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Exhibit 10.4
EXECUTION COPY
PURCHASE AGREEMENT
NEBRASKA BOOK COMPANY, INC.
$110,000,000
8 3/4% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
February 10, 1998
CHASE SECURITIES INC.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Nebraska Book Company, Inc., a Kansas corporation (the "Company"),
proposes to issue and sell $110,000,000 aggregate principal amount of its 8 3/4%
Senior Subordinated Notes due 2008 (the "Securities"). The Securities will be
issued pursuant to an Indenture to be dated as of February 13, 1998 (the
"Indenture") between the Company and United States Trust Company of New York, as
trustee (the "Trustee"). The Company hereby confirms its agreement with Chase
Securities Inc. ("CSI" or the "Initial Purchaser") concerning the purchase of
the Securities from the Company by the Initial Purchaser. For all purposes of
this Agreement, the term "Company" shall mean, as the context requires, (A)
prior to the consummation of the Merger (as hereinafter defined), Nebraska Book
Company, Inc., a Kansas corporation, and (B) upon consummation of the Merger,
the surviving corporation of the merger (the "Merger") of Nebraska Merger Corp.
("Merger Corp."), a corporation formed under Kansas law for purposes of
consummating the Merger, with and into Nebraska Book Company, Inc. pursuant to a
Merger Agreement (the "Merger Agreement") to be dated February 13, 1998 between
the Company and Merger Corp., an indirect wholly-owned subsidiary of HWH Capital
Partners, L.P.; provided that the Company shall not be a signatory to this
Agreement until the Closing Date (as defined below), on which date the Company
shall become a party to this Agreement.
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company and
Merger Corp. have prepared a preliminary offering memorandum dated January 28,
1998 (the "Preliminary Offering Memorandum") and will prepare an offering
memorandum dated the date hereof (the "Offering Memorandum") setting forth
information concerning the Company and the
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Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company and Merger Corp. to
the Initial Purchaser pursuant to the terms of this Agreement. Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, unless otherwise
noted. The Company and Merger Corp. hereby confirm that it has authorized the
use of the Preliminary Offering Memorandum and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchaser in accordance with Section 2.
Holders of the Securities (including the Initial Purchaser and its
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. Each
of Merger Corp., and upon execution and delivery by the Company of this
Agreement, the Company represents and warrants to, and agrees with, the Initial
Purchaser on and as of the date hereof and the Closing Date (as defined in
Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date
the Offering Memorandum will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided
that Merger Corp. and, upon execution and delivery by the Company of this
Agreement, the Company make no representation or warranty as to
information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum in reliance upon and in conformity
with written information relating to the Initial Purchaser furnished to
Merger Corp. by or on behalf of the Initial Purchaser specifically for use
therein (the "Initial Purchaser's Information").
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(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
the Initial Purchaser contained in Section 2 and its compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchaser and the
offer, resale and delivery of the Securities by the Initial Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its businesses requires such qualification,
and has all power and authority necessary to own or hold its properties
and to conduct the businesses in which it is engaged, except where the
failure to so qualify or have such power or authority would not,
singularly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Company (a "Material Adverse Effect"). The Company does
not have any subsidiaries.
(e) On the Closing Date (after giving effect to the
Recapitalization), the Company will have an authorized capitalization as
set forth in the Offering Memorandum under the heading "Capitalization";
all of the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and will have been fully paid and
non-assessable; and the capital stock of the Company will conform in all
material respects to the description thereof contained in the Offering
Memorandum.
(f) Merger Corp. and the Company have full right, power and
authority to execute and deliver this Agreement, the Indenture, the
Registration Rights Agreement, the Securities and the Merger Agreement
(collectively, the "Transaction Documents"), to the extent it is a party
thereto, and to perform its obligations hereunder and thereunder; and all
corporate action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents
and the consummation of
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the transactions contemplated thereby have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered
by Merger Corp. (which pursuant to Section 2 will have no obligation to
issue or sell the Securities hereunder) and on the Closing Date, will have
been duly authorized, executed and delivered by the Company (which as the
surviving corporation of the Merger will issue the Securities) and will
constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law) and except to the extent that indemnification or contribution
provisions may be unenforceable.
