SHARED TECHNOLOGIES XXXXXXXXX COMMUNICATIONS CORP.
$163,637,000
12 1/4% SENIOR SUBORDINATED DISCOUNT NOTES
DUE 2006
PURCHASE AGREEMENT
March 8, 1996
CS First Boston Corporation
Citicorp Securities Inc.
c/o CS First Boston Corporation
Park Avenue Plaza
New York, NY 10055
Ladies and Gentlemen:
1. Introductory. Shared Technologies Xxxxxxxxx Communications Corp., a
Delaware corporation (the "Issuer"), proposes to issue and sell to the initial
purchasers named in Schedule A hereto (the "Initial Purchasers") $163,637,000
principal amount of its 12 1/4% Senior Subordinated Discount Notes Due 2006 (the
"Notes") to be unconditionally guaranteed on a senior subordinated basis ("the
Guaranties") by Shared Technologies Inc. to be renamed Shared Technologies
Xxxxxxxxx Inc. ("STFI") and by each subsidiary of the Issuer listed on the
signature pages hereto (each a "Subsidiary"; collectively, the "Subsidiaries"
and, together with STFI, the "Guarantors"). The Notes and the Guaranties are
collectively referred to as the "Offered Securities". The Offered Securities are
to be issued under an Indenture, to be dated as of March 1, 1996 (the
"Indenture"), between the Issuer, the Guarantors named therein and the United
States Trust Company of New York as trustee (the "Trustee").
Pursuant to an Agreement and Plan of Merger, dated as of November 9,
1995, as amended on February 2 and 23, 1996 (the "Merger Agreement"), among the
Issuer, Shared Technologies Inc. ("STI"), Xxxxxxxxx Industries, Inc. ("FII"),
RHI Holdings, Inc. ("RHI") and The Xxxxxxxxx Corporation ("TFC"), FII will be
merged with and into STI (the "Merger") and STI, as the surviving corporation,
will be renamed Shared Technologies Xxxxxxxxx Inc. ("STFI"). As preconditions to
the Merger, (i) FII will undergo a recapitalization (the "FII
Recapitalization") pursuant to which FII will transfer all of its assets to, and
cause all of its liabilities to be assumed by, its immediate parent, RHI or
RHI's affiliates except for the assets and liabilities of the communication
services business of FII and certain other specified liabilities and (ii) STI
will cause the Issuer to be incorporated. As part of the Merger, RHI, TFC and
Xxxxxxxxx Holding Corp. will enter into indemnification agreements (the
"Indemnification Agreements") pursuant to which they will indemnify STFI with
respect to the liabilities assumed by RHI as part of the FII Recapitalization.
The Offered Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933 (the
"Securities Act"), in reliance on an exemption therefrom. The Issuer has
prepared a preliminary offering circular dated February 17, 1966 (such
preliminary offering circular being hereinafter referred to as the "Preliminary
Offering Circular"), and an offering circular dated March 8, 1996 (such offering
circular, in the form first furnished to the Initial Purchasers for use in
connection with the offering of the Securities, being hereinafter referred to as
the "Offering Circular"), setting forth information regarding the Issuer, the
Guarantors and the Offered Securities. The Issuer and each Guarantor, jointly
and severally, hereby confirm that they have authorized the use of the
Preliminary Offering Circular and the Offering Circular in connection with the
offering and sale of the Securities.
Holders (including subsequent transferees) of the Offered Securities
will have the registration rights set forth in the Exchange and Registration
Rights Agreement of even date herewith (the "Registration Rights Agreement"),
between the Issuer and the Initial Purchasers. Pursuant to the Registration
Rights Agreement, the Issuer has agreed to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement (the "Exchange Offer
Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), registering an issue of a series of senior notes (the
"Exchange Securities") identical in all material respects to the Offered
Securities (except that the Exchange Securities will not contain terms with
respect to transfer restrictions) to be offered in exchange for the Offered
Securities (the "Exchange Offer") and (ii) under certain circumstances specified
in the Registration Rights Agreement, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
This Agreement, the Indenture, the Registration Rights Agreement and
each Guaranty are referred to herein collectively as the "Operative Documents".
The Issuer and each Guarantor are referred to herein individually as a "Relevant
Company" and collectively as the "Relevant Companies".
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The Issuer, each Subsidiary and STFI, jointly and severally, agree
with the several Initial Purchasers as follows:
2. Representations and Warranties of the Issuer. As used in this
Section 2, references to the "Issuer" or "its subsidiaries" shall mean the
Issuer or its subsidiaries prior to the consummation of the Merger and shall
mean the Issuer or its subsidiaries, effective upon the consummation of the
Merger. The Issuer, STFI and the Subsidiaries jointly and severally represent
and warrant to, and agree with, the several Initial Purchasers as of the date
hereof and as of the Closing Date (as defined in Section 3 hereof) that:
(a) Each of the Preliminary Offering Circular and the Offering
Circular has been prepared by the Issuer and STI. Such Preliminary
Offering Circular and Offering Circular, as supplemented as of the date
of this Agreement and any other document approved by the Issuer for use
in connection with the contemplated resale of the Offered Securities,
are hereinafter collectively referred to as the "Offering Documents".
As of their respective dates and, in the case of the Offering Circular,
as of the date of this Agreement, no Offering Document includes any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from an Offering
Document based upon written information furnished to the Issuer by any
Initial Purchaser through CS First Boston Corporation ("CSFBC")
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b). Except
disclosed in the Offering Documents, on the date of this Agreement each
of FII's and STI's Annual Report on Form 10-K most recently filed with
the Commission and all subsequent reports which have been filed with
the Commission or sent to stockholders pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") do not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) Each of STFI and the Issuer has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering
Documents; and each of STFI and the Issuer is duly qualified to do
business as a foreign corporation in good standing in all
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other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on STFI
and the Issuer.
(c) Each of the Issuer and STFI has an authorized capitalization as
set forth in the Offering Documents and all of the issued shares of
capital stock of each of the Issuer and STFI have been duly authorized
and validly issued and are fully paid and nonassessable. The Capital
Stock of each of the Issuer and STFI conforms in all material respects
to the description thereof contained in the Offering Documents.
(d) Each subsidiary of the Issuer that is a corporation or limited
partnership has been duly incorporated and is an existing corporation
or limited partnership in good standing under the laws of the
jurisdiction of its incorporation or organization, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Documents; and each subsidiary of
the Issuer that is a corporation or limited partnership is duly
qualified to do business as a foreign corporation or limited
partnership in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to so qualify would not
have a material adverse effect on such subsidiaries, taken as a whole;
all of the issued and outstanding capital stock of each subsidiary of
the Issuer has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each subsidiary owned
by the Issuer, directly or through subsidiaries, is owned free from
liens, encumbrances and defects, except that (1) STI owns 99% of the
interests in Financial Place Communications Company, an Illinois
general partnership, (2) STI's interests in its wholly-owned
subsidiary, Access Telemanagement, Inc., a Texas corporation
("Access"), have been pledged in favor of Martnet Inc. pursuant to a
Pledge Agreement dated as of June 27, 1994 (the "Pledge Agreement"),
(3) STI's 99% limited partnership interest in Access Telecommunication
Group L.P., a Texas limited partnership ("Access L.P."), have been
pledged pursuant to the Pledge Agreement and (4) Access L.P., all
interests in which have been pledged pursuant to the Pledge Agreement,
is the holder of 100% of the common stock of Access Network Services,
Inc.
