June 19, 2001
140,000 Units
New World Coffee - Manhattan Bagel, Inc.
Senior Secured Increasing Rate Notes Due 2003
with Common Stock Purchase Warrants
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
New World Coffee - Manhattan Bagel, Inc., a Delaware corporation (the
"Company"), hereby confirms its agreement with you (the "Initial Purchaser"), as
set forth below. Capitalized terms used in this agreement ("Agreement") and not
otherwise defined herein shall have the meanings assigned to such terms in the
Indenture (as defined below).
1. Issuance of Securities. Subject to the terms and conditions herein
contained, the Company shall issue and sell to the Initial Purchaser 140,000
Units (each a "Unit" and collectively, the "Units"), each consisting of (a)
$1,000 principal amount of the Company's Senior Secured Increasing Rate Notes
due 2003 (collectively, the "Notes") and (b) one warrant (collectively, the
"Warrants") to purchase shares of the Company's common stock, par value $0.001
per share (the "Common Stock"). The Warrants will represent, in the aggregate,
the right to purchase 18% of the fully-diluted Common Stock. The Notes are to be
issued under an indenture (the "Indenture") to be dated as of the Closing Date
(as defined in Section 3 hereof) by and between the Company, each of the
Subsidiary Guarantors listed thereon and United States Trust Company of New
York, as trustee (the "Trustee").
Pursuant to the Collateral Agreements (as defined in the Indenture) to be
entered into by the Company and the Trustee on the Closing Date, the Company
will grant and pledge to the Trustee, for the equal and ratable benefit of the
holders of the Notes, (i) a security interest in substantially all assets of the
Company and its subsidiaries, (ii) subject to obtaining certain third party
consents, a mortgage lien on substantially all of the Company's real property
and improvements thereon and (iii) subject to certain conditions, mortgage liens
on leasehold interests in the premises and improvements thereon occupied by the
Company pursuant to leases of store properties entered into by the Company after
the date of issuance of the Notes, in each case to secure the payment and
performance of the obligations of the Company under the Indenture and the Notes.
The security interests in the collateral securing the Notes will be subordinated
to a lien securing the obligations under any future Eligible Credit Facility.
Pursuant to the Indenture, all current and future subsidiaries of the
Company (other than New World EnbcDeb Corp.), jointly and severally, shall fully
and unconditionally guarantee, on a senior secured basis, to each holder of
Notes and the Trustee, the payment and performance of the Company's obligations
under the Indenture and the Notes (each such subsidiary being referred to herein
as a "Subsidiary Guarantor" and each such guarantee being referred to herein as
a "Guarantee"); provided, however, that the Guarantees shall be subject to the
rights of lenders under any future Eligible Credit Facility.
The Warrants are to be issued by the Company under a warrant agreement to
be dated as of the Closing Date (the "Warrant Agreement") for the benefit of the
holders of the certificates evidencing the Warrants. The shares of Common Stock
issuable upon exercise of the Warrants are herein referred to as the "Warrant
Shares". The Notes, Warrants, Warrant Shares and Units are collectively referred
to herein as the "Securities." This Agreement, the Indenture, the Collateral
Agreements, the Registration Rights Agreement and the Warrant Agreement may
sometimes hereinafter be referred to as the "Transaction Documents."
The Units are being offered and sold to the Initial Purchaser without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on certain exemptions therefrom.
In connection with the offer and sale of the Units, the Company has
prepared a preliminary offering circular, dated June 7, 2001 (the "Preliminary
Offering Circular"), and a final offering circular dated June 15, 2001 (the
"Final Offering Circular"), setting forth a description of the terms of the
Securities and the Collateral Agreements, the terms of the offering of the Units
and a description of the business of the Company. "Offering Circular" means, as
of any date or time referred to in this Agreement, the most recent offering
circular (whether the Preliminary Offering Circular or the Final Offering
Circular, or any amendment or supplement to either such document), including
exhibits and schedules thereto.
