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SAFETY COMPONENTS INTERNATIONAL, INC.
$90,000,000
10 1/8% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
July 21, 1997
BT Securities Corporation
Alex. Xxxxx & Sons Incorporated
BancAmerica Securities, Inc.
c/o BT Securities Corporation
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Safety Components International, Inc. (the "Company"), a
Delaware corporation, and the Guarantors (as defined) hereby confirm their
agreement with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$90,000,000 aggregate principal amount of the Company's 10 1/8% Senior
Subordinated Notes due 2007 (the "Notes"). The Notes will be guaranteed
(collectively, the "Guarantees") on a senior subordinated basis by each of the
Company's Subsidiaries listed on the signature pages hereof (collectively, and
together with any subsidiary that in the future executes a supplemental
indenture pursuant to which such subsidiary agrees to guarantee the Notes, the
"Guarantors"). The Notes and the Guarantees are collectively referred to herein
as the "Securities". The Securities are to be issued under an indenture (the
"Indenture") dated as of July 24 1997 by and among the Company, the Guarantors
and IBJ Xxxxxxxx Bank & Trust Company, as trustee (the "Trustee").
The Securities are being offering in connection with the
Company's acquisition of the assets of the Air Restraints and Industrial Fabrics
Division of JPS Automotive L.P.
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("JPS") pursuant to an asset purchase agreement, dated as of June 30, 1997 (the
"JPS Acquisition").
The Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated July 1, 1997 (the "Preliminary
Memorandum") and a final offering memorandum dated July 21, 1997 (the "Final
Memorandum," the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Company and any material developments relating to the Company
occurring after the date of the most recent historical financial statements
included therein.
The Company understands that the Initial Purchasers propose to
make an offering of the Notes only on the terms and in the manner set forth in
the Final Memorandum and Section 8 hereof as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, to persons in
the United States whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers" or "QIBs") as defined in
Rule 144A under the Act, as such rule may be amended from time to time ("Rule
144A"), in transactions under Rule 144A, to a limited number of other
institutional "accredited investors" ("Accredited Investors") as defined in Rule
501(a)(1), (2), (3) and (7) under Regulation D of the Act in private sales
exempt from registration under the Act, and outside the United States to certain
persons in reliance on Regulation S under the Act.
The Initial Purchasers and their direct and indirect
transferees of the Securities 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 the Guarantors have agreed, among other things, to file a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Exchange Notes (as defined in the
Registration Rights Agreement) under the Act.
2. Representations and Warranties of the Company. The Company
and each of the Guarantors, subject to the limit on maximum liability contained
in the Guarantees, jointly and severally, represents and warrants to and agrees
with each of the Initial Purchasers that:
(a) Neither the Final Memorandum nor any amendment or
supplement thereto as of the date thereof and at all times subsequent
thereto up to the Closing Date
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(as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 2(a) do
not apply to statements or omissions made in reliance upon and in
conformity with information relating to any of the Initial Purchasers
furnished to the Company in writing by the Initial Purchasers expressly
for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the
authorized, issued and outstanding capitalization set forth in the
Final Memorandum; all of the outstanding shares of capital stock of the
Company and each of its significant subsidiaries within the meaning of
Regulation S-X (each, a "Subsidiary" and collectively, the
"Subsidiaries") have been, and as of the Closing Date will be, duly
authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights; all
of the outstanding shares of capital stock of the Subsidiaries will be
free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those created pursuant to
the Credit Agreement (as defined) and those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions) or voting;
except as set forth in the Final Memorandum, there are no (i) options,
warrants or other rights to purchase (other than options granted in
1995 by Valentec International Corporation to Citibank, N.A. to
purchase 10,000 shares of common stock), (ii) agreements or other
obligations to issue or (iii) other rights to convert any obligation
into, or exchange any securities for, shares of capital stock of or
ownership interests in the Company or any of the Subsidiaries
outstanding. Except for the Company's direct and indirect interests in
the Subsidiaries and in other wholly owned subsidiaries, the Company
does not own, directly or indirectly, any shares of capital stock or
any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity other
than as described in the Final Memorandum.
(c) Each of the Company and the Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate or other
power and authority to own its properties and conduct its business as
now conducted and as described in the Final Memorandum; each of the
Company and the Subsidiaries is duly qualified to do business and is in
good standing in all other jurisdictions where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
general affairs, management,
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business, condition (financial or otherwise), prospects or results of
operations of the Company and the Subsidiaries, taken as a whole (any
such event, a "Material Adverse Effect").
(d) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform each of
its obligations under the Notes, the Exchange Notes, the Private
Exchange Notes (each as defined in the Registration Rights Agreement)
and the Guarantees. The Notes, when issued, will be in the form
contemplated by the Indenture. The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by
the Company and, when executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and, in the
case of the Notes, when delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will have
been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company (assuming the due
authorization, execution and delivery of the Indenture by the Trustee
and the due authorization and delivery of the Notes by the Trustee in
accordance with the Indenture), entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(e) The Guarantees have been duly and validly authorized by
each Guarantor, and when executed and delivered by such Guarantor, will
constitute the valid and legally binding obligations of such Guarantor,
entitled to the benefits of the Indenture, enforceable against each of
them in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
(f) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Indenture. The Indenture meets the requirements
for qualification under the Trust Indenture Act of 1939, as amended
(the "TIA"). The Indenture has been duly and validly authorized by each
of the Company and the Guarantors and, when executed and delivered in
accordance with its terms (assuming the due authorization, execution
and delivery by the Trustee), will have been duly executed and
delivered and will constitute a
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valid and legally binding agreement of each of the Company and the
Guarantors, enforceable against each of them in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(g) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. The Registration
Rights Agreement has been duly and validly authorized by each of the
Company and the Guarantors and, when executed and delivered by the
Company and each of the Guarantors (assuming due authorization,
execution and delivery by the other parties thereto), will have been
duly executed and delivered and will constitute a valid and legally
binding agreement of each of the Company and the Guarantors,
enforceable against each of them in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding
in equity or at law) and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and
public policy considerations.