(h) The Registration Rights Agreement, when duly executed and
delivered by the Company on the Closing Date, will have been duly
authorized by the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute
a valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(i) The Indenture, when duly executed and delivered by the Company
on the Closing Date, will have been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture which
is qualified thereunder.
(j) The Securities when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein,
will have been duly authorized by
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the Company and, when duly executed, authenticated, issued and delivered
as provided in the Indenture and paid for as provided herein, will be duly
and validly issued and outstanding and will constitute valid and legally
binding obligation of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law).
(k) The Exchange Securities have been duly authorized by all
necessary corporate action of the Company, and when duly executed,
delivered and issued by the Company in accordance with the terms of the
Registration Rights Agreement and the Indenture and, assuming due
authentication thereof by the Trustee, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
morato rium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law);
(l) The Merger Agreement has been duly authorized, executed and
delivered by the Company and Merger Corp. and constitutes a valid and
legally binding agreement of the Company and Merger Corp. enforceable
against the Company and Merger Corp. in accordance with its terms, except
to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law).
(m) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(n) Except for agreements relating to existing indebtedness of the
Company that is being repaid or refinanced in connection with the
Recapitalization and which will cease to be in effect as of the Closing
Date, the execution, delivery and performance by Merger Corp. and the
Company of each of the Transaction Documents to which it is a party, the
issuance, authentication, sale and delivery of the Securities and
compliance by Merger Corp. and the Company with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents
will
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not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, except for such conflicts, breaches,
violations or defaults or liens, charges or encumbrances that would not,
singularly or in the aggregate, have a Material Adverse Effect or a
material adverse effect on Merger Corp.'s or the Company's ability to
perform its obligations under this Agreement and the Transaction Documents
to which it is a party, nor will such actions result in any violation of
the provisions of the charter or by-laws of the Company or any statute or
any judgment, order, decree, rule or regulation of any court or arbitrator
or governmental agency or body having jurisdiction over the Company or any
of its properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by Merger Corp. and the Company of each of the Transaction
Documents to which it is a party, the issuance, authentication, sale and
delivery of the Securities and compliance by Merger Corp. and the Company
with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which shall have been obtained or made prior to the Closing Date, (ii) as
may be required to be obtained or made under the Securities Act and
applicable state securities laws as provided in the Registration Rights
Agreement and (iii) the failure of which to obtain or make would,
singularly or in the aggregate, have a Material Adverse Effect or a
material adverse effect on Merger Corps.'s or the Company's ability to
perform its obligations under this Agreement and the Transaction Documents
to which it is a party.
(o) Deloitte & Touche LLP and Xxxxxx Xxxxxxxx LLP are independent
certified public accountants with respect to the Company within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Offering
Memorandum have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods covered
thereby and fairly present the financial position of the entities
purported to be covered thereby at the respective dates indicated and the
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results of its operations and its cash flows for the respective periods
indicated; and the financial information contained in the Offering
Memorandum under the headings "Summary--Summary Historical Financial
Data", "Summary--Summary Pro Forma Financial Data", "Capitalization",
"Selected Historical Financial Data", "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Management--Executive Compensation" are derived from the accounting
records of the Company and fairly present the information purported to be
shown thereby. The pro forma financial information contained in the
Offering Memorandum has been prepared on a basis consistent with the
historical financial statements contained in the Offering Memorandum
(except for the pro forma adjustments specified therein), the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements and in the case of the pro forma
adjustments relating to the Acquisitions (as defined in the Offering
Memorandum) the pro forma adjustments have been derived from the
historical financial statements of Specialty Books, Inc., Collegiate
Stores Corporation and South Carolina Bookstore, Inc. copies of which have
been provided to you and the pro forma adjustments give effect to
assumptions made on a reasonable basis and fairly presents the historical
and proposed transactions contemplated by the Offering Memorandum and the
Transaction Documents. The other historical financial and statistical
information and data included in the Offering Memorandum are, in all
material respects, fairly presented.