The Company understands from the Initial Purchaser that the Initial
Purchaser proposes to make an offering of the Units described herein on the
terms and in the manner set forth herein and in the Final Offering Circular (the
"Units Offering") as soon as the Initial Purchaser deems advisable after this
Agreement has been executed and delivered. The Company also understands from the
Initial Purchaser that, at such time, (a) the Initial Purchaser intends to make
an offering of the Notes (i) to persons in the United States whom the Initial
Purchaser reasonably believes to be qualified institutional buyers ("QIBs") as
defined in Rule 144A under the Act, as such rule may be amended from time to
time ("Rule 144A"), (ii) in transactions under Rule 144A to a limited number of
persons whom the Initial Purchaser reasonably believes (based upon written
representations made by such persons to the Initial Purchaser) to be
institutional "accredited investors" ("Accredited Investors") as defined in Rule
501(a)(1), (2), (3) or (7) under the Act, and (iii) outside the United States in
compliance with Regulation S under the Act and (b) the Initial Purchaser intends
to make an offering of the Warrants to QIBs and Accredited Investors in a
transaction not involving a public offering.
The Initial Purchaser and its direct and indirect transferees of the Units
will be entitled to the benefits of a registration rights agreement,
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement"), pursuant to which the Company shall agree, among other things, (i)
to file a registration statement with the Securities and Exchange Commission
(the "Commission") registering under the Act the Notes, the Exchange Notes or
the Private Exchange Notes (the Exchange Notes, together with the Private
Exchange Notes, shall sometimes be referred to hereinafter as the "New Notes"),
and (ii) to grant certain registration rights to the holders of the Warrant
Shares.
2. Representations and Warranties. The Company, on behalf of itself and
each of its Subsidiaries, represents and warrants to and agrees with the Initial
Purchaser that:
(a) Neither the Preliminary Offering Circular, the Final Offering Circular,
nor any amendment or supplement thereto, as of the date thereof and at all times
subsequent thereto up to the Closing Date, 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
the Initial Purchaser and furnished to the Company in writing by the Initial
Purchaser or its counsel expressly for use in the Preliminary Offering Circular
or the Final Offering Circular or any amendment or supplement thereto. No
injunction or order has been issued that either (i) asserts that any of the
transactions contemplated by this Agreement or the Transaction Documents (as
defined herein) is subject to the registration requirements of the Act or (ii)
would prevent or suspend the issuance or sale of the Units or the use of the
Preliminary Offering Circular, the Final Offering Circular, or any amendment or
supplement thereto, in any jurisdiction. Each of the Preliminary Offering
Circular and the Final Offering Circular, as of their respective dates,
contained, and the Final Offering Circular, as amended or supplemented as of the
Closing Date, will contain, all the information specified in, and meet the
requirements of, Rule 144A(d)(4) under the Act. The documents incorporated by
reference in the Preliminary Offering Circular and the Final Offering Circular,
at the time they were filed with the Commission, complied in all material
respects with the requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations thereunder,
and, when read together with the other information in the Final Offering
Circular, at the time the Final Offering Circular was issued and at the Closing
time, did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(b) The Company has the authorized capitalization set forth in the Final
Offering Circular, and the authorized capital stock of the Company conforms to
the statements relating thereto contained in the Final Offering Circular. All of
the outstanding shares of capital stock of the Company and its Subsidiaries have
been duly authorized and, on the Closing Date, will be validly issued, fully
paid and nonassessable and will not have been issued in violation of any
preemptive or similar rights. Except as disclosed in the Final Offering
Circular, (i) all of the outstanding shares of capital stock of each of the
Subsidiaries of the Company are owned, directly or indirectly, by the Company,
free and clear of all liens, security interests, mortgages, pledges, charges,
equities, claims or restrictions on transferability or encumbrances of any kind
(collectively, "Encumbrances"), other than those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions, (ii) there are no
outstanding (A) options, warrants or other rights to purchase from the Company
or any of its Subsidiaries, (B) agreements, contracts, arrangements or other
obligations of the Company or any of its Subsidiaries to issue or (C) other
rights to convert any obligation into or exchange any securities for, in the
case of each of clauses (A) through (C), shares of capital stock of or other
ownership interests ("Equity Interests") in the Company or any of its
Subsidiaries. Except as set forth in the Final Offering Circular, the Company
does not own and does not have any Subsidiaries that own, directly or
indirectly, any Equity Interests of any kind in any firm, partnership, joint
venture or other entity.