(e) STFI owns all of the issued and outstanding capital stock of the
Issuer and the Issuer owns all of the issued and outstanding capital
stock or equity interests of the Subsidiaries, except as described in
paragraph (d) above, and all such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable; and,
except as described in paragraph (d) above, the capital stock or equity
interests of each subsidiary owned by a Subsidiary,
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directly or through subsidiaries, is owned free from liens,
encumbrances and defects; there are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of the Subsidiaries.
(f) The Notes have been duly authorized by the Issuer; the Indenture
has been duly authorized by the Issuer and the Guarantors; each
Guaranty has been duly authorized by each Guarantor party to it; and
when the Offered Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below) and authenticated by
the Trustee, the Indenture will have been duly executed and delivered
by the Issuer, STFI and the Subsidiaries and such Offered Securities
will have been duly executed, authenticated, issued and delivered and
will conform in all material respects to the description thereof
contained in the Offering Documents; and when the Merger is consummated
each Guaranty will have been duly executed and delivered by each
Guarantor party to it. The Indenture conforms in all material respects
to the requirements of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder; and the
Indenture, each Guaranty and such Offered Securities will constitute
valid and legally binding obligations of the Issuer and the Guarantors
and each of the Indenture, each Guaranty and such Offered Securities
will be enforceable in accordance with their terms subject to (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or similar laws relating to creditors' rights and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(g) The Registration Rights Agreement has been duly authorized,
executed and delivered by each of the Issuer and the Guarantors and
conforms in all material respects to the description thereof contained
in the Offering Documents. The Registration Rights Agreement
constitutes a valid and legally binding obligation of the Issuer and
each Guarantor and is enforceable in accordance with its terms.
(h) This Agreement has been duly authorized, executed and delivered
by the Issuer, STFI and the Subsidiaries.
(i) Except as contemplated by this Agreement or disclosed in the
Offering Documents, there is no broker, finder or other party that is
entitled to receive from the Issuer, any of its subsidiaries or any
Initial Purchaser any brokerage or finder's fee or other fee or
commission as a result of the transactions contemplated by this
Agreement.
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(j) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 4 of this Agreement, no
consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions, other than the Merger, as
contemplated by the Operative Documents or in connection with the
issuance and sale of the Offered Securities by the Issuer, except such
as have been obtained or made or as may be required under the
Securities Act and the Rules and Regulations of the Commission
thereunder with respect to the Registration Rights Agreement, the
Exchange Offer and the transactions contemplated thereunder or state or
foreign securities laws or by the regulations of the National
Association of Securities Dealers, Inc.
(k) The execution, delivery and performance by each of the Issuer,
STFI and the Subsidiaries of the Operative Documents to which it is a
party and the issuance and sale of the Offered Securities and
compliance with the terms and provisions of the Operative Documents and
the Offered Securities will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under (i) any
material statute, rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over any
Relevant Company or any subsidiary of any Relevant Company or any of
their respective properties; (ii) any material agreement or instrument
relating to borrowed money to which any Relevant Company or any such
subsidiary is a party or by which any Relevant Company or any such
subsidiary is bound or to which any of the properties of any Relevant
Company or any such subsidiary is subject; (iii) any other material
agreement or instrument to which any Relevant Company or any such
subsidiary is a party or by which any Relevant Company or any such
subsidiary is bound or to which any of the properties of any Relevant
Company or any such subsidiary is subject which would individually or
in the aggregate have a material adverse effect on the condition
(financial or other), results of operations, business or prospects of
STFI, the Issuer and its subsidiaries taken as a whole (a "Material
Adverse Effect"); or (iv) the charter or by-laws of any Relevant
Company or any such subsidiary. The Issuer and each Guarantor has full
power and authority to authorize, issue and sell the Notes and the
Guaranties respectively, as contemplated by this Agreement.
(l) The Merger Agreement has been duly authorized, executed and
delivered by each of the parties thereto and conforms in all material
respects to the description thereof in the Offering Documents. The
Merger Agreement constitutes a valid and legally binding obligation of
each of the parties thereto and is enforceable in accordance with its
terms subject to (i) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws relating to
6
creditors' rights and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(m) Each Indemnification Agreement has been duly authorized, executed
and delivered by each of the parties thereto and conforms in all
material respects to the description thereof in the Offering Documents.
Each Indemnification Agreement constitutes a valid and legally binding
obligation of each of the parties thereto and is enforceable in
accordance with its terms subject to (i) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws
relating to creditors' rights and (ii) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(n) The execution, delivery and performance by each of STI, FII and,
to the best of the Issuer's knowledge after due inquiry, by RHI and TFC
of the Merger Agreement and compliance with the terms and provisions of
the Merger Agreement will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under (i) any
material statute, rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over the
Issuer, STI, FII, RHI, TFC or any of their respective subsidiaries or
any of their properties; (ii) any material agreement or instrument
relating to borrowed money to which the Issuer, STI, FII, RHI, TFC or
any of their respective subsidiaries is a party or by which the Issuer,
STI, FII, RHI, TFC or any of their respective subsidiaries is bound or
to which any of the properties of the Issuer, STI, FII, RHI, TFC or any
of their respective subsidiaries is subject; (iii) any other material
agreement or instrument to which the Issuer, STI, FII, RHI, TFC or any
of their respective subsidiaries is a party or by which the Issuer,
STI, FII, RHI, TFC or any of their respective subsidiaries is bound or
to which any of the properties of the Issuer, STI, FII, RHI, TFC or any
of their respective subsidiaries is subject, which would individually
or in the aggregate have a material adverse effect on the condition
(financial or other) business or results of operations of (A) the
Issuer and its subsidiaries taken as a whole (B) STI and its
subsidiaries taken as a whole; or (iv) the charter or by-laws of the
Issuer, STI, FII, RHI, TFC or any of their respective subsidiaries.
(o) Each Relevant Company and its subsidiaries has good and
marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances and
defects that would materially interfere with the use made or to be made
thereof by them; and each Relevant Company and its Subsidiaries hold
any leased real or personal property under valid and enforceable leases
7
with no exceptions that would materially interfere with the use made or
to be made thereof by them.
(p) Each Relevant Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to any Relevant Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(q) No labor dispute with the employees of any Relevant Company or
any subsidiary exists or, to the knowledge of the Issuer, is imminent
that might have a Material Adverse Effect.
(r) Each Relevant Company and its subsidiaries owns, possesses or can
acquire on reasonable terms adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to any Relevant Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(s) Except as disclosed in the Offering Documents, no Relevant
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and no Relevant Company is
aware of any pending investigation which might lead to such a claim.
(t) Except as disclosed in the Offering Documents, there are no
pending nor threatened actions, suits or proceedings against or
affecting any Relevant Company, any of its subsidiaries or any of their
respective properties that are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect, or would materially and
8
adversely affect the ability of any Relevant Company to perform its
obligations under the Operative Documents to which it is a party or the
Merger Agreement or which are otherwise material in the context of the
sale of the Offered Securities; and no such actions, suits or
proceedings are threatened or, to STFI's or Issuer's knowledge,
contemplated.
(u) The Issuer has delivered to the Initial Purchasers true and
correct copies of the Merger Agreement, the Indenture and the
Registration Rights Agreement, in the form as originally executed, and
there have been no amendments, alterations, modifications or waivers
thereto or in the exhibits or schedules thereto other than those as to
which the Initial Purchasers shall have been advised. The Merger
Agreement, the Indenture and the Registration Rights Agreement conform
in all material respects to the descriptions thereof in the Offering
Documents.
(v) The historical financial statements (including the related notes
and supporting schedules, if any) included in the Preliminary Offering
Circular and the Offering Circular comply in all material respects with
the requirements applicable to a Registration Statement on Form S-1.
