Exhibit 4.1(e)
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XXXXXX MEDIA CORP.
$--------------
__ Units Consisting of __% Senior Secured Notes due 2003
with
Warrants to Purchase _______ Shares of Common Stock
PURCHASE AGREEMENT
February __, 1998
NatWest Capital Markets Limited
000 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
The undersigned hereby confirms its agreement with you (the "Initial
Purchaser") as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, Xxxxxx Media Corp., a Delaware corporation (the "Company"), proposes
to issue and sell to the Initial Purchaser ___ Units (the "Units"), each Unit
consisting of $1,000 principal amount of ___% Senior Secured Notes due 2003 (the
"Notes") and ___ Warrants (the "Warrants"), each to purchase ___ Shares of
Common Stock, par value $0.01 per share (the "Common Stock"), to be issued upon
exercise of the Warrants (the "Warrant Shares") representing in the aggregate
___% of the outstanding Common Stock of the Company on a fully diluted basis.
The Units, the Notes and the Warrants are referred to herein collectively as the
"Securities".
The Units will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Act"), in
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reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated January 21, 1998 (the
"Preliminary Memorandum") and will prepare a final offering memorandum dated
February __, 1998 (the "Final Memorandum"; the Preliminary Memorandum and the
Final Memorandum each herein being referred to as the "Memorandum") setting
forth or including a description of the terms of the Units, the Notes and the
Warrants, the terms of the offering of the Units, a description of the Company
and any material developments relating to the Company occurring after the date
of the most recent historical financial statements included therein.
The Company and the Initial Purchaser will enter into a Registration
Rights Agreement (the "Registration Rights Agreement") prior to or concurrently
with the issuance of the Units. Pursuant to the Registration Rights Agreement,
under the circumstances and the terms set forth therein, the Company will agree
to file with the Securities and Exchange Commission (the "Commission"): (i) a
registration statement on Form S-4 (the "Exchange Offer Registration Statement")
relating to a registered Exchange Offer (as defined in the Registration Rights
Agreement) for the Notes under the Act to offer to the holders of the Notes the
opportunity to exchange their Notes for an issue of notes substantially
identical to the Notes (except that (a) interest thereon will accrue from the
last date on which interest was paid on the Notes, or if no such interest has
been paid, from August 1, 2000, (b) such Notes will not contain restrictions on
transfer, and (c) such Notes will not contain provisions relating to an increase
in their interest rate under certain circumstances) that would be registered
under the Act (the "Exchange Notes"); or (ii) alternatively, in the event that
applicable interpretations of the Commission do not permit the Company to effect
the Exchange Offer or do not permit any holder of the Notes to participate in
the Exchange Offer, a shelf registration statement (the "Shelf Registration
Statement") to cover resales of Notes by such holders who satisfy certain
conditions, including the provision of information in connection with the Shelf
Registration Statement.
The Company also will enter into (i) a Registration Rights Agreement
with respect to the Warrant Shares, whereby the Company will agree to include
the Warrant Shares in any registration statement relating to the Common Stock
(the "Warrant Registration Rights Agreement"), (ii) a Unit Agreement (the "Unit
Agreement") and (iii) a Warrant Agreement (the "Warrant Agreement"), in each
case with United States Trust Company of New York as unit agent (the "Unit
Agent") and as warrant agent (the "Warrant Agent"), as the case may be, prior
to, or concurrently with, the issuance of the Units.
2. Representations and Warranties. The Company represents and
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warrants to, and agrees 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, in the case of the Final Memorandum and any amendment or
supplement thereto, at all times subsequent thereto up to the Closing Date
(as defined in Section 3 below) contained or shall contain any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 2(a) do not apply
to statements or omissions made in reliance upon and in conformity with
information 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. The Final Memorandum conforms in all
material respects to the requirements of the Act and the rules and
regulations promulgated thereunder as if it was a prospectus filed as part
of a registration statement on Form S-3 relating to the Securities (except
that such a prospectus would include the following specified under the
rules and regulations of the Securities Act: (i) a Pricing Table; (ii) an
"Additional Information" section; (iii) an "Incorporation by Reference"
section; and (iv) certain indemnification provisions.)
(b) As of the Closing Date, the Company will have the authorized and
issued capital stock set forth in the Final Memorandum under the "Pro
Forma" column under the caption "Capitalization"; all of the outstanding
shares of capital stock of the Company as of the Closing Date will be duly
authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive rights; except as set forth in
the Final Memorandum, there are no outstanding (i) options, warrants or
other rights to purchase from the Company, (ii) agreements or other
obligations of the Company to issue or (iii) other rights to convert any
obligation into, or exchange any securities of, shares of capital stock
of, or other equity securities for, the Company. The Company does not own,
directly or indirectly, any capital stock or any other equity or debt
securities or have any equity interests in any firm, partnership, joint
venture, limited liability company or other entity.
(c) The Company has been duly incorporated, is validly existing and
is in good standing as a corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and authority to own its
properties and conduct its business as now conducted, and as described in
the Final Memorandum; the Company 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
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otherwise), prospects or results of operations of the Company (any such
event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes. The Notes,
when issued, will be in the form contemplated by the Indenture. The Notes
have been duly and validly authorized by the Company, and when executed
and delivered by the Company and authenticated by the Trustee in
accordance with the provisions of the Indenture and when delivered to and
paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company (assuming
due authorization, execution and delivery of the Indenture by the
Trustee), will entitle the Initial Purchaser to the benefits of the
Indenture and will be enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium,
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at
law).
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture has been duly
and validly authorized, executed and delivered by the Company and will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(f) The Exchange Notes and the Private Exchange Notes (as defined in
the Registration Rights Agreement) have been duly and validly authorized
by the Company and, when the Exchange Notes have been duly executed and
delivered by the Company and authenticated by the Trustee in accordance
with the terms of the Registration Rights Agreement and the Indenture,
will constitute valid and legally binding obligations of the Company, will
entitle the holder to the benefits of the Indenture, and will be
enforceable against the Company in accordance with their terms (assuming
due authorization, execution and delivery of the Indenture by the
Trustee), except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at
law).
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(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under each of the
Registration Rights Agreement, the Warrant Registration Rights Agreement,
the Unit Agreement and the Warrant Agreement. Each of such agreements has
been duly and validly authorized by the Company, and when executed and
delivered by the Company, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization fraudulent conveyance, moratorium,
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at
law), and subject to the limitations of federal and state securities laws
and public policy considerations as to any rights to indemnity or
contribution thereunder.