(p) There are no legal or governmental proceedings pending to which
the Company is a party or of which any property or assets of the Company
is the subject which, singularly or in the aggregate, if determined
adversely to the Company, could reasonably be expected to have a Material
Adverse Effect; and to the best knowledge of Merger Corp. and the Company,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities or suspends the sale of
the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company which would
prevent or suspend the issuance or sale of the Securities or the use of
the Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to the
best knowledge of Merger Corp. and the Company, threatened against or
affecting the Company before any court or arbitrator or any governmental
agency, body or official,
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domestic or foreign, which could reasonably be expected to interfere with
or adversely affect the issuance of the Securities or in any manner draw
into question the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and Merger
Corp. and the Company have complied with any and all requests by any
securities authority in any jurisdiction for additional information to be
included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(r) The Company is not (i) in violation of its charter or by-laws,
(ii) except for agreements relating to existing indebtedness of the
Company that is being repaid or refinanced in connection with the
Recapitalization and which will cease to be in effect as of the Closing
Date, in default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its property or assets is
subject or (iii) in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject.
(s) The Company possesses all material licenses, certificates,
authorizations and permits issued by, and has made all declarations and
filings with, the appropriate federal, state or foreign regulatory
agencies or bodies which are necessary or desirable for the ownership of
its properties or the conduct of its businesses as described in the
Offering Memorandum, except where the failure to possess or make the same
would not, singularly or in the aggregate, have a Material Adverse Effect,
and neither the Company nor Merger Corp. has received notification of any
revocation or modification of any such license, certificate, authorization
or permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course, except
where such revocation, modification or nonrenewal would not, singularly or
in the aggregate, have a Material Adverse Effect.
(t) The Company has filed or requested extensions with respect to
all federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and has paid all taxes due
thereon, except for taxes being contested in good faith and as to which
adequate reserves have been established or taxes currently payable without
penalty or interest, except where the failure to so file or make such
payments would not, singularly or in the aggregate, have a Material
Adverse Effect, and no tax deficiency has been determined adversely to the
Company
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which has had (nor do Merger Corp. or the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company could
reasonably be expected to have) a Material Adverse Effect.
(u) The Company is not (i) an "investment company" or a company
"controlled by" an investment company within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
rules and regulations of the Commission thereunder or (ii) a "holding
company" or a "subsidiary company" of a holding company or an "affiliate"
thereof within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The Company has insurance covering its properties, operations,
personnel and businesses, which insurance is in amounts and insures
against such losses and risks as are prudent and customary in the business
in which it is engaged. Neither Merger Corp. nor the Company has received
notice from any insurer or agent of such insurer that capital improvements
or other expenditures are required or necessary to be made in order to
continue such insurance.
(x) The Company owns or possesses adequate rights to use all
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of its businesses, except where the
failure to so own or possess such rights would not, singularly or in the
aggregate, have a Material Adverse Effect; and neither Merger Corp. nor
the Company has any reason to believe that the conduct of its businesses
as currently conducted and contemplated will conflict in any material
respect with, and neither Merger Corp. nor the Company has received any
notice of any claim of conflict with, any such rights of others, in either
case which would, singularly or in the aggregate, have a Material Adverse
Effect.
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(y) The Company has good and marketable title in fee simple to, or
have valid rights to lease or otherwise use, all items of real and
personal property which are material to the business of the Company, in
each case free and clear of all liens, encumbrances, claims and defects
and imperfections of title except such as (i) do not materially interfere
with the use made and proposed to be made of such property by the Company,
(ii) as are contemplated or permitted under the Credit Agreement dated as
of August 31, 1995 among NBC Acquisition Corp., the Company, the financial
institutions listed on schedule 2.01 thereto and The Chase Manhattan Bank,
as administrative agent and the related collateral and security agreements
or (iii) could not reasonably be expected to have a Material Adverse
Effect.
(z) No labor disturbance by or dispute with the employees of the
Company exists or, to the best knowledge of Merger Corp. and the Company,
is contemplated or threatened which could, singularly or in the aggregate,
have a Material Adverse Effect.
(aa) No non-exempt "prohibited transaction" (as defined in Section
406 of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events set
forth in Section 4043(b) of ERISA (other than events with respect to which
the 30-day notice requirement under Section 4043 of ERISA has been waived)
has occurred with respect to any employee benefit plan of the Company
which could reasonably be expected to have a Material Adverse Effect; each
such employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company has not incurred
and does not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any pension plan for
which the Company would have any liability; and each such pension plan
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could reasonably be expected to cause
the loss of such qualification.