(w) The financial statements with respect to the Issuer included in
the Offering Documents present fairly the financial position of the
Issuer and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise stated in the Offering Documents, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis.
(x) The financial statements with respect to STFI included in the
Offering Document present fairly the financial position of STFI and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and, except as
otherwise stated in the Offering Documents, such financial statements
have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis.
(y) The financial statements with respect to STI included in the
Offering Documents present fairly the financial position of STI and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and, except as
otherwise stated in the Offering Documents, such financial statements
have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis.
(z) The financial statements with respect to FII included in the
Offering Documents present fairly the
9
financial position of FII and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and, except as otherwise stated in the Offering
Documents, such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis.
(aa) Except as disclosed in the Offering Circular, since the date of
the latest audited consolidated financial statements of each of STI and
FII included in the Offering Documents there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other),
business, properties or results of operations of either STI or FII and
their respective subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Offering Documents, there has been
no dividend or distribution of any kind declared, paid or made by
either STI or FII on any class of its respective capital stock.
(bb) No Relevant Company is an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"), nor is
it a closed-end investment company required to be registered, but not
registered, thereunder; and no Relevant Company is, and after giving
effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the Offering
Documents, will not be an "investment company" as defined in the
Investment Company Act.
(cc) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated interdealer quotation
system. The Issuer and STFI have been advised that the Offered
Securities have been designated as Private Offerings, Resale and
Trading through Automated Linkages ("PORTAL") securities in accordance
with the rules and regulations of NASD.
(dd) Assuming the accuracy of the representations, of the Initial
Purchasers contained herein, the offer and sale of the Offered
Securities in the manner contemplated by this Agreement will be exempt
from the registration requirements of the Securities Act by reason of
Section 4(2) thereof, Regulation D thereunder and Regulation S
thereunder; and it is not necessary to qualify an indenture in respect
of the Offered Securities under the United States Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
(ee) No Relevant Company, no affiliate of a Relevant Company, nor any
person acting on their behalf
10
(i) has, within the six-month period prior to the date hereof, offered
or sold in the United States or to any U.S. person (as such terms are
defined in Regulation S under the Securities Act) the Offered
Securities, or any security of the same class or series as the Offered
Securities or (ii) has offered or will offer or sell the Offered
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S ("Regulation S") under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(b) of Regulation S. The Relevant Companies, their
affiliates and any person acting on their behalf have complied and will
comply with the offering restrictions requirement of Regulation S. The
Issuer has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for this Agreement.
(ff) No Relevant Company owns any "margin securities" as that term is
defined in Regulations G and U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds
of the sale of the Offered Securities will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security
or for any other purpose which might cause any of the Offered
Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(gg) The Offered Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(hh) The Issuer has not taken nor has any Guarantor taken, nor will
they take, directly or indirectly, any action prohibited by Rule 10b-6
under the Exchange Act in connection with the offering of the Offered
Securities.
(ii) STFI is subject to Section 13 or 15(d) of the Exchange Act.
(jj) There is no "substantial U.S. market interest" as defined in
Rule 902(n) of Regulation S in the Issuer's debt securities.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Issuer agrees to sell to the
Initial Purchasers, and the Initial Purchasers agree, severally and not jointly,
to purchase from the Issuer the respective principal amounts of Offered
Securities set forth
11
opposite the names of the Initial Purchasers in Schedule A hereto, at a purchase
price of 67.817% of the principal amount thereof plus accrued interest from
March 13, 1996 to the Closing Date (as hereinafter defined).
The Issuer will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global Securities in
definitive form (the "Global Securities") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Document. Payment for the Offered
Securities shall be made by the Initial Purchasers in Federal (same-day) funds
by wire transfer to an account in New York previously designated to CSFBC by the
Issuer at a bank acceptable to CSFBC at the office of Cravath, SwaineE& Xxxxx at
10:00 a.m. (New York time), on March 13, 1996, or at such other time not later
than seven full business days thereafter as CSFBC and the Issuer determine, such
time being herein referred to as the "Closing Date", against delivery to the
Trustee as custodian for DTC of the Global Securities representing all of the
Offered Securities. The Global Securities will be made available for checking at
the above office of Cravath, SwaineE& Xxxxx at least 24Ehours prior to the
Closing Date.
Notwithstanding the foregoing, any Offered Securities sold to
Institutional Accredited Investors (as hereinafter defined) pursuant to
Section 4(c) shall be issued in definitive, fully registered form and shall bear
the legend relating thereto set forth under "Transfer Restrictions" in the
Offering Documents, but shall be paid for in the same manner as any Offered
Securities to be purchased by the Initial Purchasers hereunder and to be offered
and sold by them in reliance on Rule 144A under the Securities Act.
4. Representations by Initial Purchasers; Resale by Initial
Purchasers. (a) Each Initial Purchaser represents and warrants to the Issuer
that it is an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Initial Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S or pursuant to an
exemption from the registration requirements of the Securities Act. Each Initial
Purchaser severally represents and agrees that it has offered and sold the
Offered Securities and will offer and sell the Offered Securities only in
accordance with Rule 903 or Rule 144A under the Securities Act ("Rule 144A") or,
in the case of CSFBC or any other Initial
12
Purchaser authorized by CSFBC, to a limited number of Institutional Accredited
Investors (as hereinafter defined) in accordance with subsectionE(c). Each
Initial Purchaser severally represents, warrants and agrees that neither such
Initial Purchaser nor its affiliates, nor any persons acting on its or their
behalf, have engaged or will engage in any directed selling efforts with respect
to the Offered Securities, and such Initial Purchaser, its affiliates and all
persons acting on its or their behalf have complied and will comply with the
offering restrictions requirement of Regulation S and any applicable foreign
securities laws, regulations or restrictions, in connection with the offering of
the Offered Securities outside the United States. Each Initial Purchaser
severally agrees that, at or prior to confirmation of sale of the Offered
Securities, other than a sale pursuant to Rule 144A or a sale to an
Institutional Accredited Investor in accordance with subsectionE(c), such
Initial Purchaser will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases the Offered
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the 'Securities Act') and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the date of the commencement of the offering and
the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meanings given to them by
Regulation S."
Unless otherwise defined herein, terms used in this subsectionE(b)
have the meanings given to them by Regulation S.
(c) CSFBC and any other Initial Purchaser authorized by CSFBC may
offer and sell Offered Securities in definitive, fully registered form to a
limited number of institutions, each of which is reasonably believed by the
applicable Initial Purchaser to be an "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an entity in
which all of the equity owners are accredited investors within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act (each, an
"Institutional Accredited Investor"); provided, however, that each such
Institutional Accredited Investor executes and delivers to such Initial
Purchaser and the Issuer, prior to the consummation of any sale of Offered
Securities to such Institutional Accredited Investor, an Initial Purchaser's
Letter in substantially the form attached
13
as Annex A to the Offering Circular (an "Initial Purchaser's Letter").
(d) Each Initial Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except for any such
arrangements with the other Initial Purchasers or affiliates of the other
Initial Purchasers or with the prior written consent of the Issuer.
(e) Each Initial Purchaser severally agrees that it and each of its
affiliates or any one acting in its behalf will not offer or sell the Offered
Securities purchased hereby in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act, including, but not limited to (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
Each Initial Purchaser severally agrees, with respect to resales made in
reliance on Rule 144A of any of the Offered Securities, to deliver either with
the confirmation of such resale or otherwise prior to settlement of such resale
a notice to the effect that the resale of such Offered Securities has been made
in reliance upon the exemption from the registration requirements of the
Securities Act provided by Rule 144A.