(h) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under each of (i) the Pledge
Agreement, to be dated the Closing Date, whereby the Company would pledge
all of its Pledged Securities (as defined in such agreement) to United
States Trust Company of New York, in its capacity as collateral agent (the
"Collateral Agent") for the benefit of the holders of the Notes (the
"Pledge Agreement") and (ii) the Security Agreement (including any
agreements granting a security interest in intellectual property), to be
dated the Closing Date, whereby the Company, grants a security interest in
all of the Collateral (as defined in such agreement) owned by it to the
Collateral Agent for the benefit of the holders of the Notes (the
"Security Agreement" and, together with the Pledge Agreement the "Security
Documents"). Each of the Security Documents has been duly and validly
authorized by the Company, and when executed and delivered by the Company,
constitutes a valid and legally binding agreement of the Company
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(i) The Units have been duly authorized by the Company and, when
issued and delivered by the Company against payment therefor by the
Initial Purchaser in accordance with the terms of this Agreement and
countersigned by the Unit Agent, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at
law).
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(j) The Warrants have been duly authorized by the Company and, when
issued and delivered by the Company and countersigned by the Warrant Agent
in accordance with the terms of this Agreement and the Warrant Agreement,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(k) The Warrant Shares have been duly and validly authorized and
validly reserved for issuance and when issued and paid for upon exercise
of the Warrants in accordance with the terms thereof, will be validly
issued, fully paid, nonassessable and free of preemptive rights.
(l) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law), and subject to the
limitations of federal and state securities laws and public policy
considerations as to any rights to indemnity or contribution thereunder.
(m) No consent, approval, authorization or order of any court or
governmental agency or body or third party is required for the execution,
delivery or performance by the Company of this Agreement, the Registration
Rights Agreement, the Warrant Registration Rights Agreement, the Unit
Agreement, the Warrant Agreement, the Indenture, the Securities and the
Security Documents or the consummation by the Company of the transactions
contemplated hereby or thereby that are to be completed on or before the
Closing Date, except such as have been obtained or disclosed in the Final
Memorandum and such as may be required under state securities or "Blue
Sky" laws. The Company is not (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 respective properties or assets,
or (iii) in breach of or in default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a default
under) or in violation of any of the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate, contract or other
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agreement or instrument to which it is a party or to which it or its
properties or assets is subject (collectively, "Contracts") except in the
case of clauses (ii) and (iii) above such violations, breaches or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(n) The execution, delivery and performance by the Company of this
Agreement, the Indenture, the Securities, the Registration Rights
Agreement, the Warrant Registration Rights Agreement, the Unit Agreement,
the Warrant Agreement and the Security Documents and the consummation by
the Company of the transactions contemplated hereby and thereby, and the
fulfillment of the terms hereof and thereof, and the retention by the
Company of NatWest Capital Markets Limited ("NatWest") pursuant to those
certain letter agreements (including the engagement and indemnity letter
agreements) dated January 9, 1998 (collectively, the "NatWest Engagement
Letter") and NatWest's acting as contemplated hereby and thereby, will not
conflict with or constitute or result in a breach of or a default under
(or an event which with notice or passage of time or both would constitute
a default under) or violation of any of (i) the terms or provisions of any
Contract except such conflicts, breaches, defaults or violations, that
would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or by-laws (or similar
organizational document) of the Company, or (iii) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of its
respective properties or assets except such conflicts, breaches, defaults
or violations that would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) The financial statements of the Company included in the
Preliminary Memorandum and the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of the Company at the dates and for the periods to which they relate
and have been prepared in accordance with generally accepted accounting
principles in the United States applied on a consistent basis except as
otherwise stated therein. The summary and selected financial and
statistical data in the Preliminary Memorandum and the Final Memorandum
present fairly in all material respects the information shown therein and
have been prepared and compiled on a basis consistent with the financial
statements included therein, except as otherwise stated therein. McGladrey
& Xxxxxx, LLP is an independent public accounting firm within the meaning
of the Act and the rules and regulations promulgated thereunder.
(p) Except as noted in the Memorandum, the pro forma financial
information included in the Preliminary Memorandum and the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, and (iii) have been properly
computed on the bases described therein; the
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assumptions used in the preparation of the pro forma financial data and
other pro forma financial information included in the Preliminary
Memorandum and the Final Memorandum are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein. The financial projection information
included in the Preliminary Memorandum and the Final Memorandum are based
on good faith estimates and assumptions believed by the Company to be
reasonable as of the date hereof and as of the Closing Date.
(q) Except as noted in the Memorandum, there is not, to the
knowledge of the Company, pending or threatened, any action, suit,
proceeding, inquiry, investigation or legislative mandate to which the
Company is a party, or to which the property or assets of the Company is
subject, before or brought by any court, arbitrator or governmental agency
or body which is reasonably likely to, individually or in the aggregate,
have a Material Adverse Effect or which seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other
transactions described in the Preliminary Memorandum and the Final
Memorandum.
(r) The Company owns or possesses adequate licenses or other rights
to use all material patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by it as described in the Preliminary Memorandum
and the Final Memorandum, except where the failure to own or possess the
same would not, individually or in the aggregate, have a Material Adverse
Effect, and the Company has not received any notice of infringement of (or
knows of any such infringement of) asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights or
know-how which, if such assertion of infringement were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(s) The Company possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made
all declarations and filings with, all federal, state, provincial, 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 businesses as now or proposed to be conducted as described in
the Preliminary Memorandum and the Final Memorandum (collectively, the
"Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, have a Material Adverse Effect or where
any Permits would be required only in connection with the Company's
expansion into new geographical areas; provided, however, that any such
Permits will be acquired when required by applicable law; the Company 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
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rights of the holder of any such Permit except where such revocation,
termination or impairment would not, individually or in the aggregate,
have a Material Adverse Effect; and the Company has not 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.
(t) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) the Company has
not incurred any liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or contracts
(written or oral) which are not in the ordinary course of business and
which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the general affairs,
management, business, condition (financial or otherwise), prospects or
results of operations of the Company (a "Material Change"), (ii) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock, (iii) other than as described in the Final
Memorandum, there have been no changes in the capital stock or long-term
indebtedness of the Company which would, individually or in the aggregate,
constitute a Material Change.
(u) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, management, business, condition, (financial or
otherwise), prospects or results of operations of the Company from that
set forth in the Preliminary Memorandum and the Final Memorandum.
(v) The Company has filed all federal income tax returns and all
other material tax returns, domestic and foreign, required to be filed by
it and has paid all material taxes and assessments payable by it which
have become due, except for those contested in good faith and adequately
disclosed and fully provided for on the financial statements of the
Company in accordance with generally accepted accounting principles
("GAAP"). The Company has at all times paid, or have provided adequate
reserves (in the good faith judgment of the management of the Company) for
the payment of, all federal, state and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to date. There is
no material action, suit, proceeding, investigation, audit, or claim now
pending or, to the knowledge of the Company, threatened by any authority
regarding any taxes relating to the Company. The Company has not entered
into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Company or is aware of any circumstances that
would cause the taxable years or other taxable periods of the Company not
to be subject to the normally applicable statute of limitations.
