EXHIBIT 4.3
DESA INTERNATIONAL, INC.
$130,000,000
97/8% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
November 21, 1997
NationsBanc Xxxxxxxxxx Securities, Inc.
UBS Securities LLC
c/o NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Desa International, Inc., a Delaware corporation ("Desa" or
the "Company"), proposes to issue and sell to you (the "Initial Purchasers")
$130,000,000 in aggregate principal amount of its 97/8% Senior Subordinated
Notes due 2007 (the "Notes"). The Notes will be fully and unconditionally
guaranteed (the "Holdings Guarantee" and, collectively with the Notes, the
"Securities") on a senior subordinated basis by Desa Holdings Corporation, a
Delaware corporation and the parent of the Company ("Holdings," and together
with the Company, the "Issuers").
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
and Holdings that you will offer and sell the Securities purchased by you
hereunder in accordance with Section 2 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated November 6, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated November 21,
1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company, Holdings and
the Securities. Each of the Issuers hereby confirms that it has authorized the
use of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Unless stated to the contrary, all references herein to
the Final Memorandum are to the Final Memorandum at the time of execution and
delivery of this Agreement (the "Execution Time") and are not meant to include
any amendment or supplement, or any information incorporated by reference
therein, subsequent to the Execution Time.
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Company and Holdings
will agree to use their best efforts to commence an offer to exchange the
Securities for the Company's 97/8% Senior Subordinated Notes due 2007 (the "New
Notes"), which will also be guaranteed by the Holdings Guarantee (together with
the New Notes, the "Exchange Securities"), that have been registered under the
Securities Act, and that otherwise are identical in all respects to the
Securities, or to cause a shelf registration statement to become effective under
the Securities Act and to remain effective for the period designated in such
Registration Rights Agreement.
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The Securities are being issued and sold in connection with
the recapitalization (the "Recapitalization") of Holdings, pursuant to a stock
purchase agreement dated as of October 8, 1997, as amended through the date
hereof (the "Recapitalization Agreement") between Holdings, X.X. Childs Equity
Partners, L.P. ("Childs") and the stockholders of Holdings named therein.
Pursuant to the Recapitalization Agreement, Childs and certain other investors
are to acquire 89.6% of the equity interests of Holdings. In order to finance
the Recapitalization (which includes the retirement of existing indebtedness of
the Company and Holdings), in addition to the sale of the Securities hereunder,
Holdings will require additional financing of up to approximately $230.1
million. Of such amount, (i) approximately $100.0 million be provided by an
investment (the "Equity Financing") by Childs, UBS Capital LLC and certain
existing stockholders of Holdings (including certain members of management of
Holdings) (the "Investors") in the equity interests of Holdings (which shall
include $73.8 million in Holdings' common stock and, $17.6 million in Holdings'
preferred stock and $8.6 million in non-cash resources) and (ii) approximately
$130.1 million will come through borrowings under $195.0 million of senior
secured bank loan facilities made available to Desa (the "New Credit Facility").
The Recapitalization Agreement and the documents entered into
in connection therewith including, without limitation, the agreements attached
thereto as exhibits, are herein collectively referred to as the
"Recapitalization Documents." This Agreement, the Registration Rights Agreement,
the Notes, the Indenture and the Holdings Guarantee are herein collectively
referred to as the "Offering Documents." The Offering Documents, the New Credit
Facility, the Recapitalization Documents, the documents pursuant to which the
Equity Financing will be consummated and the documents necessary for the
repayment of the Company's and Holding's existing indebtedness and any other
documents necessary to consummate the Recapitalization are herein collectively
referred to as the "Transaction Documents." The time of the consummation of the
Recapitalization is referred to herein as the "Effective Time."
1. Representations and Warranties. The Company and Holdings jointly and
severally represent and warrant to each Initial Purchaser as follows:
(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Final Memorandum, at the date hereof, does not,
and at the Closing Date (as defined below) will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will not),
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however that the Company
and Holdings make no representation or warranty as to the information relating
to the Initial Purchasers contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Initial Purchasers specifically for inclusion
therein.
(b) Neither the Company, nor Holdings, nor any of their
"Affiliates" (as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D")), nor any person acting on their behalf
has, directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
Neither the Company, nor Holdings, nor any of their Affiliates, nor any
person acting on their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities, provided,
that neither the Company nor Holdings makes any representations
regarding the Initial Purchasers. The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the Securities Act.
The Final Memorandum and each amendment or supplement thereto, as of
its date, contains the information specified in Rule 144A(d)(4) under
the Securities Act. The Company will use its best efforts to work with
the National Association of Securities Dealers, Inc. Private Offerings,
Resales and Trading through the Automated Linkages Market ("PORTAL") to
insure that the Securities will be designated
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PORTAL eligible securities in accordance with the rules and regulations
of the National Association of Securities Dealers, Inc.
(c) Assuming (i) that the representations and warranties and
covenants of the Initial Purchasers contained in Section 3 hereof are
true and correct and (ii) that the Initial Purchasers comply with their
agreements contained in Section 3 hereof, (A) registration under the
Securities Act of the Securities or qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), is not required in connection with the offer and sale of the
Securities to the Initial Purchasers in the manner contemplated by the
Final Memorandum or this Agreement and (B) initial resales of the
Securities by the Initial Purchasers on the terms and in the manner set
forth in the Final Memorandum and Section 3 hereof are exempt from the
registration requirements of the Securities Act.
(d) Since the respective dates of the most recent financial
statements appearing in the Preliminary Memorandum and the Final
Memorandum, except as otherwise stated therein, (i) neither the Company
nor Holdings has or, at and as of the Effective Time, will have
incurred any liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or contracts
(written or oral) not in the ordinary course of business which
liabilities, obligations, transactions or contracts would, individually
or in the aggregate, be material to the condition, financial or
otherwise, earnings, affairs or business prospects of the Company or
Holdings, (ii) neither the Company nor Holdings has, or, at and as of
the Effective Time, will have purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock, except as otherwise set
forth in the Preliminary Memorandum and the Final Memorandum and (iii)
there shall not have been any change in the capital stock or long-term
indebtedness of the Company or Holdings, except for those changes in
capital stock and long-term indebtedness contemplated by the
Transaction Documents.
(e) Each of the Company and Holdings is and, after giving
effect to the Recapitalization, will be, duly incorporated, and
validity existing as a corporation in good standing under the laws of
Delaware with corporate power and authority to own, lease and operate
its properties and conduct its businesses as described in the
Preliminary Memorandum and the Final Memorandum; each of the Company
and Holdings is and, after giving effect to the Recapitalization, will
be, duly qualified as a foreign corporation to transact business, and
is, and, after giving effect to the Recapitalization will be, in good
standing in each jurisdiction in which either owns or leases properties
or in which the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not (i) have a material adverse effect on the assets,
business, condition (financial or otherwise), results of operations or
prospects of the Company, Holdings or their subsidiaries, taken as a
whole or (ii) materially and adversely affect the offering of the
Securities or any of the other transactions contemplated by the
Transaction Documents (any such event, a "Material Adverse Effect").