(h) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by the Company
and the Guarantors of the transactions contemplated hereby have been
duly and validly authorized by each of the Company and the Guarantors.
This Agreement has been duly executed and delivered by each of the
Company and the Guarantors.
(i) No consent, approval, authorization or order of any court
or governmental agency or body, or third party is required for the
performance of this Agreement by the Company and the Guarantors or the
consummation by them of the other transactions contemplated hereby,
except such (i) as have been obtained or made, (ii) as would not have a
Material Adverse Effect, (iii) as would not materially adversely affect
the validity of this Agreement, the Notes, the Indenture or the
Registration Rights Agreement and (iv) such as may be required under
state securities or "Blue Sky" laws in connection with the purchase and
resale of the Securities by the Initial Purchasers and except with
respect to the registration of the Exchange Notes and Pri-
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vate Exchange Notes, if applicable, pursuant to the Registration Rights
Agreement and the qualification of the Indenture under the TIA. Neither
the Company nor any of the Subsidiaries is (i) in violation of its
certificate of incorporation or bylaws, (ii) in breach or violation of
any statute, judgment, decree, order, rule or regulation applicable to
any of them or any of their respective properties or assets, except for
any such breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect, or (iii) in breach of or
default under (nor has any event occurred which, with notice or passage
of time or both, would constitute a default under) or in violation of
any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to which
any of them is a party or to which their respective properties or
assets are subject (collectively, "Contracts"), except for any such
breach, default, violation or event which would not, individually or in
the aggregate, have a Material Adverse Effect.
(j) The execution, delivery and performance by the Company and
the Guarantors of this Agreement, the Indenture, the Notes, the
Guarantees, the Exchange Notes, the Private Exchange Notes and the
Registration Rights Agreement, the consummation of the transactions
contemplated hereby and thereby, the fulfillment of the terms hereof
and thereof, the consummation of the JPS Acquisition and the amendment
to the Credit Agreement (as defined) will not conflict with or
constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute a default
under) or violation of or cause an acceleration of any obligation
under, or result in the imposition or creation of (or the obligation to
create or impose) a lien on any property or assets of the Company or
any Subsidiary with respect to (i) the terms or provisions of any
Contract, except for any such conflict, breach, violation, default or
event which would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the certificate of incorporation or
bylaws of the Company or any of the Subsidiaries, or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to the Company, the Subsidiaries or any of their respective
properties or assets, except for any such conflict, breach or violation
which would not, individually or in the aggregate, have a Material
Adverse Effect.
(k) Each of the Indenture, the Notes, the Exchange Notes, the
Guarantees and the Registration Rights Agreement conforms in all
material respects to the description thereof in the Final Memorandum.
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(l) The consolidated financial statements of the Company and
the related notes thereto included in the Final Memorandum present
fairly in all material respects the financial position, results of
operations and cash flows of the Company at the dates and for the
periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis,
except as otherwise stated therein, and comply as to form in all
material respects with the applicable accounting requirements of the
Act and the rules and regulations thereunder. To the Company's
knowledge, the financial statements of JPS and the related notes
thereto included in the Final Memorandum present fairly in all material
respects the financial position, results of operations and cash flows
of JPS at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein, and comply as to form in all material respects with the
applicable accounting requirements of the Act and the rules and
regulations thereunder. The financial statements of Valentec and the
related notes thereto included in the Final Memorandum present fairly
in all material respects the financial position, results of operations
and cash flows of Valentec at the dates and for the periods to which
they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein, and comply as to form in all material
respects with the applicable accounting requirements of the Act and the
rules and regulations thereunder. The financial statements of Phoenix
AG's Airbag Division and the related notes thereto included in the
Final Memorandum present fairly in all material respects the financial
position, results of operations and cash flows of Phoenix AG's Airbag
Division at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein, and comply as to form in all material respects with the
applicable accounting requirements of the Act and the rules and
regulations thereunder. The financial statements of Phoenix Airbag GmbH
and the related notes thereto included in the Final Memorandum present
fairly in all material respects the financial position, results of
operations and cash flows of Phoenix Airbag GmbH at the dates and for
the periods to which they relate and have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, except as otherwise stated therein, and comply as to form in all
material respects with the applicable accounting requirements of the
Act and the rules and regulations thereunder. The summary and selected
financial and statistical data included in the Final Memorandum present
fairly in all material respects the information shown therein and have
been prepared and compiled on a basis consistent with the audited
financial statements included therein, except as otherwise stated
therein, and comply as to form in all material respects with the
applicable accounting requirements of the Act and the rules and
regulations thereunder. Each of Price Xxxxxxxxxx XXX,
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XXX Xxxxxxx and Xxxxxx Xxxxxxxx, LLP is an independent public
accounting firm as required by the Act and the rules and regulations
thereunder.
(m) (i) The pro forma financial statements (including the
notes thereto) included in the Final Memorandum (A) comply as to form
in all material respects with the applicable requirements of Regulation
S-X promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (B) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and (C) have been properly computed on the bases described
therein, and (ii) the assumptions used in the preparation of the pro
forma financial statements included in the Final Memorandum are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(n) Except as set forth in the Final Memorandum, there is not
pending or, to the best knowledge of the Company, threatened any
action, suit, proceeding, inquiry or investigation to which the Company
or any of the Guarantors is a party, or to which any of their
properties or assets are subject, before or brought by any court,
arbitrator or governmental agency or body, which, if determined
adversely to the Company or any such Subsidiary, would, individually or
in the aggregate, have a Material Adverse Effect, or which seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Securities to be sold hereunder or the
consummation of the other transactions described in the Final
Memorandum.
(o) Each of the Company and the Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to
conduct the businesses operated by it as described in the Final
Memorandum except where the failure to own or possess such of the
foregoing would not have a Material Adverse Effect, and neither the
Company nor any of the Subsidiaries has received any notice of
infringement of or conflict with (or knows of no such infringement of
or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or know-how
which, if such assertion of infringement or conflict were sustained,
would, individually or in the aggregate, have a Material Adverse
Effect.