(bb) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of any
kind of toxic or other wastes or other hazardous substances by, due to or
caused by the Company (or, to the best knowledge of Merger Corp. and the
Company, any other entity (including any predecessor) for whose acts or
omissions the Company is or could reasonably be expected to be liable)
upon any of the property now or previously owned or leased by the Company,
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or upon any other property, in violation of any statute or any ordinance,
rule, regulation, order, judgment, decree or permit or which would, under
any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability that could not reasonably be
expected to have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Effect; and there has been no
disposal, discharge, emission or other release of any kind onto such
property or into the environment surrounding such property of any toxic or
other wastes or other hazardous substances with respect to which Merger
Corp. or the Company has knowledge, except for any such disposal,
discharge, emission or other release of any kind which could not
reasonably be expected to have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect.
(cc) Neither the Company nor, to the best knowledge of Merger Corp.
and the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977;
or (iv) made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(dd) On and immediately after the Closing Date, the Company (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the Company
is not less than the total amount required to pay the probable liabilities
of the Company on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (ii) the
Company is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of
the Securities as contemplated by this Agreement and the Offering
Memorandum, the Company is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature and (iv) the Company
is not engaged in any business or transaction, and is not about to engage
in any business or transaction, for which its property would constitute
unreasonably small capital after giving due
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consideration to the prevailing practice in the industry in which the
Company is engaged. In computing the amount of such contingent liabilities
at any time, it is intended that such liabilities will be computed at the
amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
(ee) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the
Company.
(ff) The Company does not own any "margin securities" as that term
is defined in Regulations G and U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds of
the sale of the Securities will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might
cause any of the Securities to be considered a "purpose credit" within the
meanings of Regulation G, T, U or X of the Federal Reserve Board.
(gg) Other than as disclosed in the Offering Memorandum, neither
Merger Corp. nor the Company is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company or the Initial Purchaser for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of
the Securities.
(hh) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ii) None of Merger Corp., the Company, any of their respective
affiliates or any person acting on their behalf has engaged or will engage
in any directed selling efforts (as such term is defined in Regulation S
under the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable.
(jj) Neither Merger Corp., the Company nor any of their respective
affiliates has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as such term is defined in the Securities Act), which is or will
be integrated with the sale of the Securities in a manner that
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would require registration of the Securities under the Securities Act.
(kk) None of Merger Corp., the Company or any of their respective
affiliates or any other person acting on their behalf has engaged, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act.
(ll) There are no securities of the Company registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
listed on a national securities exchange or quoted in a U.S. automated
inter-dealer quotation system.
(mm) Neither Merger Corp. nor the Company has taken and will not
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with the offering of the Securities.
(nn) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in
the Preliminary Offering Memorandum or the Offering Memorandum has been
made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(oo) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business, (ii)
the Company has not incurred any material liability or obligation, direct
or contingent, other than in the ordinary course of business, (iii) the
Company has not entered into any material transaction other than in the
ordinary course of business and (iv) there has not been any change in the
capital stock or long-term debt of the Company, or any dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(pp) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources which Merger
Corp. and the Company believes to be reliable.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein and consummation of the Merger, Merger
Corp. agrees to cause the Company to, and upon becoming a party to this
Agreement on the
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Closing Date, the Company agrees to issue and sell to the Initial Purchaser and
the Initial Purchaser agrees to purchase from the Company, $110,000,000
principal amount of Securities at a purchase price equal to 97.00% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchaser has advised Merger Corp. that it proposes
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Offering Memorandum. The Initial Purchaser
represents, warrants to, and agrees with, Merger Corp. and the Company that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) has solicited and will solicit
offers for the Securities only from, and has offered or sold and will offer,
sell or deliver the Securities, as part of its offering, only (A) within the
United States to persons whom it reasonably believes to be qualified
institutional buyers ("Qualified Institutional Buyers"), as defined in Rule 144A
under the Securities Act ("Rule 144A"), or if any such person is buying for one
or more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A and in each case, in
transactions in accordance with Rule 144A and (B) outside the United States to
persons other than U.S. persons in reliance on Regulation S under the Securities
Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, the Initial Purchaser represents, warrants and agrees that:
(i) The Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act.