Attached as Schedule A hereto is a complete and accurate list
of each direct and indirect subsidiary and each other investment of the
Company and Holdings and the jurisdictions of organization of such
subsidiary or other investment. Each of the Company's and Holdings'
respective subsidiaries is and, after giving effect to the
Recapitalization, will be, duly incorporated, and validity existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation with corporate power and authority to own, lease and
operate its properties and conduct its businesses as described in the
Preliminary Memorandum and the Final Memorandum; each of the Company's
and Holdings' subsidiaries is and, after giving effect to the
Recapitalization, will be, duly qualified as a foreign corporation to
transact business, and is, and, after giving effect to the
Recapitalization will be, in good standing in each jurisdiction in
which either owns or leases properties or in which the conduct of its
business requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect. Except as set forth in Schedule A attached
hereto, all of the capital stock of each direct or indirect subsidiary
and other investment of
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the Company or Holdings, is owned by the Company, Holdings or another
subsidiary of either the Company or Holdings, free and clear of any
lien or security interest or other encumbrance.
(f) Each of the Company and Holdings has, and after giving
effect to the Recapitalization, will have the authorized, issued and
outstanding capitalization set forth in the Preliminary Memorandum and
the Final Memorandum; all of the outstanding shares of capital stock of
the Company and Holdings are and, after giving effect to the
Recapitalization, will be duly authorized and validly issued, fully
paid and nonassessable and not issued in violation of any preemptive or
similar rights.
(g) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of capital stock of, or other ownership interest in, the
Company or Holdings, except as otherwise disclosed in the Preliminary
Memorandum and the Final Memorandum. At and as of the Effective Time,
there will be no outstanding subscriptions, rights, warrants options,
calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares
of capital stock of, or other ownership interest in, the Company or
Holdings except as otherwise disclosed in the Preliminary Memorandum
and the Final Memorandum.
(h) Neither the Company nor Holdings nor any of their
respective subsidiaries is, or after giving effect to the
Recapitalization, will be (i) in violation of its charter documents,
(ii) in breach or violation of any law, administrative regulation or
administrative or court decree or (iii) in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which its respective properties may be bound, other than with respect
to clauses (ii) and (iii), breaches, violations or defaults which would
not have a Material Adverse Effect.
(i) No consent, approval, authorization or order of any court
or governmental authority or agency, or third party is required for the
performance of any of the Transaction Documents by the Company,
Holdings or any of their subsidiaries or the consummation of the
transactions contemplated by the Transaction Documents, except such as
may be required under state securities or Blue Sky laws or as set forth
in the Registration Rights Agreement. The execution, delivery and
performance by the Company, Holdings or any of their subsidiaries of
the Transaction Documents and the consummation of the transactions
contemplated thereby will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company,
Holdings or any of their subsidiaries, pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the either Company, Holdings or any of their
subsidiaries is a party or by which any of them may be bound or to
which any of the property or assets of the Company, Holdings or any of
their subsidiaries is, or after giving effect to the Recapitalization,
will be subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, Holdings or any of
their subsidiaries or any law, rules, regulation or administrative or
court decree.
(j) Each of the Company, Holdings and their respective
subsidiaries possesses, and after giving effect to the
Recapitalization, will possess, adequate certificates, authorities,
permits or other authorizations (collectively, "Permits") including,
without limitation, under any applicable Environmental Laws (as defined
herein), issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct its business as now or proposed
to be conducted as set forth in the Final Memorandum. Each of the
Company, Holdings and their respective subsidiaries has, and after
giving effect to the Recapitalization, will have fulfilled and
performed all of its obligations with respect to such Permits in all
material respects. Each of the Company, Holdings and their respective
subsidiaries has, and after giving effect to the Recapitalization, will
not have received any notice or proceedings relating to the revocation
or modification of any such Permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.
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(k) There are no material legal or governmental proceedings
involving or affecting the Company, Holdings, any of their subsidiaries
or any of their respective properties or assets that are not described
in the Preliminary Memorandum or the Final Memorandum, nor are there
any material contracts or other documents that are not described in the
Preliminary Memorandum or the Final Memorandum. Except as set forth in
the Preliminary Memorandum and the Final Memorandum, there is not
pending or, to the knowledge of the Company or Holdings threatened any
action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, to which the Company, Holdings or
any of their subsidiaries (both before and after giving effect to the
Recapitalization) is a party, which affects the Company, Holdings or
any of their subsidiaries or, after giving effect to the
Recapitalization, will effect the Company, Holdings or any of their
subsidiaries which, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect.
(l) Each of the Company, Holdings and their subsidiaries has,
and after giving effect to the Recapitalization, will have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by it and necessary in
the conduct of its business in each case free and clear of all liens,
encumbrances and defects except (i) such as are referred to in the
Preliminary Memorandum and the Final Memorandum, (ii) sales of
inventory in the ordinary course of business or (iii) such as do not
materially adversely affect the value of such property to it, and do
not materially interfere with the use made and proposed to be made of
such property by it. All leases, contracts and agreements to which any
of the Company, Holdings and any of their subsidiaries is and, after
giving effect to the Recapitalization, will be a party or by which it
is bound are valid and enforceable against it and are valid and
enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually
or in the aggregate, have a Material Adverse Effect.
(m) Each of the Company, Holdings and their subsidiaries has,
and after giving effect to the Recapitalization, will own or possess
adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights, know-how and other intellectual
property (collectively, "Trademarks") necessary to conduct the business
now or proposed to be operated by it as described in the Preliminary
Memorandum and the Final Memorandum, except as would not, individually
or in the aggregate, have a Material Adverse Effect; and the
consummation of the transactions contemplated hereby and by the
Recapitalization will not alter or impair any such rights, except for
such alterations or impairments as would not have a Material Adverse
Effect. Neither the Company, nor Holdings nor any of their subsidiaries
has and, after giving effect to the Recapitalization, will have
received any notice of infringement of or conflict with (or know of any
such infringement of or conflict with) alleged rights of others with
respect to any Trademarks (or questioning the validity or effectiveness
of any license or other agreement or instrument relating thereto)
which, if such alleged infringement or conflict were sustained, would
have a Material Adverse Effect; and to the best knowledge of the
Company and Holdings, there is no valid basis for any such claim and
the use of such Trademarks by the Company, Holdings or any of their
subsidiaries does not infringe on the rights of any person.
(n) Each of the Company, Holdings and each of their
subsidiaries has, and after giving effect to the Recapitalization, will
have all the requisite corporate power and authority to executive,
deliver and perform its obligations under each of the Transaction
Documents (other than the Offering Documents and the New Credit
Facility) to which it is a party; the Recapitalization Agreement has
been duly and validly authorized, executed and delivered by Holdings;
each of such Transaction Documents, at and as of the Effective Time,
will have been duly and validly authorized, executed and delivered by
the Company, Holdings and each of their subsidiaries, as applicable,
and will constitute a valid and legally binding obligation of the
Company, Holdings and their subsidiaries, as applicable, enforceable
against the Company, Holdings and their subsidiaries, as applicable, in
accordance with its terms; and the Recapitalization has been duly
authorized by all necessary action, if any, of the stockholders of the
Company and Holdings.