(p) Each of the Company and the Subsidiaries possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made or will have made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals presently required or necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
set forth in the Final Memorandum ("Permits"), except where the failure
to obtain such Permits would not, individu-
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ally or in the aggregate, have a Material Adverse Effect; each of the
Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such Permit except where such
revocation, termination or impairment would not have a Material Adverse
Effect; and neither the Company nor any Subsidiary has received any
notice of any proceeding relating to revocation or modification of any
such Permit, except as described in the Final Memorandum and except
where such revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.
(q) Since the respective dates as of which information is
given in the Final Memorandum, except as described therein, there has
been no material adverse change or any fact, taken by itself, known to
the Company which could reasonably be expected to result in a material
adverse change, in the general affairs, management, business, condition
(financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, or any loss of, or
damage to, properties (whether or not insured) which could reasonably
be expected to affect materially and adversely the general affairs,
management, business, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole. Since
the date of the latest balance sheet presented in the Final Memorandum,
except as expressly disclosed in the Final Memorandum, neither the
Company nor any of its Subsidiaries has (i) incurred or undertaken any
liabilities or obligations, direct or contingent, that are material to
the Company and its Subsidiaries taken as a whole other than capital
equipment leases in the ordinary course of business consistent with
past practice, (ii) entered into any material transaction not in the
ordinary course of business and consistent with past practice or (iii)
declared or paid any dividend or made any distribution on any shares of
its capital stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its
capital stock.
(r) Each of the Company and Subsidiaries has filed all
necessary federal, state and foreign income and franchise tax returns,
except where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse Effect, and
has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or any of the Subsidiaries is contesting
in good faith and for which the Company or such Subsidiary has provided
adequate reserves, there is no tax deficiency that has been asserted
against the Company or any Subsidiary that would have, individually or
in the aggregate, a Material Adverse Effect.
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(s) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the Company
believes to be reliable and accurate.
(t) Neither the Company nor any of the Subsidiaries nor any
agent acting on their behalf has taken or will take any action that
might cause this Agreement or the sale of the Securities to violate
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System, in each case as in effect, or as the same may hereafter
be in effect, on the Closing Date.
(u) Each of the Company and the Subsidiaries has good title to
all personal property described in the Final Memorandum as being owned
by it, good and valid title to all real property described in the Final
Memorandum as being owned by it and good and valid title to a leasehold
estate in the real and personal property described in the Final
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final
Memorandum or to the extent the failure to have such title or the
existence of such liens, charges, encumbrances or restrictions would
not, individually or in the aggregate, have a Material Adverse Effect.
All leases, contracts and agreements to which the Company or any
Subsidiary is a party or by which the Company or such Subsidiary is
bound are valid and enforceable against the Company or such Subsidiary,
to the knowledge of the Company 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.
(v) There are no legal or governmental proceedings involving
or affecting the Company, any of the Subsidiaries or any of their
respective properties or assets which would be required to be described
in a prospectus pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents
which would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(w) Except as described in the Final Memorandum or as would
not, individually or in the aggregate, have a Material Adverse Effect,
(A) each of the Company and the Subsidiaries is in compliance with and
not subject to liability under applicable Environmental Laws, (B) each
of the Company and the Subsidiaries has made all filings and provided
all notices required under any applicable Environmental Law, and has
and is in compliance with all Permits required under any applicable
Environmental Laws and each of them is in full force and effect, (C)
there is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the
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knowledge of the Company, threatened against the Company or any
Subsidiary under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any Environmental
Law with respect to any assets, facility or property owned, operated,
leased or controlled by the Company or any Subsidiary, (E) neither the
Company nor any Subsidiary has received notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law and (F) no property or
facility of the Company or any Subsidiary is (i) listed or proposed for
listing on the National Priorities List under CERCLA or (ii) listed in
the Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental
authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials,
into the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), (ii)
the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and aboveground storage tanks, and related piping,
and emissions, discharges, releases or threatened releases therefrom.
(x) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or the Subsidiaries which is
pending or, to the knowledge of the Company, threatened, which would
have a Material Adverse Effect.
(y) Each of the Company and the Subsidiaries carries insurance
in such amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties.
(z) Neither the Company nor any Subsidiary has any liability
for any prohibited transaction within the meaning of Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or funding deficiency within the meaning of Section 302 of ERISA or any
complete or partial withdrawal liability under Section 4201 of ERISA
with respect to any pension, profit sharing or other plan which is
subject to ERISA to which the Company or any Subsidiary makes or ever
has made a contribution and in which any employee of the Company or any
Subsidiary is or has ever been
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a participant. With respect to such plans, each of the Company and the
Subsidiaries is in compliance in all material respects with all
applicable provisions of ERISA.
(aa) Each of the Company and the Subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(bb) Neither the Company nor any Subsidiary will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(cc) Except as set forth on Exhibit A hereto, no holder of
securities of the Company (other than the Registrable Notes (as defined
in the Registration Rights Agreement)) will be entitled to have such
securities registered under the registration statements required to be
filed by the Company pursuant to the Registration Rights Agreement
other than as expressly permitted thereby.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair
saleable value of the assets of the Company and the Subsidiaries, on a
consolidated basis, will exceed the sum of their consolidated stated
liabilities and identified contingent liabilities (after giving effect,
in the case of each of the Guarantors, to the limitations contained in
each Guarantee); neither the Company nor any of the Subsidiaries is, or
will be after giving effect to the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby, (a) left with unreasonably small capital with which to carry on
its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise
insolvent.
(ee) Neither the Company nor any of the Subsidiaries nor any
of their respective Affiliates (as defined in Rule 501(b) of Regulation
D under the Act) has directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Securities in a manner that would require the
registration under the Act of the Securities or (ii) engaged in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the of-
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fering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(ff) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Securities under the Act or to qualify
the Indenture under the TIA.
(gg) No securities of the Company are of the same class
(within the meaning of Rule 144A under the Act) as the Securities and
listed on a national securities exchange registered under Section 6 of
the Exchange Act, or quoted in a U.S. automated inter-dealer quotation
system.