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(w) The statistical and market-related data included in the
Preliminary and the Final Memorandum are based on or derived from sources
which the Company believes to be reliable and accurate.
(x) Neither the Company nor any agent acting on any of its behalf
has taken or will take any action that might cause this Agreement or the
sale of the Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or as
the same may hereafter be in effect, on the Closing Date.
(y) The Company has good, sufficient and legal title to all real
property and good title to all personal property described in the
Preliminary Memorandum and the Final Memorandum as being owned by it and
good, sufficient and legal title to any leasehold estate in the real and
personal property described in the Preliminary Memorandum and the Final
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Preliminary
Memorandum and the Final Memorandum or to the extent the failure to have
such title or the existence of such liens, charges, encumbrances or
restrictions would not, individually or in the aggregate, have a Material
Adverse Effect.
(z) There are no legal or governmental proceedings involving or
affecting the Company or any of its properties or assets which would be
required to be described in a prospectus forming part of a registration
statement filed with the Commission pursuant to the Act that are not
described in the Preliminary Memorandum and the Final Memorandum.
(aa) Except as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect (A) the Company is
in compliance with and not subject to liability under applicable
Environmental Laws (as defined below), (B) the Company has made all
filings and provided all notices required under any applicable
Environmental Laws, and has and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in full force
and effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or,
to the knowledge of the Company, threatened against the Company 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,
(E) the Company has not received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or
any comparable state law, (F) no property or facility of the Company is
(i) listed or proposed for listing on the National Priorities List under
CERCLA or is (ii) listed in the Comprehensive Environmental Response,
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Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state, provincial and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions, discharges,
releases or threatened releases of hazardous materials, into the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials, and (iii) underground and
above ground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(bb) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company which is pending or, to the knowledge of
the Company, threatened.
(cc) The Company carries insurance in such amounts and covering such
risks as is commercially reasonable in light of its business and the value
of its properties. The Company has not received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance.
(dd) The Company has no material liability for any prohibited
transaction (within the meaning of Section 4975(c) of the Internal Revenue
Code of 1986, as amended (the "Code") or Part 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (or an
accumulated funding deficiency within the meaning of Section 412 of the
Code or Section 302 of ERISA) or any complete or partial withdrawal
liability (within the meaning of Section 4201 of ERISA) with respect to
any pension, profit sharing or other plan which is subject to ERISA, to
which the Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant. With respect to
such plans, the Company is in compliance in all material respects with all
applicable provisions of ERISA.
(ee) The Company (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
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reported accountability for its assets is compared with existing assets at
reasonable intervals.
(ff) The Company will not be an "investment company" or "promoter"
or "principal underwriter" for an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder.
(gg) The Notes, the Exchange Notes, the Registration Rights
Agreement, Warrant Registration Rights Agreement, the Indenture, the
Units, the Unit Agreement, the Warrants, the Warrant Shares and the
Warrant Agreement will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(hh) Except as may be provided by the agreements set forth on
Schedule I attached hereto, no holder of securities of the Company 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 or Warrant Registration Rights Agreement
other than as expressly permitted thereby.
(ii) Neither the Company nor any of its respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any "security" (as defined in the Act)
which is or could be integrated with the sale of the Securities in a
manner that would require the registration under the Act of the Securities
or (ii) engaged in any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) in connection with
the offering of the Securities or in any manner involving a public
offering within the meaning of Section 4(2) of the Act. The Company has
not distributed and will not distribute any offering material in
connection with the offering of the Units other than the Final Memorandum
and any Preliminary Memorandum. No securities of the same class as any of
the Securities have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(jj) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 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 Act or, in the case of the Notes, to
qualify the Indenture under the TIA.
(kk) No Securities are of the same class (within the meaning of Rule
144A as promulgated under the Act ("Rule 144A")) as the securities of the
Company listed on a national securities exchange registered under Section
6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or quoted in a U.S. automated inter-dealer quotation system.
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(ll) The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of any
of the Securities.
(mm) Neither the Company nor any person acting on any of its behalf
(other than the Initial Purchaser) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Act
("Regulation S")) with respect to any of the Securities; the Company and
its respective Affiliates and any person acting on any of their behalf
(other than the Initial Purchaser or any Affiliate of the Initial
Purchaser) have complied with the offering restrictions requirement of
Regulation S.
(nn) Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date, contains all of the information that, if requested
by a prospective purchaser of any of the Securities, would be required to
be provided to such prospective purchaser pursuant to Rule 144A(d)(4)
under the Act.
(oo) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(pp) Neither the Company nor, to the Company's knowledge, any
officer or director purporting to act on behalf of the Company has at any
time: (i) made any contributions to any candidate for political office, or
failed to disclose fully any such contributions, in violation of law, (ii)
made any payment of funds to, or received or retained any funds from, any
state, federal or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977,
(iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment or (v) engaged in any transaction, maintained any bank
account or used any corporate funds except for transaction, bank accounts
and funds which have been and are reflected in the normally maintained
books and records of the Company.
(qq) Except as disclosed in any Memorandum, there are no material
outstanding loans or advances or material guarantees of indebtedness by
the Company to or for the benefit of any of the officers or directors of
the Company or any of the members of the families of any of them.
(rr) Neither the Company nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(ss) The Company has not engaged or retained any person, other than
NatWest, to act as a financial advisor, underwriter or placement agent in
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connection with the issuance of any of the Securities and, except for the
fees and expenses payable in connection with the issuance of the
Securities as described in the Final Memorandum, no person has the right
to receive a material amount of financial advisory, underwriting,
placement, finder's or similar fees in connection with, or as a result of,
the issuance of the Securities and the purchase of the Securities by
NatWest or the consummation of the other transactions contemplated hereby.
(tt) On and after the Closing Date, each of the Security Documents
will create, as security for the Notes purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of
the Collateral subject thereto, superior to and prior to the rights of all
third Persons other than Persons with Permitted Liens and subject to no
other Liens (except Permitted Liens (as defined in Final Memorandum)), in
favor of the Collateral Agent for the benefit of the holders of the Notes.
No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or
recordings (i) required in connection with any such Security Document
(other than the Pledge Agreement) which shall have been made upon or prior
to (or are the subject of arrangements, reasonably satisfactory to the
Collateral Agent, for filing on or promptly after the date of) the
execution and delivery thereof and (ii) that are required by this
Agreement or the relevant Security Document to be made thereafter.
(uu) The Company is not a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Internal
Revenue Code of 1986, as amended.
(vv) On the Closing Date, the outstanding Common Stock of the
Company on a fully diluted basis (assuming the conversion of the Series A
Preferred Stock, the Series B Preferred Stock and the Series C Preferred
Stock and the exercise of all outstanding warrants and options) prior to
the issuance of the Warrants is _______ shares and the Warrant Shares
constitute 20% of the Common Stock on a fully diluted basis.