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(o) Each of the Company and Holdings has and, after giving
effect to the Recapitalization, will have, all requisite corporate
power and authority to execute, deliver and perform its obligations
under the Offering Documents, as applicable, and to authorize, issue,
sell and deliver the Securities as provided herein and therein.
(p) There exists as of the date hereof and will exist on the
Closing Date, after giving effect to the Recapitalization, no event or
condition which would constitute a default or an event of default or
other violation or breach of any Transaction Document. Each of the
representations and warranties of the Company and Holdings contained in
each of the Transaction Documents (other than the Offering Documents)
are true and correct in all material respects. Each of the Transaction
Documents conforms to the description thereof in the Final Memorandum
in all material respects.
(q) Except as disclosed in the Preliminary Memorandum and the
Final Memorandum, and except as would not individually or in the
aggregate have a Material Adverse Effect, (w) each of the Company,
Holdings and their respective subsidiaries is in compliance with all
applicable Environmental Laws, (x) each of the Company, Holdings and
their respective subsidiaries has all Permits under any applicable
Environmental Laws and is in compliance with their requirements, (y)
there are no pending or, to the best knowledge of the Company and
Holdings, threatened Environmental Claims (as defined below) against
the Company, Holdings or any of their subsidiaries and (z) each of the
Company and Holdings does not have knowledge of any circumstances with
respect to any of its properties or operations that could reasonably be
anticipated to form the basis of an Environmental Claim against the
Company, Holdings, any of their subsidiaries or any of their respective
properties or operations and the business operations relating thereto.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means, with respect to any
person, any federal, state, local or municipal statute, law, rule,
regulation, ordinance, code, policy or rule of common law and any
published judicial or administrative interpretation thereof including
any judicial or administrative order, consent decree or judgment
binding on such person or any of its subsidiaries, relating to the
environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any such
governmental authority. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental
Law.
(r) In the ordinary course of its business, each of the
Company and Holdings conducts a periodic review of the effect of
Environmental Laws on its business, operations and properties, in the
course of which it identifies and evaluates associate costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any Permit, any related constraints on
operating activities and potential liabilities to third parties). On
the basis of such review, each of the Company, Holdings and their
respective subsidiaries has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect.
(s) Each of the Company, Holdings and their respective
subsidiaries has not and, after giving effect to the Recapitalization,
will not have violated any foreign, federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable foreign, federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case would singly
or in the aggregate, have a Material Adverse Effect.
(t) There is (i) no unfair labor practice complaint pending
against the Company, Holdings or any of their subsidiaries or, to the
best knowledge of the Company and Holdings, threatened against any of
them, before the National Labor Relations Board or any state or local
labor relations board, and no significant grievance or more significant
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company, Holdings or any
of their subsidiaries or, to the best knowledge of the Company and
Holdings, threatened against any of
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them, and (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Company, Holdings or any of their
subsidiaries or, to the best knowledge of the Company and Holdings,
threatened against any of them.
(u) Each of the Company, Holdings and their respective
subsidiaries carries and, after giving effect to the Recapitalization,
will carry reasonably adequate insurance (including self-insurance) in
such amounts and covering such risks as would be obtained by companies
in the same or similar businesses in the ordinary course for the
conduct of its business and the value of its properties.
(v) Ernst & Young LLP are independent public accountants with
respect to the Company and Holdings within the meaning of the
Securities Act and the rules and regulations thereunder.
(w) The combined financial statements, together with related
schedules and notes forming part of the Preliminary Memorandum and the
Final Memorandum (and any amendment or supplement thereto), present
fairly the consolidated financial position, results of operations and
changes in financial position of the Holdings and its subsidiaries on
the basis stated in the Preliminary Memorandum and the Final Memorandum
at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information
and data set forth in the Preliminary Memorandum and the Final
Memorandum (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis
consistent with such financial statements, except as otherwise stated
therein. The statistical and market-related data (including, without
limitation, estimates of market size and share) included in the
Preliminary Memorandum and the Final Memorandum are based on or derived
from sources which the Company and Holdings believe to be reliable and
accurate.
(x) The pro forma financial statements included in the
Preliminary Memorandum and the Final Memorandum have been prepared on a
basis consistent with the historical financial statements of Holdings
and its subsidiaries and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the
Preliminary Memorandum and the Final Memorandum; and such pro forma
financial statements comply as to form in all material respects with
the requirements applicable to pro forma financial statements included
in registration statements on Form S-1 under the Securities Act. The
other pro forma financial and statistical information and data included
in the Preliminary Memorandum and the Final Memorandum are, in all
material respects, accurately presented and prepared on a basis
consistent with the pro forma financial statements.
(y) Neither the Company, nor Holdings nor any of their
subsidiaries is, or will be, after giving effect to the
Recapitalization, 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").
(z) The Company, Holdings and their subsidiaries have complied
with all provisions of Section 517.075, Florida Statutes (Chapter
92-198, Laws of Florida) relating to doing business with the Government
of Cuba or with persons or affiliates located in Cuba.
(aa) Each of the Company, Holdings and their respective
subsidiaries 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 that conform 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.
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(bb) Each of the Company, Holdings and their respective
subsidiaries has and, after giving effect to the Recapitalization, will
have filed all necessary federal, state and foreign income and
franchise tax returns required to be filed, other than those filings
being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment
received by the Company, Holdings or any of their subsidiaries have
been, and after giving effect to the Recapitalization, will be paid,
other than those being contested in good faith and for which adequate
reserves have been provided.
(cc) Except as stated in the Final Memorandum, neither the
Company nor Holdings knows of any outstanding claims for services,
either in the nature of a finder's fee, financial advisory fee,
origination fee or similar fee, with respect to the transactions
contemplated hereby.
(dd) This Agreement has been duly authorized, executed and
delivered by the Company and Holdings and constitutes a valid and
binding agreement of the Company and Holdings, enforceable against the
Company and Holdings in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity and except
insofar as the enforceability and the indemnity and contribution
provisions contained in this Agreement may be limited by federal or
state securities laws and the public policy underlying such laws.