(hh) Neither the Company nor any Subsidiary has taken, nor
will take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities
(ii) Neither the Company nor the Subsidiaries, nor any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Act) or any person acting on any of their behalf (other than
the Initial Purchasers as to which the Company and the Subsidiaries
make no representation) has engaged in any directed selling efforts (as
that term is defined in Regulation S under the Act ("Regulation S"))
with respect to the Securities; the Company and its respective
Affiliates and any person acting on any of their behalf (other than the
Initial Purchasers as to which the Company and the Subsidiaries make no
representation) have complied with the offering restrictions
requirement of Regulation S.
(jj) On June 30, 1997, the Company entered into the JPS
Acquisition Agreement to acquire the assets of JPS from Xxxxxxx &
Xxxxxx Corporation on the terms described in the Final Memorandum.
Any certificate signed by any officer of the Company or any
Subsidiary and delivered to any Initial Purchaser or to counsel for the Initial
Purchasers shall be deemed a joint and several representation and warranty by
the Company and each of the Subsidiaries to each Initial Purchaser as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company and the
Guarantors agree to issue and sell to the Initial Purchasers, and each of the
Initial Purchasers agrees, acting severally and not jointly, to
14
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purchase the Securities, at 97% of their principal amount, in the respective
principal amounts set forth opposite their names on Schedule I hereto.
One or more certificates in definitive form for the Securities
that the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 48 hours prior to
the Closing Date, shall be delivered by or on behalf of the Company to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer of immediately available funds
payable to such account or account as the Company shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Securities shall be made at
the offices of Shereff, Friedman, Xxxxxxx and Xxxxxxx, LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York time, on July 24, 1997, or at such
other place, time or date as the Initial Purchasers and the Company may agree
upon, such time and date of delivery against payment being herein referred to as
the "Closing Date." The Company will make such certificate or certificates for
the Securities available for checking and packaging by the Initial Purchasers at
the offices of BT Securities Corporation in New York, New York or such other
place as BT Securities Corporation may designate, at least 24 hours prior to the
Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the sole judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. The Company and the Guarantors
covenant and agree with each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers and counsel to the Initial Purchasers shall not previously
have been advised and furnished a copy for a reasonable period of time
prior to the proposed amendment or supplement and as to which the
Initial Purchasers shall not have given their consent, which consent
shall not be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable
in connection with the resale of the Securities by the Initial
Purchasers.
(b) The Company and the Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities
for offering and sale under
15
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the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchasers may designate and will continue such qualification in effect
for as long as may be necessary to complete the resale of the
Securities by the Initial Purchasers; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject the Company to any tax in any
such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes or the Private
Exchange Notes, any event occurs or information becomes known as a
result of which the Final Memorandum as then amended or supplemented
would include an untrue statement of a material fact, or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement
the Final Memorandum in order to comply with applicable law, the
Company will promptly notify the Initial Purchasers thereof and will
prepare, at the Company's expense, an amendment to the Final Memorandum
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of
the Securities substantially as set forth under "Use of Proceeds" in
the Final Memorandum.
(f) For so long as any Securities remain outstanding, the
Company will furnish to the Initial Purchasers copies of all reports
and other communications (financial or otherwise) furnished by the
Company to the Trustee or the holders of the Securities and, as soon as
available, copies of any reports or financial statements furnished to
or filed by the Company with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by its most recent financial statements appearing in the
Final Memorandum.
(h) None of the Company, the Guarantors nor any of their
respective Affiliates will sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect
16
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of any "security" (as defined in the Act) that could be integrated with
the sale of the Securities in a manner that would require the
registration under the Act of the Securities.
(i) Neither the Company nor any Guarantor will, nor will the
Company permit any of the Subsidiaries to, engage in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding,
the Company will make available, upon request, to any holder of such
Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(k) Each of the Company and the Guarantors will use its best
efforts to (i) permit the Securities to be designated PORTAL securities
in accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. (the "NASD") relating to
trading in the Private Offerings, Resales and Trading through Automated
Linkages market (the "PORTAL Market") and (ii) permit the Securities to
be eligible for clearance and settlement through The Depository Trust
Company.
(l) In connection with any Notes offered and sold in an
offshore transaction (as defined in Regulation S), the Company will not
register any transfer of such Notes not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Notes in the
form of definitive securities.
6. Expenses. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to: (i) the printing, word processing or other production of documents
with respect to such transactions, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendments or
supplements thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) the preparation
(including printing), issuance and delivery to the Initial Purchasers of any
certificates evidencing the Securities, (v) the qualification of the Securities
under state securities and "Blue Sky" laws, including filing fees and reasonable
fees and disbursements of counsel for the Initial Purchasers relating thereto,
(vi) the expenses of the Company in connection with
17
-17-
any meetings with prospective investors in the Securities, (vii) the fees and
expenses of the Trustee, including fees and expenses of its counsel, and (viii)
all expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL Market and (ix) any fees charged by
investment rating agencies for the rating of the Securities. If the issuance and
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 7
hereof is not satisfied, because this Agreement is terminated pursuant to
Section 11 hereof or because of any failure, refusal or inability on the part of
the Company or any Guarantor to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder (other than solely
by reason of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance herewith), the
Company will promptly reimburse the Initial Purchasers upon demand for all
reasonable out-of-pocket expenses (including fees, disbursements and charges of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers) that shall have
been incurred by the Initial Purchasers in connection with the proposed purchase
and sale of the Securities.
7. Conditions of the Initial Purchasers' Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have
received the opinion, dated as of the Closing Date and addressed to the
Initial Purchasers, of Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP,
counsel for the Company, in form and substance satisfactory to counsel
for the Initial Purchasers, to the effect that:
(i) Each of the Company and the Guarantors is duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Final Memorandum. Each of the Company and the
Guarantors is duly qualified as a foreign corporation and in
good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a
Material Adverse Effect.
(ii) The Company has the authorized capitalization as
set forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Subsidiaries are owned,
directly or indirectly, by the Company, free and clear of all
liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions) or
voting.