(f) Each of the Initial Purchasers severally represents and agrees
that (i) it has not offered or sold and prior to the date six months after the
date of issue of the Offered Securities will not offer or sell any Offered
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Offered Securities in, from or otherwise
involving the United Kingdom and (iii) it has only issued or passed on, and will
only issue or pass on, in the United Kingdom, any document received by it in
connection with the issue of the Offered Securities to a person who is of a kind
described in ArticleE11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) OrderE1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
14
(g) Each Initial Purchaser represents and agrees that (i) it has not
solicited, and will not solicit, offers to purchase any of the Offered
Securities from, (ii) it has not sold, and will not sell, any of the Offered
Securities to, and (iii) it has not distributed, and will not distribute, the
Preliminary Offering Circular or the Offering Circular to, any person or entity
in any jurisdiction outside of the United States except, in each case, in
compliance in all material respects with all applicable laws. For the purpose of
this Agreement, "United States" means the United States of America, its
territories, its possessions and other areas subject to its jurisdiction.
5. Certain Agreements of the Issuer. The Issuer and, unless otherwise
specified, the Guarantors jointly and severally agree with the several Initial
Purchasers that:
(a) The Issuer will advise CSFBC promptly of any proposal to amend or
supplement the Offering Documents and will not effect such amendment or
supplementation without CSFBC's consent. If, at any time prior to the completion
of the initial resale of the Offered Securities by the Initial Purchasers, any
event occurs as a result of which the Offering Documents as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, the
Issuer promptly will notify CSFBC of such event and promptly will prepare, at
its own expense, an amendment or supplement which will correct such statement or
omission. Neither CSFBC's consent to, nor the Initial Purchasers' delivery to
offerees or investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(b) The Issuer will furnish to CSFBC copies of the Preliminary
Offering Circular, the Offering Documents and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
CSFBC reasonably requests, and the Issuer will furnish to CSFBC on the date
hereof three copies of the Offering Documents signed by a duly authorized
officer of the Issuer, one of which will include the independent accountants'
reports therein manually signed by such independent accountants. At any time
when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the
Issuer will promptly furnish or cause to be furnished to CSFBC (and, upon
request, to each of the other Initial Purchasers) and, upon request of holders
and prospective purchasers of the Offered Securities, to such holders and
purchasers, a reasonable number of copies of the information required to be
delivered to holders and prospective purchasers of the Offered Securities
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in connection with resales
by such
15
holders of the Offered Securities. The Issuer will pay the expenses of printing
and distributing to the Initial Purchasers all such documents.
(c) The Issuer will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for investment
under the laws of such jurisdictions in the United States and Canada as CSFBC
designates and will continue such qualifications in effect so long as required
for the resale of the Offered Securities by the Initial Purchasers; provided,
however, that neither the Issuer nor any Guarantor will be required to qualify
as a foreign corporation or to file a general consent to service of process in
any such jurisdiction.
(d) During the period of five years after the Closing Date, each of
STFI and the Issuer will furnish to CSFBC and, upon request, to each of the
other Initial Purchasers, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and the Issuer
will furnish to CSFBC and upon request, to each of the other Initial Purchasers
(i) as soon as available, a copy of each report and any definitive proxy
statement of STFI or the Issuer (as applicable) filed with the Commission under
the Exchange Act or mailed to stockholders and (ii) from time to time, such
other information concerning the Issuer and the Guarantors as CSFBC may
reasonably request.
(e) During the period of three years after the Closing Date, the
Issuer will, upon request, furnish to CSFBC, each of the other Initial
Purchasers and any holder of Offered Securities a copy of the restrictions on
transfer applicable to the Offered Securities.
(f) During the period of three years after the Closing Date, the
Issuer will not, and will not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Offered Securities that
have been reacquired by any of them.
(g) During the period of three years after the Closing Date, the
Issuer will not be or become an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Issuer Act and is not, and will not be or
become, a closed-end investment company required to be registered, but not
registered, under the Investment Issuer Act.
(h) Except following the effectiveness of the Exchange Offer or Shelf
Registration Statement, as the case may be, the Issuer will not, and will not
permit any affiliate (as such term is defined in Rule 501(b) under the
Securities Act) of the Issuer or authorize or knowingly permit any person
16
acting on its or their behalf to, solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general advertising
(as such terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(i) The Issuer will pay all expenses incidental to the performance of
the Issuer's and each Guarantors' obligations (as applicable) under the
Operative Documents, including (i) the fees and expenses of the Trustee;
(ii) all expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Offered Securities, the preparation and
printing of this Agreement, the Registration Rights Agreement, the Offered
Securities, the Indenture, the Guaranties, the Offering Documents and amendments
and supplements thereto, and any other document relating to the issuance, offer,
sale and delivery of the Offered Securities; (iii) the cost of qualifying the
Offered Securities for trading in the PORTAL market and any expenses incidental
thereto; and (iv) the cost of any advertising approved by the Issuer in
connection with the issue of the Offered Securities. The Issuer will also pay or
reimburse the Initial Purchasers (to the extent incurred by them) for any
reasonable expenses (including the reasonable fees and disbursements of counsel)
incurred in connection with qualification of the Offered Securities for sale
under the laws of such jurisdictions in the United States and Canada as CSFBC
designates and the printing of memoranda relating thereto, for any fees charged
by investment rating agencies for the rating of the Offered Securities, for all
reasonable travel expenses of the Issuer's officers and employees and any other
reasonable out-of-pocket expenses of the Issuer in connection with attending
meetings with prospective purchasers of the Offered Securities from the Initial
Purchasers and for expenses incurred in distributing the Preliminary Offering
Circular and the Offering Documents (including any amendments and supplements
thereto).
(j) In connection with the offering, until CSFBC shall have notified
the Issuer and the other Initial Purchasers of the completion of the resale of
the Offered Securities, neither the Issuer nor any of its affiliates has or
will, either alone or with one or more other persons, bid for or purchase for
any account in which it or any of its affiliates has a beneficial interest any
Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Offered Securities.
(k) For a period of 180 days after the date of the Offering Circular,
none of STFI, the Issuer or any of its
17
subsidiaries will offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, except to an affiliate which agrees to be bound by the
provisions of this Section, any United States dollar-denominated debt securities
issued or guaranteed by STFI, the Issuer or any of its subsidiaries and having a
maturity of more than one year from the date of issue or publicly disclose the
intention to make any such offer, sale, pledge or disposal, without the prior
written consent of CSFBC. None of STFI, the Issuer or any of its subsidiaries
will at any time offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Offered Securities.
(l) The Issuer will apply the net proceeds of the offering and the sale of the
Offered Securities in the manner set forth in the Offering Documents under the
caption "Use of Proceeds".
(m) The Issuer will use its best efforts to cause the Offered
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.
(n) The Issuer will cause each Note to bear the legend set forth in
the form of Note attached as ExhibitEA to the Indenture until such legend shall
no longer be necessary or advisable because the Offered Securities are no longer
subject to the restrictions on transfer described therein.
(o) The Issuer will comply with the Registration Rights Agreement and
all agreements set forth in the representation letter of the Issuer to The
Depository Trust Issuer relating to the approval of the Offered Securities for
"book-entry" transfer.
6. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Offered Securities will be subject to the accuracy of the representations and
warranties on the part of the Issuer and the Guarantors herein, to the accuracy
of the statements of officers of the Issuer and the Guarantors made pursuant to
the provisions hereof, to the performance by the Issuer and the Guarantors of
their obligations hereunder and to the following additional conditions
precedent:
(a) The Initial Purchasers shall have received:
(i) a letter, dated the date of this Agreement, of Xxxxxx
Xxxxxxxx LLP confirming that they are independent public
accountants within the meaning of the Securities Act
18
and the applicable published rules and regulations thereunder
("Rules and Regulations") and to the effect that:
(A) in their opinion the financial statements and
schedules examined by them and included in the
Offering Documents comply as to form in all material
respects with the applicable accounting requirements
of the Securities Act and the related published Rules
and Regulations that would apply to the Offering
Documents if the Offering Documents were prospectuses
included in a registration statement on FormES-1
under the Securities Act;
(B) they have performed the procedures specified by
the American Institute of Certified Public
Accountants for a review of interim financial
information as described in Statement of Auditing
Standards No.E71, Interim Financial Information, on
the unaudited financial statements with respect to
FII included in the Offering Documents;
(C) on the basis of the review referred to in
clauseE(B) above, a reading of the latest available
interim financial statements of FII, inquiries of
officials of FII who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that
caused them to believe that:
(1) the unaudited financial statements with
respect to FII included in the Offering
Documents do not comply as to form in all
material respects with the applicable
accounting requirements of the Securities
Act and the related published Rules and
Regulations that would apply to the Offering
Documents if the Offering Documents were
prospectuses included in a registration
statement on FormES-1 under the Securities
Act or any material modifications should be
made to such unaudited financial statements
for them to be in conformity with generally
accepted accounting principles;
(2) at the date of the latest available
balance sheet of FII read by such
accountants, or at a subsequent specified
date not more than five days prior to the
date of this Agreement, there was any change
in the capital stock or any increase in
short-term indebtedness or long-term debt of
FII and its consolidated subsidiaries or, at
the date of the latest available balance
sheet read by such accountants, there was
any decrease in consolidated net current
assets (working capital) or net assets as
compared with amounts shown on the latest
balance sheet included in the Offering
Documents; or
(3) for the period from the closing date of
the latest income statement with respect to
FII included in the Offering Documents to a
subsequent date not more than five days
prior to the date of this agreement the
closing date of the latest available income
statement read by such
19
accountants there were any decreases, as
compared with the corresponding period of
the previous year, in consolidated net
sales, consolidated income before
extraordinary items or net income,
except in all cases set forth in clausesE(2) and (3)
above for changes, increases or decreases which the
Offering Documents disclose have occurred or may
occur and which are fully described and set out in
such letter;
(D) on the basis of an examination of the unaudited
pro forma financial statements included in the
Offering Documents and inquiries of officials of the
Issuer and FII respectively, who have responsibility
for financial and accounting matters, nothing came to
their attention that caused them to believe that the
pro forma financial statements included in the
Offering Documents do not comply in all material
respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the
historical amounts in the compilation of such
financial statements or on the pro forma basis
described in the notes thereto; and
(E) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and
other financial information contained in the Offering
Documents (in each case to the extent that such
dollar amounts, percentages and other financial
information are derived from the general accounting
records of FII and its subsidiaries subject to the
internal controls of FII's accounting system or are
derived directly from such records by analysis or
computation) with the results obtained from
inquiries, a reading of such general accounting
records and other procedures specified in such letter
and have found such dollar amounts, percentages and
other financial information to be in agreement with
such results, except as otherwise specifically set
forth in such letter.
(ii) a letter, dated the date of this Agreement, of Xxxxxxxxx,
KassE& Company, P.C. confirming that they are independent
public accountants within the meaning of the Securities Act
and the Rules and Regulations and confirming each matter set
forth in subsectionsEa(i)(A), (B), (C), (D) and (E) above as
if each reference to FII was to STI.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) a change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls that would, in the judgment of CSFBC, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market
or in respect of dealings in the secondary market, or (ii)(A) any
change, or any development or event involving a
20
prospective change, in the condition (financial or other), business,
properties or results of operations of the Issuer or its subsidiaries
which, in the judgment of a majority in interest of the Initial
Purchasers including CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering
or the sale of and payment for the Offered Securities; (B) any
downgrading in the rating of any debt securities of the Issuer by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Issuer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (C) any
suspension or limitation of trading in securities generally on the
New York Stock Exchange, The Nasdaq Stock Market's National Market, the
American Stock Exchange or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Issuer, STI or FII on any exchange or in the over-the-counter market;
(D) any banking moratorium declared by U.S. Federal or New York
authorities; or (E) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Initial
Purchasers including CSFBC, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and
payment for the Offered Securities.
(c) Each condition (other than the issuance and sale of the Offered
Securities) to the closing contemplated by the Merger Agreement shall
have been satisfied or waived. There shall exist at and as of the
Closing Date (after giving effect to the transactions contemplated by
this Agreement) no condition that would constitute a default (or an
event that with notice or the lapse of time, or both, would constitute
a default) under the Merger Agreement, which has not been waived.
Concurrently with the issue and sale of the Offered Securities, the
Merger shall be consummated on terms that conform in all material
respects to the description thereof in the Offering Documents and the
Initial Purchasers shall have received true and correct copies of all
documents pertaining thereto and evidence satisfactory to the Initial
Purchasers of the consummation thereof.
(d) The offer to purchase for cash the 12 1/4% Senior Secured Notes
due 1999 of FII and the solicitation of consents to an amendment of the
indenture relating to such notes by FII, pursuant to an Offer to
Purchase and Consent Solicitation Statement, the "Debt Tender Offer")
shall have expired and the supplemental indenture related thereto shall
have been executed and remain in full force and effect.
21
(e) The Issuer and the Guarantors shall have entered into the Credit
Facility ("Credit Facility") with Credit Suisse, Citicorp USA, Inc. and
NationsBank providing for up to $160.0 million of loans and the closing
thereunder shall have occurred no later than the Closing Date. The
Initial Purchasers shall have received counterparts, conformed and
executed, thereof and all other documents and agreements entered into
and received thereunder in connection with the closing of the Credit
Facility. There shall exist at and as of the Closing Date (after giving
effect to the transactions contemplated by this Agreement and the
Merger) no condition that would constitute a default (or an event that
with notice or lapse of time, or both, would constitute a default)
under the Credit Facility.
(f) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of XxxxxxX& Xxxxxx counsel for STI, the Issuer and the
Guarantors, to the effect that:
(i) Each of the Issuer and STFI has been duly incorporated
and is an existing corporation in good standing under the laws
of the State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its businesses as
described in the Offering Documents and is duly qualified to
do business as a foreign corporation and is in good standing
in all jurisdictions in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification, except where the failure to so qualify
would not have a material adverse effect on the Issuer and
STFI and their consolidated subsidiaries, taken as a whole;
(ii) Each subsidiary of the Issuer is duly incorporated or
organized and is an existing corporation or limited
partnership in good standing under the laws of the
jurisdiction of its incorporation or organization; and each
such subsidiary is duly qualified to do business as a foreign
corporation or limited partnership and is in good standing in
each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification, except where the failure to so quality
would not have a material adverse effect on the Issuer and
STFI and such subsidiaries, taken as a whole;
(iii) The descriptions in the Offering Documents of statutes,
legal and governmental proceedings and of contracts as they
relate to STI before the Merger are accurate and to our
knowledge fairly present, as to such statutes, legal or
governmental proceedings and contracts described therein, the
descriptions that would be required to be presented with
respect thereto if the Offering Documents were prospectuses
included in registration statements on FormES-1 under the Act;
as of its date and at the date hereof,
the Offering Circular complies (with respect to form only) in
all material respects with the requirements of PartEI (other
than in relation to the outside front cover) of FormES-1 under
the Act, as such provisions are applicable to a prospectus
forming part of a registration statement on FormES-1 under the
Act (it being understood that such counsel express no opinions
as to the sufficiency of the content thereof, the financial
statements or other financial data contained in the Offering
Circular or as to whether independent comments of the
Securities and Exchange Commission would be received and would
need to be accommodated). Nothing in such opinion shall be
construed to be an opinion that there are no material
omissions with respect to statutes, legal and governmental
proceedings or of contracts;
(iv) STFI owns all of the capital stock of the Issuer and the
Issuer owns all of the issued and outstanding capital stock
of, or equity interests in, the Subsidiaries and all such
capital stock has been duly authorized and validly issued and
is fully paid and nonassessable; and such capital stock or
equity interests are owned free from liens, encumbrances and
defects, except that (1) STI owns 99% of the interests in
Financial Place Communications Company, an Illinois general
partnership, (2) STI's interests in its wholly-owned
subsidiary, Access Telemanagement, Inc., a Texas corporation
("Access"), have been pledged in favor of Martnet Inc.