(ee) The Indenture has been duly authorized, and when executed
and delivered by the Company and Holdings, will be a valid and binding
agreement of the Company and Holdings, enforceable against the Company
and Holdings in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(ff) The Notes have been duly authorized by the Company, and,
when executed and authenticated in accordance with the provisions of
the Indenture, will conform in all material respects to the description
thereof in the Preliminary Memorandum and the Final Memorandum and when
delivered to and paid for by the Initial Purchasers in accordance with
this Agreement, will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture and will be enforceable
against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(gg) The Holdings Guarantee endorsed on the Notes has been
duly authorized by Holdings and, when the Notes are executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Initial Purchasers in accordance with this Agreement,
the Holdings Guarantee will be the valid and binding obligation of
Holdings, entitled to the benefits of the Indenture and will be
enforceable against Holdings in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(hh) The Exchange Securities have been duly authorized by the
Company and Holdings, and, when executed and authenticated in
accordance with the provisions of the Indenture, will be valid and
binding obligations of the Company and Holdings, entitled to the
benefits of the Indenture and will be enforceable against the Company
and Holdings in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(ii) The Registration Rights Agreement has been duly
authorized by the Company and Holdings, and, when duly executed and
delivered by the Company and Holdings, will be a valid and binding
agreement of the Company and Holdings, enforceable against the Company
and Holdings in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance,
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reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(jj) The New Credit Facility (and the guarantees thereof) has
been duly authorized by the Company and Holdings, and, when duly
executed and delivered by the Company and Holdings, will be a valid and
binding obligation of the Company and Holdings, enforceable against the
Company and Holdings in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(kk) Neither the Company, nor Holdings, nor any agent thereof
acting on the behalf of the Company or Holdings has taken, and none of
them will take, any action that might cause the New Credit Facility,
this Agreement or the issuance or sale of the Securities pursuant to
the terms of this Agreement to violate Regulation G (12 C.F.R. Part
207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of
the Federal Reserve System.
(ll) Immediately after the consummation of the
Recapitalization, the fair value and present fair saleable value of the
assets of the Company and Holdings will exceed the sum of its stated
liabilities and identified contingent liabilities; and neither the
Company nor Holdings is, or after giving effect to the execution,
delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby, will be, (i)
left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (ii) unable to pay its
debts (contingent or otherwise) as they mature or (iii) otherwise
insolvent.
(mm) Neither the Company, nor Holdings nor any of their
subsidiaries, nor, to either the Company's or Holding's knowledge, any
director, officer, agent, employee, stockholder or other person, in any
such case, acting on behalf of the Company, Holdings or any of their
respective subsidiaries, has used any corporate funds during the last
five years for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
payoff, influence payment, kickback or other payment that is unlawful.
(nn) Neither the Company, nor Holdings nor any affiliate of
the Company or Holdings has sold, offered for sale or solicited offers
to buy or otherwise negotiated in respect of any security (as defined
in the Securities Act) in a transaction would require the registration
under the Securities Act of the Securities.
(oo) Neither the Company, nor Holdings nor any of their
subsidiaries is a "public utility" or a "holding company" within the
meaning of the Public Utility Holdings Company Act of 1935, as amended.
2. Purchase and Sale. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, each of the Issuers agrees to sell to the Initial Purchasers and the
Initial Purchasers agree to purchase the aggregate principal amount of
Securities set forth opposite its name as shown in Schedule B hereto, at a
purchase price equal to 97% of the principal amount thereof.
The Issuers shall not be obligated to deliver any of the
Securities to be delivered except upon payment for all the Securities to be
purchased as provided herein.
3. Sale and Resale of the Securities by the Initial
Purchasers. Each of the Initial Purchasers represents and warrants to the
Company and Holdings that:
9
(a) It will offer the Securities to be purchased hereunder for resale only upon
the terms and conditions set forth in this Agreement and in the Final
Memorandum.
(b) It (i) will not solicit offers for, or offer or sell, the
Notes 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 (ii) will solicit offers for the Notes only from,
and will offer, sell or deliver the Notes, as part of its initial
offering, only to the following persons (each an "Eligible Purchaser")
(A) persons in the United States whom such Initial Purchaser reasonably
believes to be qualified institutional buyers ("QIBs") as defined in
Rule 144A under the Securities Act, as such rule may be amended from
time to time ("Rule 144A") 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 such
Initial Purchaser that each such account is a QIB, to whom notice has
been given that such sale or delivery is being made in reliance on Rule
144A, (B) to a limited number of institutional accredited investors as
defined in Rule 501(a) (1), (2), (3) or (7) under Regulation D
("Accredited Investors") that, prior to their purchase of the
Securities, execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A to the
Final Memorandum and (C) outside the United States to non-U.S. persons
in offshore transactions in reliance on Regulation S under the
Securities Act ("Regulation S"), in each case, in transactions under
Rule 144A or Regulation D in private sales exempt from registration
under the Securities Act.
(c) With respect to Securities sold in reliance on Regulation
S, (i) neither the Company nor any of its affiliates nor anyone acting
on its or their behalf has offered or sold, and will not offer or sell,
any Securities by means of any directed selling efforts (as defined in
Rule 902 of Regulation S) in the United States, (ii) at or prior to
confirmation of such sales of securities made in reliance on Regulation
S, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases the
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 a distribution thereof 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 an exemption from or in a transaction not
subject to the Securities Act. Terms used above have the
meanings given them by Regulation S."
(iii) the Securities offered and sold in reliance on Regulation S will
only be sold in offshore transactions and (iv) the sale of the
Securities to non-U.S. persons in offshore transactions is not part of
a plan or scheme to avoid the registration requirements of the
Securities Act.
(d) (i) It has not solicited, and will not solicit, offers to
purchase any of the Securities from, (ii) it has not sold, and will not
sell, any of the Securities to, and (iii) it has not distributed, and
will not distribute, the Preliminary Memorandum or the Final Memorandum
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 of such jurisdiction. For purposes of this
Agreement, "United States" means the United States of America, its
territories, its possessions (including the Commonwealth of Puerto
Rico), and other areas subject to its jurisdiction.
(e) Unless prohibited by applicable law, (i) it will furnish
to each person to whom it offers any Securities, a copy of the
Preliminary Memorandum (as amended or supplemented) or Final Memorandum
or (unless delivery of such Preliminary Memorandum is required by
applicable law) shall inform each such person that a copy of such
Preliminary Memorandum or the Final
10
Memorandum will be available upon request and (ii) it will furnish to
each person to whom it sells Securities a copy of the Final Memorandum
(as then amended or supplemented) and shall inform each such person
that a copy of such Final Memorandum will be available upon request.
4. Delivery of and Payment for the Notes. Delivery of and
payment for the Securities shall be made at the office of Xxxxxx & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:00 A.M., New York City time, on November
26, 1997, or at such other date or place as shall be determined by agreement
between the Initial Purchasers and the Issuers. This date and time are sometimes
referred to as the "Closing Date." On the Closing Date, the Issuers shall
deliver or cause to be delivered the Securities to the Initial Purchasers for
the account of the Initial Purchasers against payment to or upon the order of
the Issuers of the purchase price by wire transfer in federal (same-day) funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of the
Initial Purchasers hereunder. Upon delivery, the Securities shall be in
definitive fully registered form and registered in the name of Cede & Co., as
nominee of the Depositary Trust Company ("DTC"), or such other name or names and
in such denominations as the Initial Purchasers shall request in writing not
less than one business day prior to the Closing Date. For the purpose of
expediting the checking and packaging of the Securities, the Company shall make
the Securities available for inspection by the Initial Purchasers in New York,
New York, not later than 2:00 P.M., New York City time, on the business day
prior to the Closing Date.
5. Further Agreements of the Company and Holdings. The Company
and Holdings, jointly and severally, agree with each Initial Purchaser as set
forth below:
(a) The Company and Holdings will furnish to the Initial Purchasers, without
charge, as many copies of the Final Memorandum and any supplements and
amendments thereto as they may reasonably request.