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, Units at a price of $______ per Unit. Based on its
determination of the relative fair market values of the Notes and the Warrants,
the Company intends to treat $ __________ of the issue price of a Unit as
allocable to the Note included in such Unit and $ _________ as allocable to the
Warrant included in such Unit. One or more certificates in definitive form for
the Units 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
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Date, shall be delivered by or on behalf of the Company to the Initial
Purchaser, against payment by or on behalf of the Initial Purchaser of the
purchase price therefor by wire transfer of same day funds to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Securities shall be made at the offices of White & Case,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX at 10:00 A.M., New York time, on
February __, 1998, or at such other place, time or date as the Initial
Purchaser, on the one hand, and the Company, on the other hand, 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
Units available for inspection and packaging by the Initial Purchaser at such
place as designated by the Initial Purchaser 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 Units 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. Covenants of the Company. The Company covenants and agrees with
the Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchaser shall not have consented, which consent shall
not be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Final Memorandum that
may be necessary or advisable in connection with the resale of the
Securities by the Initial Purchaser.
(b) The Company 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; provided, however, that in connection therewith, the Company
shall not be required to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction or subject
itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not now so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchaser of the Units, any event occurs or information
becomes known as a result of which the Final Memorandum as then amended or
supplemented would, in the judgment of the Company or in the reasonable
opinion of counsel for the
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Initial Purchaser include any untrue statement of a material fact, or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or supplement
the Final Memorandum to comply with applicable law, the Company will
promptly notify the Initial Purchaser thereof and will prepare, at the
expense of the Company, an amendment or supplement to the Final Memorandum
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) The Company will furnish to the Initial Purchaser copies of all
reports and other communications (financial or otherwise) furnished by the
Company to the Trustee, the holders of the Notes, the Unit Agent, the
Warrant Agent, the holders of the Warrants or holders of the Warrant
Shares and, as soon as available, copies of any reports or financial
statements furnished to or filed by the Company with the Commission or any
national securities exchange on which any class of securities of the
Company may be listed.
(g) The Company will furnish to the Initial Purchaser, as soon as
they have been prepared, and so long as the Securities are outstanding, a
copy of (i) the audited financial statements for each fiscal year of the
Company commencing with the Company's fiscal year ended December 31, 1997
and (ii) any unaudited interim financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(h) Neither the Company nor any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale
of any of the Securities in a manner which would require the registration
under the Act of any of the Securities.
(i) The Company will not engage in any form of "general
solicitation" or "general advertising" (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering of the Securities
within the meaning of Section 4(2) of the Act.
(j) Neither the Company nor its Affiliates nor any person acting on
any of their behalf will engage, in any directed selling efforts (as that
term is defined in
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Regulation S) with respect to the Securities to comply, and to have its
Affiliates and each person acting on its or their behalf comply, with the
offering restrictions requirements of Regulation S.
(k) For so long as any of the Securities remain outstanding, the
Company will make available, upon request, to any seller of Securities the
information specified in Rule 144A(d)(4) under the Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.
(l) For a period of 180 days from the date of the Final Memorandum,
the Company or any subsidiary of the Company will not offer for sale,
sell, contract to sell or otherwise dispose of, directly or indirectly, or
file a registration statement for, or announce any offer, sale, contract
for sale of or other disposition of any debt securities issued or
guaranteed by the Company or any subsidiary of the Company (other than the
Exchange Notes) without the prior written consent of the Initial
Purchaser.
(m) During the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchaser, the Company will not, and will not permit any of its affiliates
(as defined in Rule 144 under the Act) to, resell any of the Securities
that have been reacquired by them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Act.
(n) In connection with the offering of the Securities, until the
Initial Purchaser shall have notified the Company of the completion of the
resale of the Securities, the Company will not, and will cause its
affiliated purchasers (as defined in the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a beneficial
interest, any Securities, or attempt to induce any person to purchase any
Securities; and not to, and to cause its affiliated purchasers not to,
make bids or purchase for the purpose of creating actual, or apparent,
active trading in or of raising the price of the Securities.
(o) Except as contemplated by the Final Memorandum, the Company will
not take any action prior to the execution and delivery of the Indenture,
the Unit Agreement or the Warrant Agreement which, if taken after such
execution and delivery, would have violated any of the covenants contained
in the Indenture, the Unit Agreement or the Warrant Agreement.
(p) The Company will not take any action prior to the Closing Date
which would require the Final Memorandum to be amended or supplemented
pursuant to Section 5(c).
(q) Prior to the Closing Date, the Company will not issue any press
release
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or other communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Initial Purchaser
is notified), without the prior written consent of the Initial Purchaser,
unless in the judgment of the Company and its counsel, after notification
to the Initial Purchaser, such press release or communication is required
by law.
(r) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"Portal Market") and (ii) permit the Units, the Notes and the Warrants to
be eligible for clearance and settlement through the Depository Trust
Company ("DTC").
(s) The Company will pay and discharge, and will cause each of its
subsidiaries to pay and discharge when due and payable all taxes imposed
on it or on its income or profits or on any of its properties except such
taxes as are being contested in good faith in appropriate proceedings;
provided, it has maintained adequate reserves with respect thereto in
accordance with GAAP.
(t) On or prior to the Closing Date, the Company shall provide the
Initial Purchaser with a copy of a statement, issued by the Company
pursuant to U.S. Treasury Regulations Section 1.897-2(h), certifying that
the common stock of the Company is not a United States real property
interest.
6. Expenses. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchaser of copies of the foregoing
documents, (iii) the fees and disbursements of counsel, accountants and any
other experts or advisors retained by the Company, (iv) preparation (including
printing), issuance and delivery to the Initial Purchaser of the Securities, (v)
the qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and reasonable fees and disbursements of counsel for the
Initial Purchaser relating thereto, (vi) fees and expenses of the Trustee, the
Unit Agent, the Collateral Agent and the Warrant Agent (including fees and
expenses of counsel), (vii) all expenses and listing fees incurred in connection
with the application for quotation of the Notes on the PORTAL Market, (viii) all
expenses incurred in connection with the approval of the Securities for
book-entry transfer by DTC and (ix) all expenses in connection with any meeting
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with prospective investors and all other reasonable out-of-pocket expenses of
the Initial Purchaser (including, without limitation, all road show expenses)
incurred by the Initial Purchaser or any of its affiliates in connection with,
or arising out of, the offering and sale of the Securities. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 11 or
because of any failure, refusal or inability on the part of the Company to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder (other than solely by reason of a default by the Initial
Purchaser of its obligations hereunder after all conditions hereunder have been
satisfied in accordance herewith), the Company agrees to promptly reimburse the
Initial Purchaser upon demand for all out-of-pocket expenses (including all
fees, disbursements and charges of White & Case) that shall have been incurred
by the Initial Purchaser in connection with the proposed purchase and sale of
the Securities. It is agreed, however, that in the event the Initial Purchaser
shall receive a Placement Fee as contemplated by the NatWest Engagement Letter,
then the Company shall have no obligation to reimburse the Initial Purchaser for
the fees, disbursement and charges of White & Case.