(ii) The Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of its distribution at any
time and (B) otherwise until 40 days after the later of the commencement
of the offering of the Securities and the Closing Date, only in accordance
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with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act.
(iii) None of the Initial Purchaser or any of its affiliates or any
other person acting on its behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchase Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering of the Securities and the
date of original issuance of the Securities, except in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) The Initial Purchaser represents, warrants and agrees that (i)
it has not offered or sold and prior to the date six months after the Closing
Date will not offer or sell any Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Xxx 0000 and the
Public Offers of Securities Regulations 1995 with respect to anything done by it
in relation to the
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Securities in, from or otherwise involving the United Kingdom; and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Securities to a
person who is a kind described in Article 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.
(e) The Initial Purchaser agrees that, prior to or simultaneously
with the confirmation of sale by the Initial Purchaser to any purchaser of any
of the Securities purchased by the Initial Purchaser from the Company pursuant
hereto, the Initial Purchaser shall furnish to that purchaser a copy of the
Offering Memorandum (and any amendment or supplement thereto that the Company
shall have furnished to such Initial Purchaser prior to the date of such
confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Sections 5(d) and (e), counsel
for the Company and for the Initial Purchaser, respectively, may rely upon the
accuracy of the representations and warranties of the Initial Purchaser and its
compliance with its agreements contained in this Section 2, and the Initial
Purchaser hereby consents to such reliance.
(f) Merger Corp. and, upon becoming a party to this Agreement on the
Closing Date, the Company acknowledge and agree that the Initial Purchaser may
sell Securities to any affiliate of the Initial Purchaser and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser to the
extent such sales are in compliance with the covenants, and do not conflict with
the representations and warranties, of the Initial Purchaser in this Section 2.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchaser, Merger Corp. and the Company, at 9:00 A.M., New York City
time, on February 13, 1998, or at such other time or date as shall be agreed
upon by the Initial Purchaser, Merger Corp. and the Company (such date and time
of payment and delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchaser of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the
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Initial Purchaser hereunder. Upon delivery, the Securities shall be in global
form, registered in such names and in such denominations as the Initial
Purchaser shall have requested in writing not less than two full business days
prior to the Closing Date. The Company agrees to make one or more global
certificates evidencing the Securities available for inspection by CSI on behalf
of the Initial Purchaser in New York, New York at least 24 hours prior to the
Closing Date.
4. Further Agreements of the Company. Merger Corp. and, upon the
execution and delivery by the Company of this Agreement, the Company agree with
the Initial Purchaser:
(a) to advise the Initial Purchaser promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchaser promptly of any
order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction
and of the initiation or threatening of any proceeding for any such
purpose; and to use its best efforts to prevent the issuance of any such
order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum or suspending any such qualification
and, if any such suspension is issued, to obtain the lifting thereof at
the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel for the
Initial Purchaser, without charge, as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum (and any amendments or
supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to the Initial Purchaser and counsel
for the Initial Purchaser and not to effect any such amendment or
supplement to which the Initial Purchaser shall reasonably object by
notice to Merger Corp. or the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchaser or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a
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material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading, or if it is necessary
to amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be necessary
to correct such untrue statement or omission or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable
law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request of
such holders or such prospective purchasers, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless
the Company is then subject to and in compliance with Section 13 or 15(d)
of the Exchange Act (the foregoing agreement being for the benefit of the
holders from time to time of the Securities and prospective purchasers of
the Securities designated by such holders);
(f) for so long as the Securities are outstanding, to furnish to the
Initial Purchaser copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall be
furnished by the Company to the Trustee or to the holders of the
Securities pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchaser may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchaser
may reasonably request; provided that the Company shall not be obligated
to qualify as a foreign corporation in any jurisdiction in which it is not
so qualified or to file a general consent to service of process in any
jurisdiction or to subject itself to material taxation in any jurisdiction
where it is not so subject;
(h) to assist the Initial Purchaser in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations
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adopted by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market and for the Securities to be
eligible for clearance and settlement through The Depository Trust Company