(b) Prior to making any amendment or supplement to the
Preliminary Memorandum or the Final Memorandum, the Company and
Holdings shall furnish a copy thereof to the Initial Purchasers and
counsel to the Initial Purchasers and will not effect any such
amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to
review.
(c) If, at any time prior to completion of the distribution of
the Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Issuers, to amend
or supplement the Final Memorandum in order that the Final Memorandum
will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein
not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement
the Final Memorandum to comply with applicable law, the Company and
Holdings will promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Final Memorandum, as so amended or supplemented, will comply with
applicable law and furnish to the Initial Purchasers such number of
copies of such amendment or supplement as they may reasonably request.
(d) So long as any Securities are outstanding and are
"Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act and during any period in which either the Company or
Holdings is not subject to Section 13 or 15(d) of the Exchange Act of
1934, as amended (the "Exchange Act"), the Company and Holdings will
furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or
such prospective purchasers, the information, if any, required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) So long as the Securities and Exchange Securities are
outstanding, the Company and Holdings will furnish to the Initial
Purchasers copies of any annual reports, quarterly reports and current
reports filed with the Securities and Exchange Commission ("SEC") on
Forms 10-K, 10-Q
11
and 8-K, or such other similar forms as may be designated by the SEC,
and such other documents, reports and information as shall be furnished
by the Company and Holdings to the Trustee or to the holders of the
Securities and Exchange Securities pursuant to the Indenture.
(f) The Company and Holdings will use their best efforts to
qualify the Securities for sale under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers reasonably designate
and to continue such qualifications in effect so long as reasonably
required for the distribution of the Securities. The Company and
Holdings will also arrange for the determination of the eligibility for
investment of the Securities under the laws of such jurisdictions as
the Initial Purchasers reasonably request. Notwithstanding the
foregoing, neither the Company nor Holdings shall be obligated to
qualify as a foreign corporation in any jurisdiction in which they are
not so qualified or to file a general consent to service of process or
to subject themselves to taxation in respect of doing business in any
jurisdiction in which it is not otherwise subject.
(g) The Company and Holdings will use their best efforts to
permit the Securities to be designated PORTAL securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL market and
to permit the Securities to be eligible for clearance and settlement
through DTC.
(h) Except following the effectiveness of any Registration
Statement (as defined in the Registration Rights Agreement) and except
for such offers as may be made as a result of, or subsequent to, filing
such Registration Statement or amendments thereto prior to the
effectiveness thereof, the Company and Holdings will not, and will
cause their affiliates not to, solicit any offer to buy or offer to
sell the Securities by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(i) The Company and Holdings will consummate the transactions
contemplated by the Transaction Documents (to the extent each is a
party thereto) in accordance with the terms thereof, and apply the net
proceeds from the sale of the Securities, in each case, as set forth in
the Final Memorandum.
(j) The Company and Holdings will take such steps as shall be
necessary to ensure that neither the Company, nor Holdings nor any of
their respective subsidiaries shall become (i) an "investment company"
within the meaning of the Investment Company Act, or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holdings Company Act
of 1935, as amended.
(k) The Company, Holdings and their respective subsidiaries
will not, and will cause their respective affiliates not to, take any
action that would require the registration under the Securities Act of
the Securities (other than pursuant to the Registration Rights
Agreement) including, without limitation, (i) engaging in any directed
selling efforts (within the meaning of Regulation S) during any
applicable restricted period or (ii) offering any other securities in a
manner that would be integrated with the transactions contemplated
hereby.
(l) Prior to the consummation of the Exchange Offer (as
defined in the Registration Rights Agreement) or the effectiveness of
an applicable shelf registration statement if, in the reasonable
judgment of the Initial Purchasers, the Initial Purchasers or any of
their affiliates are required to deliver an offering memorandum in
connection with sales of, or market-making activities with respect to,
the Securities, (A) the Company and Holdings will periodically amend or
supplement the Final Memorandum so that the information contained in
the Final Memorandum complies with the requirements of Rule 144A of the
Securities Act, (B) the Company and Holdings will amend or supplement
the Final Memorandum when necessary to reflect any material changes in
the information provided therein so that the Final Memorandum will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the
12
circumstances existing as of the date the Final Memorandum is so
delivered, not misleading and (C) the Company and Holdings will provide
the Initial Purchasers with copies of each such amended or supplemented
Final Memorandum, as the Initial Purchasers may reasonably request.
The Company and Holdings hereby expressly acknowledges that
the indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 5(l).
(m) The Company will do all things reasonably necessary to
satisfy the closing conditions set forth in Section 7 hereof.
6. Expenses. The Company and Holdings, jointly and severally,
agree to pay (a) the costs incident to the authorization, issuance, sale and
delivery of the Securities and Exchange Securities and any issue or stamp taxes
payable in that connection; (b) the costs incident to the preparation and
printing of the Preliminary Memorandum, the Final Memorandum and any amendments,
supplements and exhibits thereto; (c) the costs of distributing the Preliminary
Memorandum, the Final Memorandum and any amendment or supplement thereto; (d)
the fees and expenses of qualifying the Securities and Exchange Securities under
the securities laws of the several jurisdictions as provided in Section 5(f) and
of preparing, printing and distributing a Blue Sky Memorandum (including
reasonable related fees and expenses of counsel to the Initial Purchasers); (e)
the cost of printing the Securities and the Exchange Securities; (f) the fees
and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of any counsel for the Trustee in connection with the Indenture
and the Securities and Exchange Securities; (g) any fees paid to rating agencies
in connection with the rating of the Securities and Exchange Securities; (h) the
costs and expenses of DTC and its nominee, including its book-entry system; (i)
all expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL market; and (j) all other costs and
expenses incident to the performance of the obligations of the Company and
Holdings under this Agreement.
7. Conditions of Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date will be subject to satisfaction of each of the following
conditions:
(a) Each of the representations and warranties on the part of the Company and
Holdings contained herein shall be true and correct in all material respects on
the date herein and on the Closing Date with the same force and effect as if
made on and as of the Closing Date.
(b) The Final Memorandum shall have been printed and copies
distributed to the Initial Purchasers as soon as practicable but in no
event later than on the Business Day following the date of this
Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification or
exemption from qualification of the Securities in any jurisdiction
referred to in Section 5(f) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) The Initial Purchasers shall not have advised the Company
that the Final Memorandum, or any amendment or supplement thereto,
contains an untrue statement of fact or omits to state a fact which,
the Initial Purchasers have concluded, is material and in the case of
an omission is required to be stated therein or is necessary to make
the statements therein not misleading.
(d) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, singly or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the knowledge of the Company or
Holdings, threatened against the Company, Holdings or any of their
subsidiaries
13
before any court or arbitrator or any governmental body, agency or
official that, singly or in the aggregate, if adversely determined,
would reasonably be expected to result in a Material Adverse Effect;
and no stop order shall have been issued by the SEC or any governmental
agency of any jurisdiction referred to in Section 5(f) preventing the
use of the Final Memorandum, or any amendment or supplement thereto, or
which would reasonably be expected to have a Material Adverse Effect.
