereto as set forth
below. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of each of the Issuers and the Initial Purchaser. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to
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any departure by the Issuers or the Initial Purchaser from the terms of any
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the Issuers
in any case shall entitle the Issuers to any other or further notice or demand
in similar or other circumstances.
15. Information Supplied by the Initial Purchaser. The
statements set forth in the last paragraph on the front cover page of the Final
Memorandum; the last two sentences of the third paragraph; the fifth paragraph;
the third and fourth sentences of the sixth paragraph; and the second, third,
fourth and last sentences of the final paragraph in each case under the heading
"Plan of Distribution" in the Final Memorandum (to the extent such statements
relate to the Initial Purchaser) constitute the only information furnished by
the Initial Purchaser to the Issuers for purposes of Section 8 hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Joint and Several Obligations. All of the obligations of
the Issuers hereunder shall be joint and several obligations of each of them.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this Agreement shall constitute a binding agreement among the
Issuers and the Initial Purchaser.
Very truly yours,
PEN HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Guarantors:
THE ELK HORN COAL CORPORATION
PEN COAL CORPORATION
MARINE TERMINALS INCORPORATED
RIVER MARINE TERMINALS, INC.
PEN COTTON COMPANY OF SOUTH CAROLINA
PEN HARDWOOD COMPANY
PEN COTTON COMPANY
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CIBC XXXXXXXXXXX CORP.
By: /s/ XXXXX XXXXXXX
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
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Exhibit A-1
Majority-Owned Subsidiaries
Name Jurisdiction of Formation
---- -------------------------
The Elk Horn Coal Corporation West Virginia
Pen Coal Corporation Tennessee
Marine Terminals Incorporated Missouri
River Marine Terminals, Inc. West Virginia
Pen Cotton Company of South Carolina South Carolina
Pen Hardwood Company Tennessee
Pen Cotton Company Tennessee
Buck Coal, Inc. Virginia
The Elk Horn Corporation West Virginia
Ram Processing, Inc. West Virginia
Big River Mining Company Kentucky
Pen Sales Company, Inc. U.S. Virgin Islands
Pen Trading Company Tennessee
Pen Cotton Company of Alabama, Inc. Alabama
39
Exhibit A-2
Minority Interests
Name Jurisdiction of Formation
---- -------------------------
International Marine Terminal a Louisiana partnership
Osceola Products
40
Exhibit B
Form of Opinion of Xxxxxxxx Xxxxxxxxx
Opinion, dated the Closing Date and addressed to the Initial
Purchaser, of Xxxxxxxx Ingersoll Professional Corporation, counsel to the
Issuers, to the effect that:
(i) The Company has been duly incorporated and each of the
Company and the Subsidiaries is validly existing in good standing as a
corporation under the laws of its jurisdiction of incorporation, with
the requisite corporate power and authority to own its properties and
conduct its business as now conducted as described in the Final
Memorandum and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; to the best knowledge
of such counsel, except as set forth in Exhibit A to the Purchase
Agreement, the Company does not have any subsidiaries or own directly
or indirectly any of the capital stock or other equity or long-term
debt securities of or have any equity interest in any other person; all
of the outstanding shares of capital stock of the Company and the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, to the best of such counsel's knowledge,
were not issued in violation of any preemptive or similar rights and,
in the case of Subsidiary capital stock, are owned free and clear of
all liens, encumbrances, equities and restrictions on transferability
(except as set forth in the Final Memorandum and other than those
imposed by the Securities Act and the state securities or "Blue Sky"
laws) or voting; except as set forth in the Final Memorandum, all of
the outstanding shares of capital stock of the Subsidiaries are owned,
directly or indirectly, by the Company.
(iii) Except as set forth in the Final Memorandum, to the best
of such counsel's knowledge, no options, warrants or other rights to
purchase from the Company or any Subsidiary,
41
agreements or other obligations of the Company or any Subsidiary to
issue or other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in
the Company or any Subsidiary are outstanding and no holder of
securities of the Company or any Subsidiary is entitled to have such
securities registered under the Registration Statement; and except as
set forth in the Final Memorandum, to the best knowledge of such
counsel there is no agreement, understanding or arrangement among the
Company or any Subsidiary and each of their respective stockholders or
any other person relating to the ownership or disposition of any
capital stock of the Company or any Subsidiary or the election of
directors of the Company or any Subsidiary or the governance of the
Company's or any Subsidiary's affairs, and, if any, such agreements,
understandings and arrangements will not be breached or violated as a
result of the execution and delivery of, or the consummation of the
transactions contemplated by, the Purchase Agreement and the other
Basic Documents or the consummation of the Transactions.