pursuant to a Pledge Agreement dated as of JuneE27, 1994 (the
"Pledge Agreement"), (3) STI's 99% limited partnership
interest in Access Telecommunication Group L.P., a Texas
limited partnership ("Access L.P."), have been pledged
pursuant to the Pledge Agreement and (4) Access L.P., all
interests in which have been pledged pursuant to the Pledge
Agreement, is the holder of 100% of the common stock of Access
Network Services, Inc.; and to such counsel's knowledge there
are no outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any such shares of
capital stock or other equity interest of the Subsidiaries;
(v) The Issuer and each Guarantor has full legal right,
power and authority to execute and deliver the Operative
Documents and to perform its respective obligations hereunder
and thereunder; and all corporate or other action required to
be taken for the due and proper authorization, execution and
delivery of the Operative Documents and the consummation of
the transactions contemplated hereby and thereby have been
duly and validly taken;
(vi) The Operative Documents and the Offered Securities
constitute valid and legally binding obligations of the Issuer
and the Guarantors; and each Operative Document and such
Offered Securities will be enforceable in accordance with
their terms;
23
(vii) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 4 of
this Agreement, no consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions
contemplated by the Operative Documents or in connection with
the issuance and sale of the Offered Securities by the Issuer,
except such as have been obtained or made or as may be
required under the Securities Act or the Exchange Act and the
Rules and Regulations of the Commission thereunder with
respect to the Registration Rights Agreement, the Exchange
Offer and the transactions contemplated thereunder or state or
foreign securities laws or by the regulations of the National
Association of Securities Dealers, Inc.;
(viii) The execution, delivery and performance by the Issuer
and each Guarantor of the Operative Documents to which it is a
party and the issuance and sale of the Offered Securities and
compliance with the terms and provisions of the Operative
Documents and the Offered Securities will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under (i) any material statute, rule,
regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over such
Relevant Company or any subsidiary of any Relevant Company or
any of their properties; (ii) any agreement or instrument to
which any Relevant Company or any such subsidiary is a party
or by which any Relevant Company or any such subsidiary is
bound or to which any of the properties of any Relevant
Company or any such subsidiary is subject, which agreement or
instruments have been filed by STI under the Securities Act or
the Exchange Act which would individually or in the aggregate
have a material adverse effect on the condition (financial or
other), business or results of operations of any Relevant
Company and its subsidiaries taken as a whole; or (iii) the
charter or by-laws of any Relevant Company or any such
subsidiary;
(ix) The execution, delivery and performance by STI and
compliance with the terms and provisions of the Merger
Agreement will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under
(i) any material statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over STI or any of its subsidiaries or any
of their properties; (ii) any agreement or instrument to which
the STI or any of its subsidiaries is a party or by which STI
or any of its subsidiaries is bound or to which any of the
properties of the STI or any of its subsidiaries is subject,
which agreement or instruments have been filed by STI under
the Securities Act or the Exchange Act which would
individually or in the aggregate have a material adverse
effect on the condition (financial or other) business,
24
properties or results of operations of STI and its
subsidiaries taken as a whole; or (iii) the charter or by-laws
of STI or any of its subsidiaries;
(x) Except for the filing of the Certificate of Merger with
the Secretary of State of Delaware, each consent,
authorization, order and approval of, and filing and
registration with, any governmental commission, board or other
regulatory body required to be made or obtained by STI for the
execution and delivery of the Merger Agreement by the Issuer
of the transactions contemplated thereby has been made or
obtained;
(xi) Upon the filing of the Certificate of Merger with the
Secretary of State of Delaware in accordance with the Merger
Agreement, the Merger became effective in accordance with the
General Corporation Law of the State of Delaware.
(xii) Except as disclosed in the Offering Documents, there
are, to the knowledge of such counsel, no pending or
threatened actions, suits or proceedings against or affecting
the Issuer, the Guarantors or any of their subsidiaries or any
of their respective properties that if determined adversely
would be reasonably likely to have, individually or in the
aggregate, a material adverse effect on the condition
(financial or other), business or results of operations of the
Issuer and the Guarantors and their respective subsidiaries
taken as a whole, or would materially and adversely affect the
ability of the Issuer or the Guarantors to perform their
obligations under the Operative Documents, the Merger
Agreement or which are otherwise material in the context of
the sale of the Offered Securities;
(xiii) Neither the Issuer nor any Guarantor is an open-end
investment company, unit investment trust or face-amount
certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of
1940 (the "Investment Company Act"), nor is it a closed-end
investment company required to be registered, but not
registered, thereunder; and each of the Issuer and each
Guarantor is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Documents, will
not be an "investment company" as defined in the Investment
Company Act;
(xiv) The Indenture conforms as to form in all material
respects with the requirements of the Trust Indenture Act and
the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder;
(xv) Assuming the accuracy of the representations and
warranties of the Initial Purchasers
25
contained in Section 4 of this Agreement, the offer and sale
of the Offered Securities in the manner contemplated by this
Agreement will be exempt from the registration requirements of
the Securities Act; and it is not necessary to qualify the
Indenture under the Trust Indenture Act.
(xvi) In addition, such counsel shall state that they have
participated in conferences with representatives of the Issuer
and the Guarantors, at which conferences the contents of the
Offering Documents, any amendment thereof and supplement
thereto and related matters were discussed, and nothing has
come to the attention of such counsel to cause such counsel to
believe that the Offering Documents or any amendment thereof
or supplement thereto contains any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, provided that such
counsel need not express any view with respect to the
financial statements and schedules or other financial data
included therein; and further provided that the statement set
forth in this clauseE(xvi) may be set forth in a separate
statement in such counsel's opinion and not in a numbered
paragraph therein.
In rendering such opinion, such counsel may rely as to matters
governed by the law of any jurisdiction other than the Commonwealth of
Massachusetts, the State of Delaware or the United States of America on local
counsel in such jurisdictions; provided, however, that such counsel shall state
that they believe that they and the Initial Purchasers are justified in relying
on such other counsel.
Such opinion shall also state that it is being delivered to the
Initial Purchasers at the request of the Issuer and the Guarantors.