18
-18-
(iii) To the knowledge of such counsel, except as set
forth in the Final Memorandum, (A) no options, warrants or
other rights to purchase from the Company or any Subsidiary
shares of capital stock or ownership interests in the Company
or any Subsidiary are outstanding (other than options granted
in 1995 by Valentec International Corporation to Citibank,
N.A. to purchase 10,000 shares of common stock), (B) no
agreements or other obligations of the Company or any
Subsidiary to issue, or other rights to cause the Company or
any Subsidiary to convert, any obligation into, or exchange
any securities for, shares of capital stock or ownership
interests in the Company or any Subsidiary are outstanding
and, (C) no holder of securities of the Company or any
Subsidiary (other than the Registrable Notes) is entitled to
have such securities registered under a registration statement
filed by the Company pursuant to the Registration Rights
Agreement (other than as set forth on Exhibit A hereto).
(iv) Each of the Guarantors has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Indenture and the Guarantees; the
Indenture is in sufficient form for qualification under the
TIA; the Indenture has been duly and validly authorized,
executed and delivered by each of the Company and the
Guarantors, and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes the valid and
legally binding agreement of the Company and each of the
Guarantors, enforceable against each of them in accordance
with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(v) The Notes are in the form contemplated by the
Indenture. The Notes have each been duly and validly
authorized, executed and delivered by the Company and, when
paid for by the Initial Purchasers in accordance with the
terms of this Agreement (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the valid and
legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights gener-
19
-19-
ally and (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
(vi) The Guarantees are in the form contemplated by
the Indenture. The Guarantees have been duly and validly
authorized, executed and delivered by each Guarantor and
(assuming the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and delivery
of the Notes by the Trustee in accordance with the Indenture)
constitute the valid and legally binding obligations of each
Guarantor, entitled to the benefits of the Indenture,
enforceable against each of them in accordance with their
terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court
before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law). No opinion is expressed with
respect to the effectiveness or enforceability against third
parties of the Guarantees.
(vii) The Exchange Notes and the Private Exchange
Notes and the Guarantees to be endorsed on them have been duly
and validly authorized by the Company and each of the
Guarantors, as the case may be, and when the Exchange Notes
and the Private Exchange Notes have been duly executed and
delivered by the Company and the Guarantees have been duly
executed and delivered by the Guarantors, each in accordance
with the terms of the Registration Rights Agreement and the
Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and the
Private Exchange Notes by the Trustee in accordance with the
Indenture), will constitute the valid and legally binding
obligations of the Company and the Guarantors, respectively,
entitled to the benefits of the Indenture, and enforceable
against the Company and the Guarantors, respectively, in
accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor
may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
20
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(viii) Each of the Company and the Guarantors has all
requisite corporate power and authority to execute, deliver
and perform its obligations under the Registration Rights
Agreement; the Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the Company and
the Guarantors, and (assuming due authorization, execution and
delivery thereof by the Initial Purchasers) constitutes the
valid and legally binding agreement of the Company and the
Guarantors enforceable against each of them in accordance with
its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) and (B) any rights to
indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(ix) Each of the Company and the Guarantors has all
requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby; this
Agreement and the consummation by the Company and the
Guarantors of the transactions contemplated hereby have been
duly and validly authorized by the Company and the Guarantors.
This Agreement has been duly executed and delivered by each of
the Company and the Guarantors.
(x) The Indenture, the Notes, the Exchange Notes,
the Guarantees and the Registration Rights Agreement conform
as to legal matters in all material respects to the
descriptions thereof contained in the Final Memorandum.
(xi) To the knowledge of such counsel, no legal or
governmental proceedings are pending or, to the knowledge of
such counsel, threatened to which the Company or any Guarantor
is a party or to which the property or assets of the Company
or any Guarantor is subject which would be required under the
Act to be described in a registration statement or in a
prospectus and are not described in the Final Memorandum, or
which seek to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Notes to be
sold hereunder or the consummation of the other transactions
described in the Final Memorandum.
(xii) To the knowledge of such counsel, neither the
Company nor any Guarantor is in violation of its certificate
of incorporation or bylaws, ex-
21
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cept for any such breach, default, violation or event which
would not, individually or in the aggregate, have a Material
Adverse Effect.
(xiii) The execution, delivery and performance of
this Agreement, the Indenture, the Registration Rights
Agreement, the consummation of the transactions contemplated
hereby and thereby (including, without limitation, the
issuance and sale of the Notes to the Initial Purchasers) the
consummation of the JPS Acquisition and the amendment to the
Credit Agreement will not conflict with or constitute or
result in a breach or a default under (or an event which with
notice or passage of time or both would constitute a default
under) or violation of or cause an acceleration of any
obligation under, or result in the imposition or creation of
(or the obligation to create or impose) a lien on any property
or assets of the Company or any Guarantor with respect to (i)
the terms or provisions of any of the terms or provisions of
any contract described in the Final Memorandum (such
contracts, the "Material Contracts"), except for any such
conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws of the
Company or any Guarantor, or (iii) (assuming compliance with
all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 8 hereof) any statute,
judgment, decree, order, rule or regulation known to such
counsel to be applicable to the Company or any Guarantor and
to transactions of the type contemplated by the Final
Memorandum, except for any such conflict, breach or violation
which would not, individually or in the aggregate, have a
Material Adverse Effect.
(xiv) To the knowledge of such counsel, no consent,
approval, authorization or order of any governmental authority
is required for the issuance and sale by the Company of the
Notes to the Initial Purchasers or the other transactions
contemplated in this Agreement, except (i) in connection with
the registration under the Act of the Notes, and the Private
Exchange Notes, if applicable, pursuant to the Registration
Rights Agreement, (ii) the qualification of the Indenture
under the TIA in connection with the issuance of the Notes, or
(iii) such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits
(x) as have been obtained and made, (y) as may be required
under state securities or blue sky laws, as to which such
counsel need express no opinion, or (x) as would not, if not
obtained, have a Material Adverse Effect.
(xv) None of the Company or the Guarantors is, or
immediately after the sale of the Notes to be sold hereunder
and the application of the pro-
22
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ceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be, an "investment
company" as such term is defined in the Investment Company Act
of 1940, as amended.