(iv) Each of the Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Securities, the Exchange Notes (as defined in the Registration Rights
Agreement) and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by
the Company for issuance and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and, in the case the Notes, delivered to and paid for by the
Initial Purchaser in accordance with the terms of the Purchase
Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms; the Guarantees endorsed on the
Notes and the guarantees to be endorsed on the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by
each of the Guarantors and, when the Notes are executed by the Company
and authenticated by the Trustee in accordance with the provisions of
the Indenture, and delivered to and paid for by the Initial Purchaser
in accordance with the terms of the Purchase Agreement, will have been
duly executed, issued and delivered and will constitute valid and
legally binding obligations of the
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Guarantors, entitled to the benefits of the Indenture and enforceable
against the Guarantors in accordance with their terms.
(v) Each of the Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly and validly authorized by the
Issuers and meets the requirements for qualification under the Trust
Indenture Act, and, when executed and delivered by the Issuers
(assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms.
(vi) Each of the Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by the Issuers.
(vii) Each of the Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed and
delivered by the Issuers, will constitute a valid and legally binding
agreement of the Issuers. The Securities, the Indenture and the
Registration Rights Agreement conform in all material respects to the
descriptions thereof in the Final Memorandum.
(viii) Each of the Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under New
Credit Facility. The New Credit Facility been duly and validly
authorized by the Issuers party thereto and, when executed and
delivered by the Issuers party thereto, and assuming the due
authorization, execution and delivery by and enforceability against all
parties thereto other than the Issuers party thereto, will constitute
valid and legally binding agreements of the Issuers party thereto,
enforceable against such of the Issuers in accordance with their terms.
The New Credit Facility conforms in all material respects to the
description thereof in the Final Memorandum.
(ix) To the best knowledge of such counsel, no consent,
approval, authorization, license, qualification, exemption
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or order of any court or governmental agency or body or third party is
required for the performance by the Issuers of the Purchase Agreement,
the Registration Rights Agreement, the Securities or the Indenture or
for the consummation by the Issuers of any of the transactions
contemplated thereby, or the application of the proceeds of the
issuance of the Securities as described in the Final Memorandum, except
as has already been acquired or as may be required under state
securities or "Blue Sky" laws in connection with the purchase and
distribution of the Securities by the Initial Purchaser (as to which
such counsel need express no opinion), except for the filing of a
registration statement under the Securities Act and qualification of
the Indenture under the Trust Indenture Act of 1939, as amended, in
connection with the Registration Rights Agreement, and except where the
failure to obtain any such consent, approval, authorization, license,
qualification, exemption or order would not have a Material Adverse
Effect; to the best knowledge of such counsel, all such consents,
approvals, authorizations, licenses, qualifications, exemptions and
orders set forth in the Final Memorandum which are required to be
obtained by the Closing Date have been obtained or made, as the case
may be, and are in full force and effect and not the subject of any
pending or threatened attack by appeal or direct proceeding or
otherwise.
(x) The execution, delivery and performance by the Issuers
of the Purchase Agreement, the Registration Rights Agreement, the
Securities and the Indenture and the consummation by the Issuers of the
transactions contemplated thereby and by the Final Memorandum and the
fulfillment by the Issuers of the terms thereof will not (a) violate,
conflict with or constitute or result in a breach of or a default under
(or an event that, with notice or lapse of time, or both, would
constitute a breach of or a default under) any of (i) the terms or
provisions of any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate or agreement or instrument identified by the Company to
such counsel as a material document (collectively, the "Documents") to
which any of the Company or the Subsidiaries is a party or to which any
of their respective properties or assets are subject, (ii) the
certificate of incorporation or bylaws of any of the Company or the
Subsidiaries (or similar organizational document) or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws) any
statute, judgment, decree,
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order, rule or regulation of any court or governmental agency or other
body applicable to the Company or the Subsidiaries or any of their
respective properties or assets or (b) result in the imposition of any
lien upon or with respect to any of the properties or assets now owned
or hereafter acquired by the Company or any of the Subsidiaries, which
violation, conflict, breach, default or lien would, individually or in
the aggregate, have a Material Adverse Effect.