(g) At the Closing Date, the Initial Purchasers shall have received
an opinion of Xxxxxx XxxxxxX& Xxxxxxx and Xxxxxx Xxxxxxx,EEsq., counsel
for FII, RHI, TFC and Xxxxxxxxx Communications Services Company
("FCSC") (divided between such counsel as they deem appropriate,
subject to the reasonable satisfaction of the Initial Purchasers),
dated as of the Closing Date, in form and substance satisfactory to
counsel for the Initial Purchasers, to the effect that:
(i) ach of TFC, RHI, FII and Xxxxxxxxx Holding Corp. are
corporations organized, validly existing and in good standing
under the laws of the State of Delaware;
(ii) ach of TFC, RHI and FII has full corporate power and
authority to execute and deliver the Merger Agreement and to
perform its respective obligations thereunder; and all
necessary corporate action has been taken by TFC, RHI and FII
for the due and proper authorization,
26
execution and delivery of the Merger Agreement and the
consummation of the transactions contemplated thereby,
including but not limited to the Xxxxxxxxx Reorganization; the
Merger Agreement and all agreements and other documents
executed by TFC and its affiliates to effect the FII
Reorganization (the "Reorganization Documents") have been duly
and validly executed;
(iii) ach of the Merger Agreement and Reorganization
Documents constitutes a valid and legally binding obligation
of each of TFC, RHI and FII and their affiliates who are a
party thereto and is enforceable against them in accordance
with its terms subject to (i) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at
law or in equity);
(iv) ach of TFC, RHI and Xxxxxxxxx Holding Corp. has full
corporate power and authority to execute and deliver the
Indemnification Agreement to which it is a party, the Pledge
Agreement and the Registration Rights Agreement and to perform
its respective obligations thereunder; and all necessary
corporate action has been taken by TFC, RHI and Xxxxxxxxx
Holding Corp. for the due and proper authorization, execution
and delivery of the Indemnification Agreement to be signed by
them and the Pledge Agreement and the Registration Rights
Agreement;
(v) ach of the Indemnification Agreements, Pledge Agreement
and Registration Rights Agreement constitute a valid and
legally binding obligation of TFC, RHI and Xxxxxxxxx Holding
Corp., as the case may be, and are enforceable against them in
accordance with their respective terms subject to
(i) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity);
(vi) Prior to the Closing Date, FCSC is a general
partnership duly organized and validly existing in good
standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing in each other
jurisdiction in which its ownership or lease of property or
the conduct of the FII Telecommunications Business requires
such qualification;
(vii) With respect to FCSC, the execution, delivery and
performance by FII and compliance with the terms and
provisions of the Merger Agreement will not result in a breach
or violation of any of the terms and provisions of, or
27
constitute a default under (a) any material statute, rule,
regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction of FCSC or any
of their properties which would individually or in the
aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of
operation of FCSC taken as a whole, except as provided in the
Offering Circular under the caption "Risk Factors", subheading
"Government Regulation" and in paragraphsE3 and 6 of the
opinion of Xxxxxxx & Berlin addressed to FCSC ("Xxxxxxx &
Berlin OpinionEI") and paragraphsE5 and 6 of the opinion of
Xxxxxxx & Berlin addressed to the Lenders and the Initial
Purchasers ("Xxxxxxx & Berlin OpinionEII"); (b) any agreement
or instrument to which FCSC is a party or by which FCSC or any
of its subsidiaries is bound or to which any of the properties
of FCSC is subject, which would individually or in the
aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of
operations of FCSC taken as a whole, except as provided in
Section 6.13 of the Merger Agreement and Section 6.13 of the
Disclosure Statement; or (c) the partnership agreement of
FCSC;
(viii) With respect to FCSC, the execution, delivery and
performance by each of TFC, RHI and Xxxxxxxxx Holding Corp.
and compliance with the terms and provisions of the
Indemnification Agreements will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default or conflict under (a) any material statute, rule,
regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction of FCSC or any
of their properties which would individually or in the
aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of
operations of FCSC taken as a whole, except as provided in the
Offering Circular under the caption "Risk Factors", subheading
"Government Regulation" and in paragraphsE3 and 6 of Xxxxxxx &
Berlin OpinionEI and paragraphsE5 and 6 of Xxxxxxx & Berlin
OpinionEII; (b) any agreement or instrument relating to
borrowed money to which FCSC is a party or by which FCSC is
bound or to which any of the properties of FCSC is subject,
except as provided in Section 6.13 of the Merger Agreement and
Section 6.13 of the Disclosure Statement; or (c) any other
agreement or instrument to which FCSC is bound or to which any
of the properties of FCSC is subject, which would individually
or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or
results of operations of FCSC taken as a whole, except as
provided in Section 6.13 of the Merger Agreement and
Section 6.13 of the Disclosure Statement; or (d) the
partnership agreement of FCSC;
(ix) With respect to FCSC (or directors of officers of FCSC),
statements in the Offering Circular under
28
the captions (a) "Offering Circular Summary", subheadings
"General" and "Business Strategy", (b) "Risk Factors",
subheadings "Business Integration", "Competition",
"Operational Demands Resulting from Growth", "Governmental
Regulation", "Reliance on Third Parties for Equipment" and
"Dependence on Key Personnel", and (c) "Business", subheadings
"General", "Business Strategy", "Historical Information
Regarding STI and FII", "Description of Business" fairly
summarize the matters described therein with respect to FCSC
in all material respects.
In rendering such opinion, such counsel may rely as to matters
governed by the law of any jurisdiction other than the State of New York,
Delaware or the United States of America on local counsel in such jurisdictions;
provided, however, that such counsel shall state that they believe that they and
the Initial Purchasers are justified in relying on such other counsel.
Such opinion shall also state that it is being delivered to the
Initial Purchasers at the request of the Issuer and the Guarantors.
(h) The Initial Purchasers shall have received from Cravath, SwaineE&
Xxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the
Issuer, the validity of the Offered Securities, the Offering Documents,
the exemption from registration for the offer and sale of the Offered
Securities by the Issuer to the several Initial Purchasers and the
resales by the several Initial Purchasers as contemplated hereby and
other related matters as CSFBC may require, and the Issuer shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(i) The Initial Purchasers shall have received a certificate dated
the Closing Date:
(i) of the President or any Vice President and a principal
financial or accounting officer of the Issuer in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and
warranties of the Issuer and its subsidiaries in this
Agreement are true and correct, that the Issuer and its
subsidiaries have complied with all agreements and satisfied
all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date and that, subsequent
to the date of the most recent financial statements with
respect to the Issuer and its subsidiaries in the Offering
Circular there has been no material adverse change nor any
development or event involving a prospective material adverse
change, in the condition (financial or other), business,
properties or results of operations of any Relevant Company
29
and its subsidiaries taken as a whole, except as set forth in
or contemplated by the Offering Circular or as described in
such certificate.
(ii) execution of the Guaranties, dated the Closing Date, of
the President or any Vice President and a principal financial
or accounting officer of STFI confirming each of the matters
referred to in sub-paragraphE(i).
(j) The Initial Purchasers shall have received:
(i) a letter, dated the Closing Date, of Xxxxxx Xxxxxxxx LLP
which meets the requirements of subsectionE(a)(i) of this
Section; and
(ii) a letter, dated the Closing Date, of Xxxxxxxxx, KassE&
Company, P.C. which meets the requirements of
subsectionE(a)(ii) of this Section;
except that, in each case, the specified date referred to in such
subsection will be a date not more than five days prior to such the
Closing Date for the purposes of this subsection.
The Issuer will furnish the Initial Purchasers with such conformed
copies of such opinions, certificates, letters and documents as the Initial
Purchasers reasonably request. CSFBC may in its sole discretion waive on behalf
of the Initial Purchasers compliance with any conditions to the obligations of
the Initial Purchasers hereunder, whether in respect of the Closing Date or
otherwise.