(xvi) No registration under the Act of the Notes is
required in connection with the sale of the Notes to the
Initial Purchasers as contemplated by this Agreement and the
Final Memorandum or in connection with the initial resale of
the Notes by the Initial Purchasers in accordance with Section
8 of this Agreement, and prior to the commencement of the
Exchange Offer (as defined in the Registration Rights
Agreement) or the effectiveness of the Shelf Registration
Statement (as defined in the Registration Rights Agreement),
the Indenture is not required to be qualified under the TIA,
in each case assuming (i) that the purchasers who buy such
Notes in the initial resale thereof are QIBs or Accredited
Investors, (ii) the accuracy of the Initial Purchasers'
representations in Section 8 and those of the Company
contained in this Agreement regarding the absence of a general
solicitation in connection with the sale of such Notes to the
Initial Purchasers and the initial resale thereof, (iii) the
due performance by the Initial Purchasers of the agreements
set forth in Section 8 hereof and the offering and transfer
procedures set forth in the Final Memorandum, and (iv) the
accuracy of the representations made by each Accredited
Investor who purchases Notes in the initial resale as set
forth in the Final Memorandum.
(xvii) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance,
execution or delivery of the Notes will violate Regulation G,
T, U or X of the Board of Governors of the Federal Reserve
System.
At the time the foregoing opinion is delivered, such counsel
shall additionally state that it has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants for the Company, representatives of
the Initial Purchasers and counsel for the Initial Purchasers, at which
conferences the contents of the Final Memorandum and related matters
were discussed, and, although it has not independently verified and is
not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Final
Memorandum (except to the extent specified in subsection 7(a)(x)), no
facts have come to its attention which lead it to believe that the
Final Memorandum, on the date thereof or at the Closing Date, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such firm need
express no opinion with respect to the financial statements and related
notes thereto
23
-23-
and the other financial, statistical, accounting, reserve and well data
included in the Final Memorandum). The opinion of such counsel
described in this Section shall be rendered to the Initial Purchasers
at the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (a)
shall include any amendment or supplement thereto prepared in
accordance with the provisions of this Agreement at the Closing Date.
References to Material Adverse Effect in this subsection (a) shall not
include prospects of the Company and the Subsidiaries, taken as a
whole.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States and the laws of the States of New
York and Delaware. Such counsel may also state that with respect to
opinions as to the laws of jurisdictions other than Delaware and New
York, such counsel has relied on the opinion of local counsel of the
Company. Such counsel may also state that, insofar as such opinion
involves factual matters, such counsel have relied, to the extent they
deem proper, upon certificates of officers of the Company and
certificates of public officials; provided that such certificates have
been provided to the Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall have
received the opinions, dated as of the Closing Date and addressed to the Initial
Purchasers, of Beiten, Xxxxxxxxx, Xxxx & Xxxxxxx, special German counsel for the
foreign subsidiaries and Bryan, Gonzales, Xxxxxx y Xxxxxxxx Xxx, S.C. Abogados,
special Mexican counsel for the foreign subsidiaries, each in form and substance
satisfactory to counsel for the Initial Purchasers substantially to the effect
that:
(i) Each of the foreign subsidiaries is duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Final Memorandum.
(ii) No legal or governmental proceedings are pending
or, to the knowledge of such counsel, threatened to which any
foreign subsidiary is a party or to which the property or
assets of such foreign subsidiary is subject which would be
required under the Act to be described in a registration
statement or in a prospectus and are not described in the
Final Memorandum, or which seek to restrain, enjoin, prevent
the consummation of or otherwise chal-
24
-24-
lenge the issuance or sale of the Notes to be sold hereunder
or the consummation of the other transactions described in the
Final Memorandum.
(iii) To the knowledge of such counsel, no foreign
subsidiary is (i) in violation of its incorporation documents
or (ii) in breach or default under (nor has any event occurred
which, with notice or passage of time or both, would
constitute a default under) or in violation of any of the
terms or provisions of any contract described in the Final
Memorandum (such contracts, the "Material Contracts"), except
for any such breach, default, violation or event which would
not, individually or in the aggregate, have a Material Adverse
Effect.
(iv) The execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement,
the consummation of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and sale
of the Notes to the Initial Purchasers), the consummation of
the JPS Acquisition and the amendment to the Credit Agreement
will not conflict with or constitute or result in a breach or
a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of
or cause an acceleration of any obligation under, or result in
the imposition or creation of (or the obligation to create or
impose) a lien on any property or assets of any foreign
subsidiary with respect to (i) the terms or provisions of any
Material Contract, except for any such conflict, breach,
violation, default or event which would not, individually or
in the aggregate, have a Material Adverse Effect, (ii) the
incorporation documents of such foreign subsidiary, or (iii)
(assuming compliance with all applicable state securities or
"Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in
Section 8 hereof) any statute, judgment, decree, order, rule
or regulation known to such counsel to be applicable to any
foreign subsidiary and to transactions of the type
contemplated by the Final Memorandum, except for any such
conflict, breach or violation which would not, individually or
in the aggregate, have a Material Adverse Effect.
(v) To the knowledge of such counsel, the foreign
subsidiaries have obtained all Permits necessary to conduct
the businesses now or proposed to be conducted by them as
described in the Final Memorandum, the lack of which would,
individually or in the aggregate, have a Material Adverse
Effect; each of the foreign subsidiaries has fulfilled and
performed all of its obligations with respect to such Permits
and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of
the holder of any such
25
-25-
Permit, except for any such revocation or termination which
would not have a Material Adverse Effect.
The opinion of such counsel described in this Section shall be rendered
to the Initial Purchasers at the request of the Company and shall so state
therein. References to the Final Memorandum in this subsection (b) shall include
any amendment or supplement thereto prepared in accordance with the provisions
of this Agreement at the Closing Date. References to Material Adverse Effect in
this subsection (b) shall not include prospects of the Company and the
Subsidiaries, taken as a whole. Such counsel may state that, insofar as such
opinion involves factual matters, such counsel have relied, to the extent they
deem proper, upon certificates of officers of the Company and certificates of
public officials; provided that such certificates have been provided to the
Initial Purchasers.