(xi) Except as described in the Final Memorandum, to the best
knowledge of such counsel, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, governmental or
otherwise, that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge the Transactions or the issuance or sale of the
Securities or the application of the proceeds therefrom or the other
transactions described in the Final Memorandum.
(xii) To the best knowledge of such counsel, none of the
Company or the Subsidiaries has received any notice of infringement of
or conflict with (or knows of any such infringement of or conflict
with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how that, if
such assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(xiii) None of the execution, delivery or performance of the
Purchase Agreement, the issuance or sale of the Securities, or the
application of the proceeds of the Securities as described in the Final
Memorandum will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(xiv) None of the Company or the Subsidiaries is, or
immediately after the Closing Date will be, required to register as an
"investment company" or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(xv) No securities of any Issuer are of the same class
(within the meaning of Rule 144A under the Securities Act) as the
Securities and listed on a national securities exchange registered
under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
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(xvi) The statements set forth under the captions "Risk
Factors--Reliance on Long-Term Sales Contracts," "Risk Factors--Impact
of Clean Air Act Amendments on Coal Consumption," "Risk
Factors--Adequacy of Coal Industry Retiree Health Benefits Reserves,"
"Business--Long Term Coal Sales Contracts," "Description of Capital
Stock," "Description of New Credit Facility," "Description of the
Notes" and "Exchange Offer; Registration Rights" in the Final
Memorandum, insofar as such statements purport to summarize legal
documents, are fair summaries of the documents so summarized and,
insofar as such statements are summaries of matters of law or legal
conclusions, are accurate summaries in all material respects.
(xvii) Assuming the accuracy of the factual matters contained
in the representations of each of the Issuer, and of the Initial
Purchaser in the Purchase Agreement, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial
Purchaser under the Purchase Agreement or in connection with the
initial resale of the Securities by the Initial Purchaser in accordance
with Section 9 of the Purchase Agreement (i) to register the Securities
under the Securities Act or (ii) to qualify the Indenture under the
Trust Indenture Act, it being understood that no opinion is expressed
as to any subsequent resale of any of the Securities.
Such counsel shall additionally state that in its capacity as
counsel to the Issuers, it has participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants for the Issuers and representatives of the Initial Purchaser at
which the contents of the Final Memorandum and related matters were discussed
and, although it is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except as indicated in clause (xvi) above) and has not made any
independent check or verification thereof, on the basis of the foregoing
(relying as to materiality to a large extent upon the statements of officers and
other representatives of the Issuers) no facts have come to its attention that
have caused it to believe that the Final Memorandum as of its date and as of the
date hereof, or any amendment or supplement thereto as of its date and as of the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel
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need express no opinion on the financial statements or other financial and
statistical data included in the Final Memorandum).
Such opinions may contain qualifications as to enforceability
that are typical in an opinion of this type. In addition, in rendering such
opinions, such counsel may state that, (i) its opinions are limited to and
concern only the internal laws of the Commonwealths of Pennsylvania and Kentucky
and the State of New York, the corporate laws of Delaware and the laws of the
United States, without regard to conflict or choice of law provisions, in each
case as they currently exist, (ii) it is relying as to matters of fact, to the
extent that it deems proper, on certificates of executive officers of the
Company and of public officials, (iii) it is relying, as to corporate matters of
jurisdictions other than West Virginia, Missouri and Kentucky, solely on one or
more opinions of local counsel and (iv) it is assuming, with the consent of the
Initial Purchaser, that the corporate laws of the States of Missouri and West
Virginia are the same as the corporate laws of the State of Delaware. To the
extent that such counsel relies solely on the certificates and opinions set
forth in clauses (ii) and (iii) of this paragraph, such counsel shall further
state that nothing has come to such counsel's attention that would lead them to
believe that such certificates, documents, other information and opinions state
incorrect information or fail to state correct information necessary for such
counsel to render its opinions.
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