(e) Since the date of the latest balance sheet included in the
Final Memorandum, there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary
course of business, of the Company, Holdings or any of their respective
subsidiaries, (ii) since the date of the latest balance sheet included
in the Final Memorandum there shall not have been any change, or any
development involving a prospective material adverse change, in the
capital stock or in the long-term debt of the Company, Holdings or any
of their respective subsidiaries except as described in the Final
Memorandum, (iii) none of the Company, Holdings or any of their
respective shall have any liability or obligation, direct or
contingent, which is material to it, other than those reflected in the
Final Memorandum and (iv) on the Closing Date you shall have received a
certificate of each of the Company and Holdings, dated the Closing
Date, signed on its behalf by (x) the president or any vice president
and (y) a principal financial or accounting officer of the Company or
Holdings, as applicable, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 7
(as to the Company and Holdings) and confirming that the
representations and warranties contained in Section 1 are true and
correct with the same force and effect as though made on and as of the
Closing Date.
(f) As of the Closing Date, the Company and Holdings will have
delivered to the Initial Purchasers true and correct executed copies of
the Transaction Documents in the form as originally executed, together
with all related documents, instruments and agreements and all
schedules or exhibits thereto; there will 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 previously have been advised and shall not have reasonably
objected after being furnished a copy thereof.
(g) None of the issuance and sale of the Securities pursuant
to this Agreement, the Recapitalization or any of the other
transactions contemplated by any of the Transaction Documents or the
Final Memorandum shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued or
any action, suit or proceeding shall have been commenced with respect
to this Agreement, the Recapitalization Agreement, the New Credit
Facility or any of the other transactions contemplated by the
Transaction Documents or the Final Memorandum, before any court or
governmental authority.
(h) On the Closing Date, the Initial Purchasers shall have
received copies of all opinions delivered by any counsel, consultants
or advisors to Childs or any of its affiliates, and such other
certificates, documents and opinions reasonably obtainable by Childs or
any of its affiliates delivered to any party under the Transaction
Documents, in each case in which the Initial Purchasers reasonably
request, together with letters addressed to the Initial Purchasers,
stating that the Initial Purchasers may rely on such certificates,
documents and opinions as if they had been addressed to the Initial
Purchasers.
(i) The Initial Purchasers shall have received a favorable
opinion of Xxxxxxxx & Worcester LLP, counsel for the Company and
Holdings, dated the Closing Date to the effect that:
(i) Each of the Company and Holdings is duly
incorporated and is validly existing as a corporation in good
standing under the laws of Delaware with corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Preliminary Memorandum and
the Final Memorandum; and is duly qualified as a
14
foreign corporation to transact business and is in good
standing in each jurisdiction as to which the management of
the Company has advised such counsel that the Company or
Holdings, as applicable, owns or leases property or in which
the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect.
(ii) Assuming, (i) the accuracy of and compliance
with the representations, warranties and covenants of the
Company and Holdings set forth in Section 1 of this Agreement,
and (ii) the accuracy of and compliance with the Initial
Purchasers' representations, warranties and covenants set
forth in this Agreement, the offer, issuance, sale and
delivery of the Securities to the Initial Purchasers, and the
initial reoffer, resale and delivery of the Securities by the
Initial Purchasers, as contemplated by this Agreement and the
Final Memorandum, do not require registration under the
Securities Act, or qualification of the Indenture under the
Trust Indenture Act, it being understood that no opinion is
expressed as to any subsequent resale of Securities or any
resale of Securities by any person other than the Initial
Purchasers.
(iii) Each of the Company and Holdings has the
authorized, issued and outstanding capital stock as set forth
in the Final Memorandum; all of the outstanding shares of
capital stock of the Company and Holdings has been duly
authorized and validly issued, are fully paid and
nonassessable and were not, to the best of such counsel's
knowledge, issued in violation of any preemptive or similar
rights.
(iv) To the knowledge of such counsel, there are,
and, after giving effect to the Recapitalization, will be 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 Company,
Holdings or any of their respective subsidiaries, except as
described in the Final Memorandum.
(v) Each of the Company and Holdings has all the
requisite corporate power and authority to execute, deliver
and perform its respective obligations under each of the
Transaction Documents to which it is a party.
(vi) Each of the Company and Holdings has duly
authorized, executed and delivered each of the Transaction
Documents to which it is party.
(vii) Each of the Company and Holdings has duly and
validly authorized this Agreement and the consummation by the
Company and Holdings of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the
Company and Holdings.
(viii) Each of the Company and Holdings has duly and
validly authorized, executed and delivered the Indenture, and
the Indenture constitutes a valid and binding agreement of the
Company and Holdings, enforceable against each of them in
accordance with its terms except that the obligations, rights
and remedies of parties may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, marshaling or other
similar laws affecting generally creditors' rights and
remedies, and (ii) general principles of equity (regardless of
whether considered in a proceeding at law or in equity),
including, without limitation, the discretion of any court of
competent jurisdiction in granting specific performance or
other equitable relief.
(ix) The Company has duly authorized the Notes,
which, when executed and authenticated in accordance with the
provisions of the Indenture, and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this
Agreement, will be valid and binding obligations of the
Company enforceable against the Company in accordance with
their
15
terms except that the obligations, rights and remedies of
parties may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, marshaling or other similar laws
affecting generally creditors' rights and remedies, and (ii)
general principles of equity (regardless of whether considered
in a proceeding at law or in equity), including, without
limitation, the discretion of any court of competent
jurisdiction in granting specific performance or other
equitable relief, and will be entitled to the benefits of the
Indenture.
(x) Holdings has duly authorized the Holdings
Guarantee, which, when the Notes are executed and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement,
will be the valid and binding obligation of Holdings
enforceable against Holdings (both before and after giving
effect to the Recapitalization) in accordance with its terms
except that the obligations, rights and remedies of parties
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, marshaling or other similar laws affecting
generally creditors' rights and remedies, and (ii) general
principles of equity (regardless of whether considered in a
proceeding at law or in equity), including, without
limitation, the discretion of any court of competent
jurisdiction in granting specific performance or other
equitable relief, and will be entitled to the benefits of the
Indenture.
(xi) Each of the Company and Holdings has duly
authorized the Exchange Securities, which, when executed and
delivered by the Company and Holdings and duly authenticated
by the Trustee in accordance with the provisions of the
Indenture, will be valid and binding obligations of the
Company and Holdings, respectively, enforceable against the
Company and Holdings in accordance with their terms except
that the obligations, rights and remedies of parties may be
limited by (i) bankruptcy, insolvency, reorganization,
moratorium, marshaling or other similar laws affecting
generally creditors' rights and remedies, and (ii) general
principles of equity (regardless of whether considered in a
proceeding at law or in equity), including, without
limitation, the discretion of any court of competent
jurisdiction in granting specific performance or other
equitable relief, and will be entitled to the benefits of the
Indenture.