(c) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Initial Purchasers, with respect to certain legal matters relating to
this Agreement, and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Xxxxxx
Xxxxxx & Xxxxxxx shall have received and may rely upon such
certificates and other documents and information as they may reasonably
request to pass upon such matters.
(d) The Initial Purchasers shall have received from Price
Waterhouse LLP, independent public accountants for the Company, comfort
letters, dated the date hereof and the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and counsel
for the Initial Purchasers.
(e) The representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of
the Closing Date; each of the Company and the Guarantors shall have
performed in all material respects all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and, except as set forth in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof) subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no
event or development that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect.
(f) The issuance and sale of the Securities pursuant to this
Agreement shall not 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 before any court or governmental authority.
26
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(g) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company by its
Executive Vice President and its Secretary to the effect that:
(i) The representations and warranties of the
Company and the Guarantors in this Agreement are true and
correct in all material respects as if made on and as of the
Closing Date, and each of the Company and the Guarantors has
performed in all material respects all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing
Date;
(ii) At the Closing Date, since the date hereof or
since the date of the most recent financial statements in the
Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), no event or events have
occurred, no information has become known nor does any
condition exist that, individually or in the aggregate, would
have a Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not
been enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall have
received the Registration Rights Agreement executed by the Company and
the Guarantors and such agreement shall be in full force and effect at
all times from and after the Closing Date.
(i) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Notes and the Guarantees shall
have been duly executed by the Company and the Guarantors,
respectively, and the Notes shall have been duly authenticated by the
Trustee.
(j) The Initial Purchasers shall have received a true and
correct copy of the JPS Acquisition Agreement and any amendments
thereto, and there shall have been no material amendments, alterations,
modifications or waivers of any provisions of the JPS Acquisition
Agreement since the date of this Agreement; all conditions to effect
the JPS Acquisition set forth in the JPS Acquisition Agreement shall
have been satisfied without waiver, other than such conditions the
waiver of which would not have a Material Adverse Effect.
(k) The Initial Purchasers shall have received a true and
correct copy of the Company's Credit Agreement, dated as of May 21,
1997 (the "Credit Agreement"), as amended, and, except as described in
(k) below and in the Final Memorandum, there
27
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shall have been no material amendments, alterations, modifications or
waivers of any provisions of the Credit Agreement, and there exists as
of the date hereof and on and as of the Closing Date (after giving
effect to the transactions contemplated by this Agreement and the
application of the proceeds received by the Company from the sale of
the Notes) no condition that would constitute a Default or an Event of
Default (each as defined in the Credit Agreement) under the Credit
Agreement.
(l) The Company has provided evidence to the Initial
Purchasers, satisfactory to the Initial Purchasers, to the effect that
on or before the Closing Date, the Credit Agreement shall have been
converted as set forth under the caption "Description of the Credit
Agreement" in the Final Memorandum, which evidence shall be in form and
substance reasonably satisfactory to the Initial Purchasers.
(m) On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further
documents, certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company as they
shall have heretofore reasonably requested from the Company and the
Guarantors.
All such documents, opinions, certificates and schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates and schedules or instruments in such quantities as the
Initial Purchasers shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. Each of
the Initial Purchasers represents and warrants (as to itself only) that it is a
QIB. Each of the Initial Purchasers agrees with the Company (as to itself only)
that (i) it has not and will not solicit offers for, or offer or sell, the
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act; and (ii) it has
and will solicit offers for the Securities only from, and will offer the
Securities only to (A) in the case of offers inside the United States, (x)
persons whom the Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchasers that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A or (y) a limited number of other
institutional investors reasonably believed by the Initial Purchasers to be
Accredited Investors that, prior to their purchase of the Securities, deliver to
the Initial Purchasers a letter containing the representations and agreements
set forth in Annex A
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-28-
to the Final Memorandum and (B) in the case of offers outside the United States,
to persons other than U.S. persons ("foreign purchasers," which term shall
include dealers or other professional fiduciaries in the United States acting on
a discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that in the case of this clause (B), in purchasing
such Securities such persons are deemed to have represented and agreed as
provided under the caption "Transfer Restrictions" contained in the Final
Memorandum.
9. Indemnification and Contribution. (a) The Company and the
Guarantors agree, jointly and severally, to indemnify and hold harmless the
Initial Purchasers and the affiliates, directors, officers, agents,
representatives and employees of the Initial Purchasers, and each other person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities, joint or several, to which any Initial Purchaser or any such
affiliate, director, officer, agent, representative, employee or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as any such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
of any material fact contained in (A) any Memorandum or any
amendment or supplement thereto or (B) any application or
other document, or any amendment or supplement thereto,
executed by the Company or any Guarantor or based upon written
information furnished by or on behalf of the Company or any
Guarantor filed in any jurisdiction in order to qualify the
Securities under the securities or "Blue Sky" laws thereof or
filed with any securities association or securities exchange
(each, an "Application"); or
(ii) the omission or alleged omission to state, in
any Memorandum or any amendment or supplement thereto, or any
Application, a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such affiliate,
director, officer, agent, representative and employee and each such controlling
person for any legal or other expenses reasonably incurred by the Initial
Purchasers, such affiliate, director, officer, agent, representative or employee
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Guarantors will not be liable (i) in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Memorandum or any amendment or supplement thereto, or any Application, in
reliance upon and in conformity with written information furnished to the
29
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Company by the Initial Purchasers specifically for use therein or (ii) with
respect to the Preliminary Memorandum, to the extent that any such loss, claim,
damage or liability arises solely from the fact that the Initial Purchasers sold
Securities to a person to whom there was not sent or given a copy of the Final
Memorandum (as amended or supplemented) at or prior to the written confirmation
of such sale if the Company shall have previously furnished copies thereof to
the Initial Purchasers in accordance with Section 5(d) hereof and the Final
Memorandum (as amended or supplemented) would have corrected any such untrue
statement or omission. This indemnity agreement will be in addition to any
liability that the Company and the Guarantors may otherwise have to the
indemnified parties. The Company and the Guarantors shall not be liable under
this subsection (a) for any settlement of any claim or action effected without
their consent, which consent shall not be unreasonably withheld or delayed.