("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to authorize
or knowingly permit any person acting on its behalf to, solicit any offer
to buy or offer to sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D or
in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act; and not to offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to
be applicable to the offering and sale of the Securities as contemplated
by this Agreement and the Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement for,
or announce any offer, sale, contract for sale of or other disposition of
any debt securities issued or guaranteed by the Company (other than the
Securities) without the prior written consent of the Initial Purchaser;
(l) during the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchaser, not to, and not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that
have been reacquired by them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a
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closed-end investment company required to be registered, but not
registered thereunder;
(n) in connection with the offering of the Securities, until CSI
shall have notified the Company of the completion of the resale of the
Securities, not to, and to cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or
more other persons, bid for or purchase, for any account in which it or
any of its affiliated purchasers has a beneficial interest, any
Securities, or attempt to induce any person to purchase any Securities;
and not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active trading
in or of raising the price of the Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchaser;
(p) to furnish to the Initial Purchaser on the date hereof a copy of
the independent accountants' report included in the Offering Memorandum
signed by the accountants rendering such report;
(q) to do and perform all things required to be done and performed
by it under this Agreement that are within its control prior to or after
the Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(r) except as contemplated in the Offering Memorandum including,
without limitation, the consummation of the Recapitalization, to not take
any action prior to the execution and delivery of the Indenture which, if
taken after such execution and delivery, would have violated any of the
covenants contained in the Indenture;
(s) to not take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(t) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Initial Purchaser
is notified), without the prior written consent of the Initial Purchaser,
unless in the judgment of the Company and its counsel, and after
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notification to the Initial Purchaser, such press release or communication
is required by law; and
(u) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
Notwithstanding any provision of Sections 4(a) or 4(d) to the
contrary, the Company's obligations under Sections 4(a) or 4(d) shall terminate
on the earliest to occur of (i) the effective date of an Exchange Offer
Registration Statement pursuant to the Registration Rights Agreement, (ii) the
effective date of a Shelf Registration Statement pursuant to the Registration
Rights Agreement and (iii) the date upon which the Initial Purchaser and its
affiliates cease to hold Securities acquired as part of the initial
distribution, the occurrence of which the Initial Purchaser shall promptly
notify the Company.
5. Conditions of Initial Purchaser' Obligations. The obligations of
the Initial Purchaser hereunder are subject to the accuracy, on and as of the
date hereof and the Closing Date, of the representations and warranties of
Merger Corp. and the Company contained herein, to the accuracy of the statements
of the Company and its officers made in any certificates delivered pursuant
hereto, to the performance by Merger Corp. and the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchaser
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) On the date thereof, the Offering Memorandum (or any amendment
of supplement thereto) did not, and on the Closing Date the Offering
Memorandum (or any amendment or supplement thereto) shall not contain an
untrue statement of a fact which, in the reasonable opinion of counsel for
the Initial Purchaser, is material or omits to state any fact which, in
the reasonable opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents
and the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the
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Initial Purchaser, and the Company shall have furnished to the Initial
Purchaser all documents and information that they or its counsel may
reasonably request to enable them to pass upon such matters.
(d) Each of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx and Xxxxxxxx,
Xxxxx & Xxxxxxxxx shall have furnished to the Initial Purchaser their
written opinions, as counsel to Merger Corp. and the Company, addressed to
the Initial Purchaser and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchaser, substantially to the
effect set forth in Annex B-1 and B-2 respectively, hereto.
(e) The Initial Purchaser shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchaser two
letters (the "Initial Letters"), one of Deloitte & Touche LLP and one of
Xxxxxx Xxxxxxxx LLP, addressed to the Initial Purchaser and dated the date
hereof, in form and substance satisfactory to the Initial Purchaser,
substantially to the effect set forth in Annex C and D hereto.
(g) The Company shall have furnished to the Initial Purchaser two
letters (the "Bring-Down Letters"), one of Deloitte & Touche LLP and one
of Xxxxxx Xxxxxxxx LLP, addressed to the Initial Purchaser and dated the
Closing Date (i) confirming that they are independent public accountants
with respect to the Company and its subsidiaries within the meaning of
Rule 101 of the Code of Professional Conduct of the AICPA and its
interpretations and rulings thereunder, (ii) stating, as of the date of
the Bring-Down Letters (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more
than three business days prior to the date of the Bring-Down Letters),
that the conclusions and findings of such accountants with respect to the
financial information and other matters covered by the Initial Letters are
accurate and (iii) confirming in all material respects the conclusions and
findings set forth in the Initial Letters.