(xiiEach of the Company and Holdings has duly
authorized the Registration Rights Agreement, which, when
executed and delivered by the Company and Holdings, will be
valid and binding obligations of the Company and Holdings,
respectively, enforceable against the Company and Holdings in
accordance with their terms except that the obligations,
rights and remedies of parties may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, marshaling
or other similar laws affecting generally creditors' rights
and remedies, (ii) general principles of equity (regardless of
whether considered in a proceeding at law or in equity),
including, without limitation, the discretion of any court of
competent jurisdiction in granting specific performance or
other equitable relief, and (iii) the validity and
enforceability of any indemnification or contribution
provisions thereof may be limited under applicable securities
laws or public policies.
(xiii) The Indenture, the Securities, the
Registration Rights Agreement, the Recapitalization Agreement
and the New Credit Facility conform in all material respects
to the descriptions thereof contained in the Final Memorandum.
(xiv) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental
authority or agency, or third party is required (which has not
been obtained) in connection with the consummation by the
Company and Holdings of the transactions contemplated by the
Transaction Documents, except such as may be required under
state securities or Blue Sky laws. To the best of its
knowledge and information, the execution, delivery and
performance by each of the Company and Holdings of the
Transaction Documents and the consummation of the transactions
contemplated thereby will not conflict with or constitute a
breach of, or default under (or an event which with notice or
16
passage of time or both would constitute or a default under)
or violation of any of (A) any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it may be bound or to which
any of its property or assets is, and at and as of the
Effective Time will be subject, (B) the provisions of the
charter or by-laws of the Company or Holdings, or (C)
(assuming compliance with all applicable state securities or
Blue Sky laws) any law, administrative regulation or
administrative or court decree applicable to the Company,
Holdings or any of their properties or assets, except for any
such breach or violation which would not, individually or in
the aggregate, have a Material Adverse Effect.
(xv) To the knowledge of such counsel, neither the
Company nor Holdings is, nor after giving effect to the
Recapitalization, will be in violation of its charter
documents.
(xvi) To such counsel's knowledge, no legal or
governmental proceeding pending or threatened to which either
of the Company or Holdings is a party or to which any of their
respective properties are or will be subject that would be
required to be described in a registration statement on Form
S-1 or a prospectus contained therein delivered at the time of
the confirmation of the sale of an offering of securities
registered under the Securities Act that are not described in
the Final Memorandum.
(xvii) To such counsel's knowledge, no legal or
governmental proceedings are pending or threatened to which
either the Company or Holdings is a party or to which any of
their properties is subject which, if determined adversely to
such party would result, individually or in the aggregate, in
a Material Adverse Effect, or which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the
issuance and sale of the Securities or the consummation of the
other transactions contemplated by the Transaction Documents.
(xviii) Neither the Company nor Holdings is (i) an
"investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding company
within the meaning of the Public Utility Holdings Company Act
of 1935, as amended.
(xix) Neither the consummation of the transactions
contemplated by the New Credit Facility and this Agreement nor
the issuance or sale of the Securities will violate Regulation
G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve
System.
(xx) When the Securities are issued and delivered
pursuant to this Agreement, such Securities will not be of the
same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as securities of the Company or Holdings that
are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted on an automated
inter-dealer quotation system.
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of
the Company and Holdings, representatives of the independent public
accountants for the Company and Holdings, the Initial Purchasers and
their counsel at which the contents of the Final Memorandum and related
matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for and has not verified the
accuracy, completeness or fairness of the statements contained in the
Final Memorandum, and has not made any independent check or
verification thereof, on the basis of the foregoing (relying as to
materiality to the extent they deemed appropriate upon facts provided
by officers and other representatives of the Company and Holdings), no
facts have come to the attention of such counsel that lead such counsel
17
to believe that the Final Memorandum, as of its date or the Closing
Date, contained an untrue statement of a material fact or omitted to
state any material fact necessary to make the statements therein, in
light of the circumstances under which there were made, not misleading
(it being understood that such counsel need express no belief or
opinion with respect to the financial statements and notes thereto and
other financial and statistical data included therein).
In addition, such counsel may rely on an opinion by Xxxx
Xxxxxxx & Xxxxxx LLP, but only to the extent that such opinion states
that the Initial Purchasers are entitled to rely on such opinion.
(j) You shall have received on the Closing Date an opinion of
Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, dated the Closing
Date and addressed to you, in form and substance reasonably
satisfactory to you.
(k) The Company, Holdings and the Trustee shall have entered
into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(l) The Company, Holdings and the Initial Purchasers shall
have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(m) The Company, Holdings and the lenders thereunder shall
have entered into the New Credit Facility (the form and substance of
which shall be reasonably acceptable to the Initial Purchasers) and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof and of all other documents and agreements entered
into in connection therewith. There shall exist at and as of the
Closing Date no conditions that would constitute a default (or an event
that with notice or the lapse of time, or both, would constitute a
default) under the New Credit Facility. On the Closing Date, the New
Credit Facility shall be in full force and effect and shall not have
been modified.
(n) At the Execution Time and at the Closing Date, Ernst &
Young LLP shall have furnished to the Initial Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, confirming that they are independent accountants
within the meaning of the Securities Act and the Exchange Act and the
applicable rules and regulations thereunder and Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants (the "AICPA") and otherwise reasonably satisfactory in form
and substance to the Initial Purchasers and their counsel.
(o) The Recapitalization shall have been consummated on the
terms and conditions set forth in the Transaction Documents (without
waiver).
(p) On the Closing Date:
(i) the New Credit Facility with aggregate advances
and commitments thereunder of not less than $195.0 million
shall be in full force and effect, no event shall have
occurred and no event shall have failed to occur, which would
relieve the lenders under the New Credit Facility (the
"Lenders") of their obligation to advance funds, or preclude
them from advancing funds to the Company thereunder, and
concurrently with the Closing the Lenders shall have advanced
funds under the New Credit Facility in such amounts as are
necessary to fund the Recapitalization (after giving effect to
the Equity Financing and the sale of the Securities
hereunder);
(ii) the Equity Financing shall have been consummated
on terms and conditions satisfactory to the Initial Purchasers
and the preferred stock of Holdings shall have been issued
having terms and conditions acceptable to the Initial
Purchasers; and
18
(iii) the Company will have delivered to the Initial
Purchasers true and correct executed copies of the Transaction
Documents (other than the Offering Documents), in the form as
originally executed, together with all related documents,
instruments and agreements and all schedules or exhibits
thereto; there will 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 previously have been advised and shall not
have reasonably objected after being furnished a copy thereof.
(q) Simultaneously with the Closing, the closing contemplated
by the Recapitalization Agreement, including, without limitation, the
acquisition by Childs and certain other investors of 89.6% of the
equity interests of Holdings, shall have been consummated in accordance
with the terms of the Recapitalization Agreement.
(r) Counsel for the Underwriter shall have been furnished with
such other documents and opinions as they may reasonably require.
(s) 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 or The NASDAQ Stock
Market's National Market or in the over-the-counter market shall have
been suspended or materially limited, or minimum prices shall have been
established on such exchange by the SEC, or by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such 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) as to make
it, in the reasonable judgment of the Initial Purchasers, impracticable
or inadvisable to proceed with the offering or delivery of the
Securities being delivered on the Closing Date on the terms and in the
manner contemplated herein and in the Final Memorandum.