7. Conditions of the Initial Purchaser's Obligations. The obligation
of the Initial Purchaser to purchase and pay for the Securities shall, in its
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxx, P.C., counsel for
the Company, in form and substance satisfactory for counsel to the Initial
Purchaser, dated the Closing Date, substantially to the effect that:
(i) The Company has been duly incorporated, is validly
existing and is in good standing as a corporation under the laws of
the State of Delaware, with all requisite corporate power and
authority to own its properties and conduct its business as
described in the Final Memorandum.
(ii) Except as set forth in the Final Memorandum, to the
knowledge of such counsel, there are no outstanding (i) options,
warrants or other rights to purchase from the Company, (ii)
agreements or other obligations of the Company to issue or (iii)
other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of, or other equity
securities of, the Company.
(iii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Notes. The Notes are in the form contemplated by the Indenture. The
Notes have been duly and validly authorized by the Company and when
executed and delivered
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by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture (assuming due authorization,
execution and delivery of the Indenture by the Trustee) and paid for
by the Initial Purchaser in accordance with the terms of this
Agreement, will constitute valid and legally binding obligations of
the Company, will entitle the holders to the benefits of the
Indenture and will be enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, indemnity and contribution or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law),
and except that such counsel need not express any opinion as to the
enforceability of the waiver as to xxxxx, extension or stay laws.
(iv) The Global Note (as such term is defined in the
Indenture) is in the form contemplated by the Indenture.
(v) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture meets the requirements for qualification
under the TIA. The Indenture has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms (assuming due authorization,
execution and delivery thereof by the Trustee), except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, indemnity and
contribution or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in
a proceeding in equity or at law), and except that such counsel need
not express any opinion as to the enforceability of the waiver as to
xxxxx, extension or stay laws.
(vi) The Exchange Notes and the Private Exchange Notes have
been duly and validly authorized by the Company, and when the
Exchange Notes have been duly executed and delivered by the Company
and authenticated by the Trustee in accordance with the terms of the
Registration Rights Agreement and the Indenture (assuming due
authorization, execution and delivery of the Indenture by the
Trustee), will constitute the valid and legally binding obligations
of the Company, will entitle the holder to the benefits of the
Indenture, and will be enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general
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equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law),
and except that such counsel need not express any opinion as to the
enforceability of the waiver as to usury extension or stay laws.
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of the Registration Rights Agreement, Warrant Registration Rights
Agreement, the Unit Agreement and the Warrant Agreement. Each of
such agreements has been duly and validly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery thereof by each of the other parties thereto)
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether
the issue of enforceability is considered in a proceeding in equity
or at law), and subject to the limitations of federal and state
securities laws and public policy considerations as to any rights to
indemnity or contribution thereunder, and subject further to the
fact that provisions for liquidated damages may be unenforceable if
they were deemed to constitute a penalty.
(viii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of the Security Documents. Each of the Security Documents has been
duly and validly authorized, executed and delivered by the Company
and (assuming the due authorization, execution and delivery thereof
by each of the other parties thereto) constitutes a valid and
legally binding agreement of the Company enforceable against it in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law), including without
limitation, concepts of materiality, reasonableness, good faith and
fair dealing.
(ix) The Units have been duly authorized, executed, issued and
delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of
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enforceability is considered in a proceeding in equity or at law).
(x) The Warrants have been duly authorized, executed, issued
and delivered by the Company and constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in
a proceeding in equity or at law).
(xi) The Warrant Shares have been duly and validly authorized
and validly reserved for issuance, and when issued and paid for upon
exercise of the Warrants in accordance with the terms thereof, will
be validly issued, fully paid, nonassessable, free of preemptive
rights as a matter of the United States federal laws, the Delaware
General Corporation Law or the New York Business Corporation Law,
and to such counsel's knowledge, free of all other preemptive
rights.
(xii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly authorized by all necessary
corporate action, and has been duly executed and delivered by the
Company.
(xiii) No consent, approval, authorization or order of any
United States federal, New York state or Delaware state court or
govern- mental agency or body is required under applicable law or,
to the knowledge of such counsel under any United States federal,
New York state or Delaware state court decree, order or regulatory
decision for the execution, delivery or performance by the Company
of this Agreement, the Registration Rights Agreement, the Warrant
Registration Rights Agreement, the Unit Agreement, the Warrant
Agreement, the Indenture, the Securities and the Security Documents
or the consummation by the Company of the transactions contemplated
hereby or thereby that are to be completed prior or on the date
hereof, except such as have been obtained or disclosed in the Final
Memorandum and such as may be required under state securities or
"Blue Sky" laws as to which such counsel need not express any
opinion. The Company is not (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document) or (ii)
in breach or violation of any statute, judgment, decree, order, rule
or regulation (of which such counsel is aware) applicable to any of
them or any of their respective properties or assets, except such
violations or breaches that would not, individually or in the
aggregate, have a Material Adverse Effect.
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(xiv) The execution, delivery and performance by the Company
of this Agreement, the Indenture, the Registration Rights Agreement,
Warrant Registration Rights Agreement, the Unit Agreement, the
Warrant Agreement, the Security Documents, and the consummation by
the Company of the transactions contemplated hereby and thereby, and
the fulfillment of the terms hereof and thereof, will not conflict
with or constitute or result in a breach of or a default under (or
an event which with notice or passage of time or both would
constitute a default under) any material contract known to us to
which the Company is a party or to which any of its assets is
subject or a violation of any of the certificate of incorporation or
by-laws (or similar organizational document) of the Company, or
(assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of representations and
warranties of the Initial Purchaser in Section 8 of the Purchase
Agreement) violate any statute, judgment, decree, order, rule or
regulation (of which such counsel is aware) applicable to the
Company or any of its properties or assets except for any such
conflicts, breaches, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
(xv) To the knowledge of such counsel, there is not pending or
threatened, any action, suit, proceeding, inquiry, investigation or
legislative mandate to which the Company is a party or to which the
property or assets of the Company is subject, before or brought by
any court, arbitrator or governmental agency or body which are
reasonably likely to, individually or in the aggregate, have a
Material Adverse Effect and would otherwise be required to be
described in a prospectus that is subject to Item 103 of Regulation
S-K under the Securities Act or which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or
sale of the Securities to be sold hereunder.
(xvi) Neither the consummation of the transactions
contemplated by this Purchase Agreement nor the sale, issuance,
execution or delivery of the Securities will violate Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.