(h) The Company shall have furnished to the Initial Purchaser a
certificate, dated the Closing Date, of its chief executive officer and
its chief financial officer stating that (A) such officers have carefully
examined the
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Offering Memorandum, (B) in their opinion, the Offering Memorandum, as of
its date, did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and since the
date of the Offering Memorandum, no event has occurred which should have
been set forth in a supplement or amendment to the Offering Memorandum so
that the Offering Memorandum (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading and (C) to the best of such officer's
knowledge after reasonable investigation as of the Closing Date, the
representations and warranties of the Company in this Agreement are true
and correct in all material respects, the Company has complied in all
material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder on or prior to the Closing
Date, and subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material adverse
change in the financial position or results of operation of the Company,
or any change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company, except as set forth in the Offering
Memorandum.
(i) The Initial Purchaser shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company.
(j) The Indenture shall have been duly executed and delivered by the
Company and the Trustee, and the Securities shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee.
(k) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(l) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchaser shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchaser reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A
under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation
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under the Securities Act or the Exchange Act by the Commission or any
amendment or proposed amendment thereof by the Commission which in the
judgment of the Initial Purchaser would materially impair the ability of
the Initial Purchaser to purchase, hold or effect resales of the
Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company, the effect of which, in any such case described
above, is, in the judgment of the Initial Purchaser, so material and
adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum (exclusive of
any amendment or supplement thereto).
(o) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Securities; and no injunction, restraining order or order
of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Securities
or any of the Company's other debt securities or preferred stock by any
"nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review (other than an announcement with positive implications of a
possible upgrading), its rating of the Securities or any of the Company's
other debt securities or preferred stock.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities
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of the Company on any exchange or in the over-the-counter market shall
have been suspended or (ii) any moratorium on commercial banking
activities shall have been declared by federal or New York state
authorities or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in the
case of this clause (iv), is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or the delivery of the Securities on the terms and in the
manner contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(r) The transactions contemplated by the Recapitalization, as
defined in the Offering Memorandum, shall have been consummated.
(s) The Initial Purchaser shall have received on the Closing Date a
counterpart to this Agreement executed by the Company.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser hereunder
may be terminated by the Initial Purchaser, in its absolute discretion, by
notice given to and received by Merger Corp. prior to delivery of and payment
for the Securities if, prior to that time, any of the events described in
Section 5(m), (n), (o), (p) or (q) shall have occurred and be continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement, Merger Corp. shall reimburse the Initial Purchaser for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchaser in connection
with this Agreement and the proposed purchase and resale of the Securities.
8. Indemnification. (a) Merger Corp., and following the execution
and delivery of this Agreement by the Company, the Company shall indemnify and
hold harmless the Initial Purchaser, its affiliates, its respective officers,
directors, employees,
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representatives and agents, and each person, if any, who controls the Initial
Purchaser within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 8(a) and Section 9 as the
Initial Purchaser), from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which the Initial Purchaser may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or in any information provided by the
Company pursuant to Section 4(e) or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse the Initial Purchaser
promptly upon demand for any legal or other expenses reasonably incurred by the
Initial Purchaser in connection with investigating or defending or preparing to
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that Merger Corp. and the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with the Initial Purchaser's Information; and provided,
further, that with respect to any such untrue statement in or omission from the
Preliminary Offering Memorandum, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of the Initial Purchaser to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by the Initial Purchaser and any such
loss, claim, damage, liability or action of or with respect to the Initial
Purchaser results from the fact that both (A) to the extent required by
applicable law, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Securities to
such person and (B) the untrue statement in or omission from the Preliminary
Offering Memorandum was corrected in the Offering Memorandum unless, in either
case, such failure to deliver the Offering Memorandum was a result of
non-compliance by Merger Corp. or the Company with Section 4(b).
(b) The Initial Purchaser shall indemnify and hold harmless Merger
Corp., the Company, its affiliates, its respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
Merger Corp. or the Company within the meaning of the Securities Act or the
Exchange
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Act (collectively referred to for purposes of this Section 8(b) and Section 9 as
the Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which Merger Corp. or the Company
may become subject, whether commenced or threatened, under the Securities Act,
the Exchange Act, any other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the Initial Purchaser's Information, and shall
reimburse Merger Corp. or the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the
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expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based upon advice of counsel to
the indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or 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 claims
that are the subject matter of such proceeding.