(t) As of the Closing Date, no "nationally recognized
statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act (i) will have imposed (or
will have informed the Company or Holdings that it is considering
imposing) any condition (financial or otherwise) on the Company's or
Holdings' retaining any rating assigned to the Company or Holdings, any
securities of the Company or Holdings or (ii) will have indicated to
the Company or Holdings that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that
does not indicate the direction of the possible change in, any rating
so assigned or (b) any change in the outlook for any rating of the
Company, Holdings or any securities of the Company or Holdings.
8. Indemnification and Contribution. (a) The Company and
Holdings, jointly and severally, agree to indemnify and hold harmless the
Initial Purchasers and each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
or judgments (including without limiting the foregoing the reasonable legal and
other expenses incurred in connection with any action, suit or proceeding or any
claim asserted) arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Memorandum or the Final
Memorandum, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Initial Purchasers furnished in writing to the Company or Holdings by the
Initial Purchasers expressly for use therein. This indemnity agreement will be
in addition to any liability which the Company or Holdings may otherwise have to
the persons referred to above in this Section 8(a).
19
(b) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, Holdings, their directors, their
officers and each person, if any, who controls the Company or Holdings within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages liabilities
and judgments (including without limiting the foregoing the reasonable legal and
other expenses incurred in connection with any action, suit or proceeding or any
claim asserted) arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Memorandum or the Final
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to the Initial Purchasers furnished to the Company or
Holdings in writing by the Initial Purchasers through you expressly for use in
the Preliminary Memorandum, the Final Memorandum or any amendment or supplement
thereto.
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (hereinafter called the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
action, each indemnified party may retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying party shall have
failed to assume the defense and employ counsel or (iii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests among them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the reasonable fees and expenses of more than one separate
firm (in addition to local counsel) for the Initial Purchasers and all persons,
if any, who control an Initial Purchaser within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act and (b) the reasonable
fees and expenses of more than one separate firm (in addition to local counsel)
for the Company, Holdings, their directors, their officers and each person, if
any, who controls the Company or Holdings within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Initial Purchasers and such control persons of an
Initial Purchaser, such firm shall be designated in writing by the Initial
Purchasers. In the case of any such separate firm for the Company and Holdings,
and such directors, officers and control persons of the Company and Holdings,
such firm shall be designated in writing by the Company. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent; but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the immediately preceding sentence, if
in any case where the fees and expenses of counsel are at the expense of the
indemnifying party and an indemnified party shall have requested the
indemnifying party to reimburse the indemnified party for expenses of counsel as
incurred, such indemnifying party agrees that it shall be liable for any
settlement of any action effected without its written consent if (i) such
settlement is entered into more than twenty business days after the receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the indemnified party in accordance with
such request for reimbursement prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, 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.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each
20
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
Holdings on the one hand and the Initial Purchasers on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and Holdings 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, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and Holdings on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportions as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchasers, in each
case as set forth in the table on the cover page of the Final Memorandum. The
relative fault of the Company and Holdings on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company, Holdings or by the Initial Purchasers and the party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, Holdings and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to Section 8(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action pursuant to Section 8(d), and in no event shall the
Initial Purchasers be required to contribute any amount in excess of the amount
by which the total price at which the Securities purchased by them exceeds the
amount of any damages which the Initial Purchasers have 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.
9. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers by notice given to and
received by the Company prior to delivery of and payment for the Securities if,
prior to that time, any of the events described in Sections 7(s) or 7(t) shall
have occurred or if the Initial Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If (a) the
Company shall fail to tender the Securities for delivery to the Initial
Purchasers otherwise than for any reason permitted under this Agreement or (b)
the Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement, the Company and Holdings shall reimburse the
Initial Purchasers for the reasonable fees and expenses of their counsel and for
such other reasonable out-of-pocket expenses as shall have been incurred by them
in connection with this Agreement and the proposed purchase of the Securities,
and upon demand the Company and/or Holdings shall pay the full amount thereof to
the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered
or sent by mail, telex or facsimile transmission to NationsBanc
Xxxxxxxxxx Securities, Inc., 000 0xx Xxxxxx, NY1-003-12- X0, Xxxxx 00X,
Xxx Xxxx, Xxx Xxxx (Facsimile: 212-838-1811), Attention: Xxxx Xxxxxx,
with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (Facsimile: 212-751-4864), Attention: Xxxx X. Xxxxxxxxx;
21
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set
forth in the Final Memorandum, Attention: Xx Xxxxxxx (Facsimile:
502-781-5705), with a copy to Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (Facsimile: 617-338-2880),
Attention: Xxxxxxx X. Xxxxxx, Esq.
Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Company shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Initial Purchasers.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, Holdings, and their respective successors. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons, except
that (A) the representations, warranties, indemnities and agreements of the
Company and Holdings contained in this Agreement shall also be deemed to be for
the benefit of directors, officers, employees and agents (including, without
limitation, attorneys) of the Initial Purchasers and the person or persons, if
any, who control an Initial Purchasers within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Initial Purchasers
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors of the Company, Holdings, officers, employees and agents
(including, without limitation, attorneys) of the Company, Holdings and any
person controlling any of the Company or Holdings within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
12, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, Holdings and the Initial Purchasers
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
14. Definition of "Business Day." For purposes of this
Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York,
New York are authorized or obligated by law, executive order or regulation to
close.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
16. Counterparts. This Agreement may be executed in one or
more counterparts 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.
17. 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.
[Signature page follows]
22
If the foregoing correctly sets forth the agreement between
the Company and the Initial Purchaser, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
DESA INTERNATIONAL, INC.
By: _____________________________________
Name: _______________________________
Title: ________________________________
DESA HOLDINGS CORPORATION
By: _____________________________________
Name: _______________________________
Title: ________________________________
The foregoing Agreement is hereby
confirmed, accepted and agreed as
of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
UBS SECURITIES LLC
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
EXHIBIT A
Registration Rights Agreement
SCHEDULE A
Subsidiaries and Investments
Name Subsidiary or Jurisdiction of Situation of Capital Stock Ownership
Investment of: Organization
DESA Industries of Subsidiary of DESA Ontario, Canada 100% owned
Canada International, Inc.
DESA Europe B.V. Subsidiary of DESA The Netherlands 100% owned
International, Inc.
DESA Industries of Subsidiary of DESA U.S. Virgin Islands 100% owned
V.I., LTD. International, Inc.
PATCO L.P. Joint Venture of DESA Illinois 49.50% owned by DESA International,
International, Inc. Inc. as limited partner. The general
partner of PATCO, XXX Tool, Inc. (a
Delaware corporation) owns 1% of
PATCO and is, in turn, 50% owned by
DESA International, Inc.
SCHEDULE B
DESA INTERNATIONAL, INC.
Initial Purchaser Amount
----------------- ---------
NationsBanc Xxxxxxxxxx Securities, Inc...............................$97,500,000
UBS Securities LLC...................................................$32,500,000
$130,000,000.00
===============