(xvii) The Company is not nor immediately after the sale of
the Securities to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum under
the caption "Use of Proceeds") will it be an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(xviii) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
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(xix) The statements in the Final Memorandum under the caption
"Description of Capital Stock", "Description of Units," "Description
of Notes", "Description of Warrants" and "Exchange Offer and
Registration Rights," and the description in the Final Memorandum of
the Company's agreement with Southland Corporation, insofar as they
describe the provisions of the documents and instruments therein
described, constitute fair summaries thereof in all material
respects;
(xx) No registration under the Act of the Securities is
required in connection with the sale of the Securities to the
Initial Purchaser as contemplated by this Agreement and the Final
Memorandum or in connection with the initial resale of the
Securities by the Initial Purchaser in accordance with Section 8 of
this Agreement and otherwise in the manner contemplated by this
Agreement and the Final Memorandum; and prior to the commencement of
the Exchange Offer or the effectiveness of the Shelf Registration
Statement (as defined in the Registration Rights Agreement), the
Indenture is not required to be qualified under the TIA, in each
case assuming (i) that the purchasers who buy such Securities in the
initial resale thereof are qualified institutional buyers as defined
in Rule 144A promulgated under the Act ("QIBs") or accredited
investors as defined in Rule 501(a) (1), (2), (3) or (7) promulgated
under the Act ("Accredited Investors"), (ii) the accuracy of the
Initial Purchaser's representations in Section 8 hereof and those of
the Company contained in this Agreement regarding the absence of a
general solicitation or general advertising in connection with the
sale of such Securities to the Initial Purchaser and the initial
resale thereof and (iii) the due performance by the Initial
Purchaser of the agreements set forth in Section 8 hereof.
(xxi) The provisions of the Security Agreement create in favor
of the Collateral Agent a valid security interest in and to the
Collateral to which Article 9 of the Uniform Commercial Code as in
effect in the State of New York ("UCC") on the date hereof is
applicable (the "Article 9 Collateral"). When financing statements
on Form UCC-1 have been duly filed in the jurisdictions set forth on
schedule 2 attached to such opinion, such filings will result in the
perfection of the security interests in that portion of the Article
9 Collateral in which security interests are perfected under the UCC
in the jurisdictions set forth on schedule 2 attached hereto by the
filing of financing statements.
(xxii) The provisions of the Pledge Agreement, together with
delivery in the State of New York of the certificates representing
the Pledged Securities, would create in favor of the Collateral
Agent valid security interests in and to the Pledged Securities and
the Proceeds (as such terms are defined in the Pledge Agreement).
The actions specified in Section 3 of the Pledge Agreement are all
the actions necessary under the
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UCC to perfect the security interest of the Collateral Agent in the
Pledged Securities. Assuming the Collateral Agent acquires its
interest in the Pledged Securities in good faith and without notice
of any adverse claims and that each certificate evidencing shares of
Pledged Securities is either in bearer form or registered form,
issued or indorsed in the name of the Collateral Agent or in blank,
the Collateral Agent would acquire its security interest in the
Pledged Securities free of adverse claims.
(xxiii) The statements contained in the Memorandum under the
caption "Certain United States Federal Tax Consequences," to the
extent that they constitute matters of U.S. federal tax law and
legal conclusions with respect thereto, are correct in all material
respects.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or the United States, the General Corporation Law of the State
of Delaware or the New York Uniform Commercial Code, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchaser and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials, and may assume that the laws
of the State of New York are substantially similar to the laws of those
states listed on Schedule 2 attached to such opinion.
In addition to the foregoing, such counsel shall state that is has
participated in conferences with directors, executive officers and other
representatives of the Company, representatives of the Company's
independent public accountants, representatives of the Initial Purchaser
and counsel for the Initial Purchaser at which conferences the contents of
the Final Memorandum and related matters were discussed, and although such
counsel has not independently verified and has not passed upon or assumed
any responsibility for the accuracy, completeness or fairness of the
statements contained in such documents, no facts have come to such
counsel's attention to lead it to believe that the Final Memorandum and
any further amendments or supplements thereto as of their respective dates
and on the date of such opinion letter contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not express any
view with respect to the financial statements and related notes, the
financial statement schedules and the other financial, statistical and
accounting data (including projections contained therein) included in the
Final Memorandum). The opinion of Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx &
Xxxxxx, P.C. described in this Section shall be rendered to the Initial
Purchaser at the request of the Company and shall so state therein.
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(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser,
dated as of the Closing Date and addressed to the Initial Purchaser, of
White & Case LLP, counsel for the Initial Purchaser, with respect to
certain legal matters relating to this Agreement and such other related
matters as the Initial Purchaser may reasonably require. In rendering such
opinion, White & Case shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
(c) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Colombo & Xxxxxxx, P.C., in form and substance satisfactory
to counsel to the Initial Purchaser, dated the Closing Date, substantially
to the effect that:
(i) The Company has the authorized and issued shares of
capital stock set forth in the Final Memorandum; all of the
outstanding shares of capital stock of the Company as of the Closing
Date will be duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any statutory
preemptive rights under the laws of the state of Delaware; or;
except as set forth in the Final Memorandum, to such counsel's
knowledge, there are no outstanding (i) options, warrants or other
rights to purchase from the Company, (ii) agreements or other
obligations of the Company to issue or (iii) other rights to convert
any obligation into, or exchange any securities for, shares of
capital stock of, or other equity securities in, the Company.
(ii) The Company has been duly incorporated, is validly
existing and is in good standing as a corporation under the laws of
the State of Delaware with all requisite corporate power and
authority to own its properties and conduct its business as now
conducted, and as described in the Final Memorandum; the Company is
duly qualified to do business as a foreign corporation in good
standing Minnesota, Texas, Florida, Virginia, Washington, D.C. and
Maryland.
(iii) To the knowledge of such counsel, there is not pending
or, threatened, any action, suit, proceeding, inquiry or
investigation to which the Company is a party, or to which the
property or assets of the Company is subject, before or brought by
any court, arbitrator or governmental agency or body which is
reasonably likely to, individually or in the aggregate, have a
Material Adverse Effect or which seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the issuance or sale of
the Securities to be sold hereunder or the consummation of the other
transactions described in the Preliminary Memorandum and the Final
Memorandum.
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(iv) To such counsel's knowledge, except as may be provided by
the agreements set forth on Schedule I attached hereto, no holder of
securities of the Company 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 or Warrant
Registration Rights Agreement other than as expressly permitted
thereby.
(d) On the Closing Date, the Initial Purchaser shall have received
good standing certificates for the Company in those 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, individually or in the aggregate, not have a Material Adverse
Effect.
(e) On the Closing Date, the Initial Purchaser shall have received
the following documents duly authorized, executed and delivered by each of
the parties thereto, in form and substance satisfactory for counsel to the
Initial Purchaser, and containing such terms and conditions that are usual
and customary in transactions similar to those contemplated hereby and
thereby, dated the Closing Date:
(i) each of the Security Documents;
(ii) the Indenture;
(iii) the Warrant Agreement;
(iv) the Unit Agreement;
(v) the Registration Rights Agreement; and
(vi) the Warrants Registration Rights Agreement.