The Initial Purchasers shall not, without the prior written
consent of the Company and the Guarantors, effect any settlement or compromise
of any pending or threatened proceeding in respect of which the Company and the
Guarantors are or could have been a party, or indemnity could have been sought
hereunder by the Company and the Guarantors, unless such settlement (A) includes
an unconditional written release of the Company and the Guarantors, in form and
substance reasonably satisfactory to the Company and the Guarantors, from all
liability on claims that are the subject matter of such proceeding and (B) does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of the Company or the Guarantors.
(b) The Initial Purchasers agree, severally and not jointly,
to indemnify and hold harmless the Company and the Guarantors, their respective
affiliates, directors, officers, agents, representatives and employees and each
other person, if any, who controls the Company and the Guarantors within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any Guarantor or
any such affiliate, director, officer, agent, representative, employee or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Memorandum or any
amendments or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by such Initial Purchaser specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any Guarantor or any such af-
30
-30-
filiate, director, officer, agent, representative, employee or controlling
person in connection with investigating or defending against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchasers may otherwise have to the indemnified
parties. The Initial Purchasers shall not be liable under this Section 9 for any
settlement of any claim or action effected without their consent, which consent
shall not be unreasonably withheld or delayed.
The Company and the Guarantors shall not, without the prior
written consent of the Initial Purchasers, effect any settlement or compromise
of any pending or threatened proceeding in respect of which any Initial
Purchaser is or could have been a party, or indemnity could have been sought
hereunder by any Initial Purchaser, unless such settlement (A) includes an
unconditional written release of the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under subsection (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in subsections (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indem-
31
-31-
nified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by BT Securities
Corporation in the case subsection (a) of this Section 9 or the Company in the
case of subsection (b) of this Section 9, representing the indemnified parties
under such subsection (a) or subsection (b), as the case may be, who are parties
to such action or actions) or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement
provided for in the preceding subsections of this Section 9 is unavailable to,
or insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company and
the Guarantors on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by such Initial Purchaser. The relative fault of the
parties shall be determined by reference to, among other things, whether
32
-32-
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors on the one hand, or such Initial Purchaser on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Guarantors and the Initial Purchasers agree that
it would not be just and equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this subsection (d). Notwithstanding any other
provision of this subsection (d), no Initial Purchaser shall be obligated to
make contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this subsection
(d), each affiliate, director, officer, agent, representative and employee of an
Initial Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Initial Purchasers, and each
affiliate, director, officer, agent, representative and employee of the Company
and the Guarantors and each person, if any, who controls the Company or an
Guarantor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company and the
Guarantors.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, the Guarantors, their officers and the Initial Purchasers set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Guarantors, any of their
officers or directors, the Initial Purchasers or any controlling person referred
to in Section 9 hereof and (ii) delivery of and payment for the Securities. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Closing Date in the event that the Company or any of the Guarantors shall
have failed, refused or been unable to perform, in all material respects, all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Date:
33
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(i) either (x) the Company or any Guarantor shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding,
which loss or interference, in the sole judgment of the Initial
Purchasers, has had or has a Material Adverse Effect, or (y) there
shall have been, in the sole judgment of the Initial Purchasers, any
event or development that, individually or in the aggregate, has or
could be reasonably likely to have a Material Adverse Effect (including
without limitation a change in control of the Company), except in each
case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market
shall have been suspended or maximum or minimum prices shall have been
established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency or (C) any material change in the financial
markets of the United States that, in the case of (A), (B) or (C) above
and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded
or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The
statements set forth in the last paragraph of the cover page and the third,
fifth, sixth and seventh paragraphs of the section entitled "Private Placement"
constitute the only information furnished by the Initial Purchasers to the
Company for the purposes of Sections 2(a) and 9 hereof.
34
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13. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered or
telecopied and confirmed in writing to BT Securities Corporation, One Bankers
Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department, and if sent to the Company or the Guarantors, shall be
mailed, delivered or telecopied and confirmed in writing to the Company at: 0000
Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention: President.
14. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company, the Guarantors and
their respective successors, assigns and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained; this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of the Initial Purchasers, the Company, the
Guarantors and their respective successors, assigns and legal representatives
and for the benefit of no other person except that (i) the indemnities of the
Company and the Guarantors contained in Section 9 of this Agreement shall also
be for the benefit of the affiliates, directors, officers, agents,
representatives and employees of the Initial Purchasers and any person or
persons who control any of the Initial Purchasers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Initial Purchasers contained in Section 9 of this Agreement shall also be for
the benefit of the affiliates, directors, officers, agents, representatives and
employees of the Company and the Guarantors and any person or persons who
control the Company or any Guarantor within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of any of the Securities from
the Initial Purchasers will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Company, the Guarantors and the Initial Purchasers.
Very truly yours,
THE COMPANY:
SAFETY COMPONENTS
INTERNATIONAL, INC.
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
THE GUARANTORS:
AUTOMOTIVE SAFETY
COMPONENTS INTERNATIONAL,
INC., as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
ASCI HOLDINGS GERMANY (DE)
INC., as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
00
-00-
XXXX XXXXXXXX XX (XX), INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
ASCI HOLDINGS MEXICO (DE),
INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
ASCI HOLDINGS CZECH (DE), INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
ASCI HOLDINGS ASIA (DE), INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
37
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VALENTEC INTERNATIONAL
CORPORATION
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
GALION, INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
VALENTEC SYSTEMS, INC.
,as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
SAFETY COMPONENTS FABRIC
TECHNOLOGIES, INC.
, as Guarantor
By: /s/Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
38
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The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
BT SECURITIES CORPORATION
By: /s/ Xxxxx XxXxxxxxx
------------------------------------
Name: Xxxxx XxXxxxxxx
Title: Vice President
ALEX. XXXXX & SONS INCORPORATED
By: /s/Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
BANCAMERICA SECURITIES, INC.
By: /s/Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Managing Director