Any certificate of the Issuer or any of its subsidiaries signed by any
officer thereof and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Issuer
or such subsidiary to the Initial Purchasers as to the matters covered thereby
and not the representation and warranty of any such officer.
7. Indemnification and Contribution. (a) The Issuer, STFI and the
Subsidiaries, jointly and severally, will indemnify and hold harmless each
Initial Purchaser against any losses, claims, damages or liabilities, joint or
several, to which such Initial Purchaser may become subject, under the
Securities Act or the Securities Exchange Act of 1934 (the "Exchange Act") or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Documents, or
any amendment or supplement thereto, or any related preliminary offering
circular, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary in order to make the
30
statements therein, in the light of the circumstances under which they were
made, not misleading and will reimburse each Initial Purchaser for any legal or
other expenses reasonably incurred by such Initial Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Issuer, STFI and the
Subsidiaries 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 an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Issuer, STIF and the Subsidiaries by such Initial
Purchaser through CSFBC specifically for use therein, it being understood and
agreed that the such information only consists of the information described as
such in subsectionE(b) below; and provided further, however, that with respect
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary offering circular the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Initial Purchaser that sold
the Offered Securities concerned to the person asserting any such losses,
claims, damages or liabilities, to the extent that such sale was an initial
resale by such Initial Purchaser and any such loss, claim, damage or liability
of such Initial Purchaser results from the fact that there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
Offered Securities to such person, a copy of the Offering Documents (exclusive
of any material included therein but not attached thereto) if the Issuer had
previously furnished copies thereof to such Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, will indemnify
and hold harmless the Issuer, STFI and the Subsidiaries against any losses,
claims, damages or liabilities to which the Issuer, STFI and the Subsidiaries
may become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Offering Documents, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Issuer, STFI
and the Subsidiaries by such Initial Purchaser through CSFBC specifically for
use therein, and will reimburse any legal or other expenses reasonably incurred
by the Issuer, STFI and the Subsidiaries
31
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Initial Purchaser
consists of the following information in the Offering Documents furnished on
behalf of each Initial Purchaser: the last paragraph at the bottom of the cover
page concerning the terms of the offering by the Initial Purchasers; the legend
concerning over-allotments and stabilizing on the inside front cover page; and
the fifth paragraph, the third and fourth sentences of the seventh paragraph and
the eighth paragraph under the caption "Plan of Distribution."
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsectionE(a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsectionE(a) or (b) above except to the extent that the
indemnifying party is prejudiced by the failure to give such notice. 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 (who
shall not, except with the consent of the indemnified party, which consent shall
not unreasonably be withheld, be counsel to the indemnifying party if such
representation of both the indemnifying and the indemnified party would be
inappropriate due to an actual or potential conflict of interest between them),
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. No indemnifying party shall be
liable for any amounts paid in settlement of any action or claim without its
written consent, which consent shall not be unreasonably withheld.
32
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsectionE(a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsectionE(a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuer, STFI and
the Subsidiaries on the one hand and the Initial Purchasers on the other from
the offering of the Offered Securities or (ii) if the allocation provided by
clauseE(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clauseE(i)
above but also the relative fault of the Issuer, STFI and the Subsidiaries on
the one hand and the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer, STFI and the Subsidiaries on the one
hand and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Offered Securities
(before deducting expenses) received by the Issuer, STIF and the Subsidiaries
bear to the total discounts and commissions received by the Initial Purchasers
under this Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer, STFI and the Subsidiaries or the Initial
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsectionE(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsectionE(d). Notwithstanding the
provisions of this subsectionE(d), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered Securities purchased by it were resold exceeds the amount of any
damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations in this subsectionE(d) to contribute are several in
proportion to their respective purchase obligations and not joint.
33
(e) The obligations of the Issuer, STIF and the Subsidiaries under
this Section shall be in addition to any liability which the Issuer, STFI and
the Subsidiaries may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act or the Exchange Act; and the obligations of
the Initial Purchasers under this Section shall be in addition to any liability
which the respective Initial Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Issuer, STIF and the Subsidiaries within the meaning of the Securities Act or
the Exchange Act.
8. Default of Initial Purchasers. If any Initial Purchaser or Initial
Purchasers default in their obligations to purchase Offered Securities hereunder
and arrangements satisfactory to CSFBC and the Issuer for the purchase of such
Offered Securities by other persons are not made within 36Ehours after such
default, this Agreement will terminate without liability on the part of any
nondefaulting Initial Purchaser or the Issuer, STIF and the Subsidiaries, except
as provided in Section 9. As used in this Agreement, the term "Initial
Purchaser" includes any person substituted for a Initial Purchaser under this
Section. Nothing herein will relieve a defaulting Initial Purchaser from
liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer and the Guarantors or their officers and of the several Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Initial Purchaser, the Issuer, the
Guarantors or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if for any
reason the purchase of the Offered Securities by the Initial Purchasers is not
consummated, the Issuer and the Guarantors shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Issuer, the Guarantors and the Initial Purchasers pursuant to
Section 7 shall remain in effect. If the purchase of the Offered Securities by
the Initial Purchasers is not consummated for any reason other than solely
because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clauseE(C), (D) or (E) of Section 6(b)(ii),
the Issuer will reimburse the Initial Purchasers for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them (x) as
Initial Purchasers in connection with the offering of the Offered Securities and
34
(y) as Dealer Managers and Solicitation Agents in connection with the Debt
Tender Offer.
10. Notices. All communications hereunder will be in writing and, if
sent to the Initial Purchasers will be mailed, delivered or telegraphed and
confirmed to the Initial Purchasers, c/o CS First Boston Corporation, Park
Avenue Plaza, New York, NY 10055, Attention: Investment Banking DepartmentE--
Transactions Advisory Group, or, if sent to the Issuer, will be mailed,
delivered or telegraphed and confirmed to it at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxxxxxx, XXX00000, Attention: [XxxxxxxXX. Xxxxxx, Xxx., General Counsel];
provided, however, that any notice to a Initial Purchaser pursuant to Section 7
will be mailed, delivered or telegraphed and confirmed to such Initial
Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Issuer as if such holders
were parties thereto.
12. Representation of Initial Purchasers. CSFBC will act for the
several Initial Purchasers in connection with this purchase, and any action
under this Agreement taken by CSFBC will be binding upon all the Initial
Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEWEYORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Issuer hereby submits to the nonexclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with the Initial
Purchaser's understanding of our agreement, kindly sign and return to us
one of the counterparts hereof, whereupon it will become a binding
agreement between the Issuer and the several Initial Purchasers in
accordance with its terms.
Very truly yours,
35
SHARED TECHNOLOGIES XXXXXXXXX
COMMUNICATIONS CORP.
by: /s/ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
SHARED TECHNOLOGIES INC.
as Guarantor
by: /s/ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
MULTI-TENANT SERVICES, INC.,
as Guarantor
by: /s/ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
BOSTON TELECOMMUNICATIONS
GROUP, INC.,
as Guarantor
by: /s/ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
OFFICE TELEPHONE MANAGEMENT,
as Guarantor
by: /s/ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
36
STI INTERNATIONAL, INC.,
as Guarantor
by: /s/ Xxxxxxx XxXxxxxxxx
---------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Treasurer
The foregoing Purchase Agreement
is hereby confirmed
and accepted as of the date first
above written.
CS FIRST BOSTON CORPORATION
CITICORP SECURITIES, INC.
by: CS FIRST BOSTON CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
37
Schedule A
Principal Amount
Initial Purchaser of Offered Securities
CS First Boston $130,909,600
Citicorp Securities, Inc. 32,727,400
------------
Total 163,637,000