(f) On or prior to the Closing Date, the Company shall have filed
amendments with the Secretary of State of Delaware to the Certificates of
Designations for each of the Series B Preferred Stock and the Series C
Preferred Stock, such amendments to be in forms reasonably satisfactory to
the Initial Purchaser.
(g) On or prior to the Closing Date, the Company shall have received
consents to the transaction contemplated by this Agreement, the
Registration Rights Agreement, the Warrant Registration Rights Agreement,
the Unit Agreement, the Warrant Agreement, the Indenture and the Security
Documents from the requisite number of holders of the Series A Preferred
Stock, the Series B Preferred Stock and the Series C Preferred Stock, such
consents to be in a form reasonably satisfactory to the Initial Purchaser.
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(h) On the Closing Date, the Initial Purchaser shall have received
(i) proper financing statements (Form UCC-1) or such other financing
statements or similar notices as shall be required by local law fully
executed for filing under the appropriate filing offices of each
jurisdiction as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be granted
by the Security Documents and evidence of the completion of all other
recordings; (ii) filings of, or with respect to, such Security Documents
as may be necessary or, in the opinion of the Collateral Agent, desirable
to perfect the security interests intended to be created by such Security
Documents and (iii) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security Documents have
been taken or acceptable arrangements to effect such actions have been
taken.
(i) The Initial Purchaser shall have received from McGladrey &
Xxxxxx, LLP comfort letters dated the date hereof and the Closing Date, in
form and substance satisfactory to counsel for the Initial Purchaser,
which describe the procedures as the Initial Purchaser may request and
McGladrey & Xxxxxx, LLP is willing to perform and report upon.
(j) The representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the date hereof and
on and as of the Closing Date as if made on and as of the Closing Date;
the statements of the Company's officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and
correct on and as of the date made and on and as of the Closing Date; the
Company shall have performed all covenants and agreements and satisfied
all conditions on their part to be performed or satisfied hereunder at or
prior to the Closing Date; and, except as described in the Final
Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), subsequent to the date of the most recent financial
statements in such Final Memorandum, there shall have been no event or
development that, individually or in the aggregate, has had, or would be
reasonably likely to have, a Material Adverse Effect.
(k) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(l) The Notes shall have been approved by the NASD for trading in
the PORTAL Market.
(m) There shall not have occurred any invalidation of Rule 144A
under the Act by any court or any withdrawal or proposed withdrawal of any
rule or regulation under the Act or the Exchange Act by the Commission or
any amendment or proposed amendment thereof by the Commission which in the
judgment of the
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Initial Purchaser would materially impair the ability of the Initial
Purchaser to purchase, hold or effect resales of the Units as contemplated
hereby.
(n) There shall not have occurred any change, or any development
involving a prospective change, in the general business affairs, condition
(financial or otherwise), prospects or results of operations, of the
Company from that set forth in the Final Memorandum that constitutes a
Material Adverse Effect and that makes it, in the Initial Purchaser's
judgment, impracticable to market the Securities on the terms and in the
manner contemplated in the Final Memorandum.
(o) Subsequent to the date of the most recent financial statements
in the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), the conduct of the business and operations of the
Company shall not have been interfered with by strike, fire, flood,
hurricane, accident or other calamity (whether or not insured) or by any
court or governmental action, order or decree, and, except as otherwise
stated therein, the properties of the Company shall not have sustained any
loss or damage (whether or not insured) as a result of any such
occurrence, except any such interference, loss or damage which would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) No securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(q) The Initial Purchaser shall have received certificates of the
Company, dated the Closing Date, signed by its Chairman of the Board and
Chief Executive Officer, to the effect that:
(i) The representations and warranties of the Company
contained in this Agreement, the Registration Rights Agreement, the
Warrant Registration Rights Agreement, the Unit Agreement, the
Warrant Agreement and the Security Documents are true and correct as
of the date hereof and as of the Closing Date, and the Company has
performed all covenants and agreements and satisfied all conditions
on their part to be performed or satisfied hereunder at or prior to
the Closing Date;
(ii) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, has had, or could reasonably be expected to have, a
Material Adverse Effect;
(iii) The sale of the Units hereunder has not been enjoined
(temporarily or permanently);
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(iv) Such other information as the Initial Purchaser may
reasonably request.
(r) The Initial Purchaser shall have received a certificate from the
corporate secretary of the Company, dated the Closing Date, attaching
certified copies of (i) all resolutions of the Board of Directors of the
Company authorizing the transactions contemplated by this Agreement
including, without limitation, approving the offering of the Securities,
the entering into this Agreement, the Indenture, the Registration Rights
Agreements, Warrant Registration Rights Agreement, the Warrant Agreement
and the Unit Agreement and (ii) the certificate of incorporation and
by-laws of the Company and certifying the names and true signatures of
those officers of the Company executing any documents contemplated by this
Agreement.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchaser shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. The Initial
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Securities by any form of general solicitation
or general advertising (as those terms are used in Regulation D under the Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Act and (ii) it has and will solicit offers for the Securities only from,
and will offer the Units only to (A) in the case of offers inside the United
States, (x) 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 or (y) a limited
number of other institutional accredited investors (as defined in Rule
501(a)(1), (2), (3) or (7) under the Act) ("Accredited Investors") reasonably
believed by the Initial Purchaser to be Accredited Investors that, prior to
their purchase of the Securities, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Exhibit A to the
Final Memorandum and (B) in the case of offers outside the United States, to
persons other than U.S. persons
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("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) in reliance on Regulation S of
the Securities Act.
The Initial Purchaser represents and warrants that it is an
Accredited Investor, with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the merits and risks of
an investment in the Securities. The Initial Purchaser agrees to comply with the
applicable provisions of Rule 144A, Rule 144 and Regulation S under the Act and
will offer and sell the Securities only in compliance such provisions. The
Initial Purchaser hereby acknowledges that the Company and, for purposes of the
opinions to be delivered to the Initial Purchaser pursuant to Section 7(a)
hereof, counsel to the Company will rely upon the accuracy and truth of the
representations contained in this Section 8 and the Initial Purchaser hereby
consents to such reliance.