The obligations of Merger Corp., the Company and the Initial
Purchaser in this Section 8 and in Section 9 are in addition to any other
liability that Merger Corp., the Company or the Initial Purchaser, as the case
may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each
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indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by Merger Corp. and the Company on the one hand and the Initial
Purchaser on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of Merger Corp. and
the Company on the one hand and the Initial Purchaser on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by Merger Corp. or the Company on
the one hand and the Initial Purchaser on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by or on behalf of the Company, on the one hand,
and the total discounts and commissions received by the Initial Purchaser with
respect to the Securities purchased under this Agreement, on the other, bear to
the total gross proceeds from the sale of the Securities under this Agreement,
in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to Merger Corp. or
the Company or information supplied by Merger Corp. or the Company on the one
hand or to the Initial Purchaser's Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Merger Corp., the Company
and the Initial Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 9 were to be determined by pro rata
allocation (even if the Initial Purchaser were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 9 shall be deemed
to include, for purposes of this Section 9, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 9, the Initial Purchaser shall not be required to
contribute any amount in excess of the amount by which the total discounts and
commissions received by the Initial Purchaser with respect to the Securities
purchased by it under this Agreement exceeds the amount of any damages which the
Initial Purchaser has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or
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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.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser, Merger Corp.,
the Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of Merger Corp., the
Company and the Initial Purchaser and in Section 4(e) with respect to holders
and prospective purchasers of the Securities. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 10, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
11. Expenses. Merger Corp. and, upon the execution and delivery of
this Agreement by the Company, the Company agree with the Initial Purchaser to
pay (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection, provided,
however, that the cost of renting an aircraft for use during the marketing of
the Securities will be borne equally by the Company and its parent, NBC
Acquisition Corp., on the one hand and the Initial Purchaser on the other hand;
(b) the costs incident to the preparation, printing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and any amendments or
supplements thereto; (c) the costs of reproducing and distributing each of the
Transaction Documents; (d) the costs incident to the preparation, printing and
delivery of the certificates evidencing the Securities, including stamp duties
and transfer taxes, if any, payable upon issuance of the Securities; (e) the
fees and expenses of the Company's counsel and independent accountants; (f) the
fees and expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 4(h) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
for the Initial Purchaser); (g) any fees charged by rating agencies for rating
the Securities; (h) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties); (i) all
expenses and application fees incurred in connection with the application for
the inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC; and (j) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement which are not otherwise specifically provided for in this Section 11;
provided, however, that except as provided in this Section 11 and Section 7, the
Initial Purchaser shall pay its own costs and expenses.
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12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of Merger Corp., the Company and the
Initial Purchaser contained in this Agreement or made by or on behalf of the
Company or the Initial Purchaser pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxx (telecopier no.: (212)
270-0994); or
(b) if to Merger Corp. or the Company, shall be delivered or sent by
mail or telecopy transmission to the address of the Company set forth in
the Offering Memorandum, Attention: Chief Executive Officer (telecopier
no.: (000)000-0000);
provided that any notice to the Initial Purchaser pursuant to Section 8(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Initial Purchaser's Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchaser's
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchaser;
(ii) the legend on the inside front cover page concerning over-allotment and
trading activities by the Initial Purchaser; and (iii) the statements concerning
the Initial Purchaser contained in the first and second sentences of the third
paragraph, the second sentence of the ninth paragraph, the twelfth paragraph,
and the thirteenth paragraph under the heading "Plan of Distribution".
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16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
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19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to Merger Corp. a counterpart hereof,
whereupon this instrument will become a binding agreement among Merger Corp.
and, following the execution and delivery by the Company of this Agreement on
the Closing Date, the Company, on the one hand, and the Initial Purchaser, on
the other hand, in accordance with its terms.
Very truly yours,
NEBRASKA BOOK COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEBRASKA MERGER CORP.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Accepted:
CHASE SECURITIES INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------
Authorized Signatory
Address for notices pursuant to Section 8(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