9. Indemnification and Contribution. (a) The Company, to the extent
permitted by applicable law, agrees to indemnify and hold harmless the Initial
Purchaser and its respective affiliates, directors, officers, agents,
representatives, general partners and employees of the Initial Purchaser or its
affiliates, and each other person, if any, who controls the Initial Purchaser or
its affiliates within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the full extent lawful against any losses, claims, damages,
expenses or liabilities (or actions in respect thereof, including, without,
limitation, shareholder derivative actions and arbitration proceedings) to which
the Initial Purchaser or such other person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or "Blue Sky" laws thereof or filed with
any securities association or securities exchange (each an "Application");
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(iii) any breach of any of the representations and warranties of the
Company set forth in this Agreement; or
(iv) any breach of any of the representations and warranties of the
Company set forth in the Registration Rights Agreement, Warrant
Registration Rights Agreement, the Unit Agreement or the Warrant
Agreement;
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and will reimburse, as incurred, the Initial Purchaser and each such other
person for any reasonable legal or other expenses incurred by the Initial
Purchaser or such other person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission (A) made in any Memorandum or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchaser specifically for use therein or (B) which results from the fact that a
copy of the Final Memorandum was not sent or given to a person, and if the
untrue statement or omission or alleged untrue statement or omission that was
contained in the Preliminary Memorandum has been corrected in the Final
Memorandum and delivered to the Initial Purchaser on a timely basis to permit
such delivery or sending. This indemnity agreement will be in addition to any
liabilities or obligations that the Company may otherwise have to the
indemnified parties. Subject to Section 9(c), the Company shall not be liable
under this Section 9 for any settlement of any claim or action effected without
its prior consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of the Initial Purchaser, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which the Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by the Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of the Initial Purchaser.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers, its agents, its representatives and its
employees and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company, or any such director,
officer, agent, representative, employee or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplement thereto
or any Application, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in any Memorandum or any amendment
or supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchaser specifically for use therein;
and subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any reasonable legal or other expenses incurred by the
Company or any such director, officer or controlling person in connection with
investigating or
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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. Subject to Section 9(c), the Initial
Purchaser shall not be liable under this Section 9 for any settlement of any
claim or action effected without its written consent, which shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances designated by the Initial Purchaser in the case of
paragraph
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(a) of this Section 9 or the Company in the case of paragraph (b) of this
Section 9, representing the indemnified parties under such paragraph (a) or
paragraph (b), as the case may be, who are parties to such action or actions) or
(ii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the prior written consent of
the indemnifying party, unless such indemnified party waived in writing its
rights under this Section 9, in which case the indemnified party may effect such
a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable to an indemnified
party in respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just and
equitable contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or 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 Units 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 or breaches that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Company 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 (net
of commissions and before deducting expenses) received by the Company bears 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 Company 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 or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company 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 or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this paragraph (d), the
Initial Purchaser shall not be obligated to make contributions hereunder that in
the aggregate exceed the total discounts, commissions and other compensation
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 or the omissions or
alleged omissions to state a material fact, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
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entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchaser, and each director of the Company, each officer of the Company
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
(e) It is agreed that the indemnification provided for in this
Section 9 shall supersede the indemnification provisions contained in the
NatWest Engagement Letter; provided, however, that no party shall be relieved of
any liability under the Natwest Engagement Letter based upon an act or omission
committed prior to the date hereof.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company its
respective officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchaser or any
other person referred to in Section 9 hereof and (ii) delivery of and payment
for the Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6, 9 and 17 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 Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date any of the following shall have occurred:
(i) the Company shall have sustained any loss or interference with
respect to its businesses or properties from fire, flood, earthquakes,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any strike, labor dispute, slow down or work stoppage
or any legal or governmental proceeding, which loss or interference has
had or could be reasonably likely to have a Material Adverse Effect, or
there shall have been, in the sole judgment of the Initial Purchaser, any
other event or development that, individually or in the aggregate, has or
could be reasonably likely to have a Material Adverse Effect (including
without limitation a change in control of the Company), except in each
case as described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company from that set
forth in the Final
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Memorandum that is material and adverse and that makes it, in the Initial
Purchaser's sole judgment, impracticable to market the Units, the Notes or
the Warrants on the terms and in the manner contemplated in the Final
Memorandum;
(iii) trading generally shall have been suspended or materially
limited on or by, as the case may be, either of the New York Stock
Exchange or the National Association of Securities Dealers, Inc. or the
setting of minimum prices for trading on such exchange or market shall
have occurred or trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market;
(iv) a banking moratorium shall have been declared by New York,
Minneapolis or United States authorities;
(v) 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, (C) any material change in the financial
markets of the United States or (D) any other national or international
calamity or emergency which, in the case of (A), (B), (C) or (D) above and
in the sole judgment of the Initial Purchaser, makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
as contemplated by the Final Memorandum;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that has
a material adverse effect on the financial markets in the United States,
and would, in the sole judgment of the Initial Purchaser, make it
impracticable or inadvisable to market the Securities;
(vii) the proposal, enactment, publication, decree, or other
promulgation of any federal or state statute, regulation, rule order of
any court or other governmental authority which, in the sole judgment of
the Initial Purchaser, would have a Material Adverse Effect; or
(viii) any securities of the Company 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 this
Section 11 and Sections 6 and 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements
set forth in the last paragraph on the cover page of the Final Memorandum and
paragraphs 5, 6 and 7 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
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by the Initial Purchaser to the Company for the purposes of Sections 2(a) and 9
hereof.
13. Original Issue Discount Legend. The Company will cause each
physical Note to contain on its face a legend that satisfies the requirements of
U.S. Treasury Regulations Section 1.1275-3(b) stating that such debt instrument
was issued with original issue discount ("OID") and detailing (i) the issue
price, (ii) the amount of OID per $1,000 of principal amount, (iii) the issue
date and (iv) the yield to maturity, or, alternatively, detailing the name and
either the address or telephone number of a representative of the Company who
will, beginning no later than ten days after the issue date, be able to promptly
supply the appropriate information in response to a holder's request.
14. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be mailed or delivered to (i) NatWest
Capital Markets Limited, 000 Xxxxxxxxxxx, Xxxxxx, Xxxxxxx, with a copy to White
& Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxxx, Esq.; if sent to the Company, shall be mailed or delivered
to the Company at Xxxxxx Media Corp., 0000 Xxxx 00xx Xxxxxx, Xxxx Xxxxxx, XX
00000, Attention: Xxxxxx Xxxxxxxx, with a copy to, Xxxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxx & Xxxxxx, P.C., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx X. Xxxxxxxx, 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 mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
15. Net Payments. All payments made by the Company hereunder or
under any Note will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding any tax imposed on or
measured by the net income or net profits of the Initial Purchaser) and all
interest, penalties or similar liabilities with respect to such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Company agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. The Company agrees to indemnify and hold harmless the Initial
Purchaser, and reimburse the Initial Purchaser upon its written request, for the
amount of any Taxes so levied or imposed and paid by the Initial Purchaser.
16. Successors. This Agreement shall inure to the benefit of and be
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binding upon the Initial Purchaser, the Company and its 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 Company contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Company and officers and
any person or persons who control the Company within the meaning of Section 15
of the 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.
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 APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF 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.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Initial Purchaser.
Very truly yours,
XXXXXX MEDIA CORP.
By:____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the
date first above written.
NATWEST CAPITAL MARKETS LIMITED
By:____________________________
Name:
Title:
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