(c) Each of the Company and its Subsidiaries is duly incorporated, validly
existing and in good standing as a corporation under the laws of its
jurisdiction of incorporation, with all requisite corporate power and authority
to own its properties and conduct its business as now conducted, and as
described in the Final Offering Circular, except that Manhattan Bagel
Construction Corp., Bay Area Bagel, Inc., DAB Industries, Inc. and CR Bagel
Leases, Inc., each of which is an inactive subsidiary with no material assets,
currently are not in good standing. Each of the Company and its Subsidiaries is
duly licensed or qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such licensing or
qualification, except where the failure to be so licensed or qualified would
not, individually or in the aggregate, result in a Material Adverse Effect. For
the purposes of this Agreement, a "Material Adverse Effect" shall mean a
material adverse effect on (i) the management, business, condition (financial or
otherwise), prospects or results of operations of the Company and its
Subsidiaries, taken as a whole, or (ii) the Company's ability to perform any of
its material obligations under any of the agreements, documents or instruments
contemplated to be entered into by the Company hereby, by the Transaction
Documents (as defined below) or by the Final Offering Circular.
(d) The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Notes. The Notes have been duly
and validly authorized by the Company and, when executed by the Company and each
Subsidiary Guarantors party thereto 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 Purchaser in accordance with the
terms of this Agreement and the Indenture, will have been duly executed, issued
and delivered and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture, the Collateral Agreements
and the Registration Rights Agreement, and enforceable against the Company and
its Subsidiaries (including each Subsidiary Guarantor party thereto) in
accordance with their respective terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, receivership,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity (whether applied by a court of law or equity) and the discretion of the
court before which any proceeding therefore may be brought.
(e) The Company and each of the Subsidiary Guarantors has all requisite
corporate power and authority to execute, deliver and perform each of its
obligations under the Indenture and the Collateral Agreements. The Indenture
meets the requirements for qualification under the Trust Indenture Act of 1939,
as amended (the "TIA"). The Indenture and the Collateral Agreements have been
duly and validly authorized by the Company and each Subsidiary Guarantor party
thereto and, when executed and delivered by the Company, each such Subsidiary
Guarantor and each of the other parties thereto, will each constitute a valid
and legally binding agreement of the Company and the Subsidiary Guarantors,
enforceable against the Company and each Subsidiary Guarantor in accordance with
its respective terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.
(f) Each of the Subsidiary Guarantors has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under the
Guarantee, and when the Notes are duly executed, authenticated and delivered in
accordance with the Indenture and when delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will constitute the
valid and legally binding agreement of each Subsidiary Guarantor, enforceable in
accordance with its terms except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency (including all laws relating to fraudulent transfer),
reorganization, receivership, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles of
equity (whether applied by a court of law or equity) and the discretion of the
court before which any proceeding therefor may be brought.
(g) The Company 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 the
Company and when executed and delivered by the Company, will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally, and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal or state securities laws or
public policy considerations.
(h) The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Warrant Agreement. The Warrant
Agreement has been duly and validly authorized by the Company and, when executed
and delivered by the Company, will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors rights
generally and (ii) general principles of equity (whether applied by a court of
law or equity) and the discretion of the court before which any proceeding
therefor may be brought.
(i) The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Warrants. The Warrants have been
duly and validly authorized by the Company and, when executed by the Company and
countersigned by the Warrant Agent in accordance with the provisions of the
Warrant Agreement and when delivered to and paid for by the Initial Purchaser in
accordance with the terms of the Warrant Agreement and this Agreement, will have
been duly executed, issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.
(j) Upon the effectiveness of an amendment to the certificate of
incorporation of the Company increasing the number of authorized shares of
common stock, which the Company covenants to cause to become effective on or
prior to July 31, 2001, the Warrant Shares will have been duly reserved for
issuance by the Company and, when issued in accordance with the terms and
conditions contained in the Warrants and the Warrant Agreement, as applicable,
will be duly authorized, validly issued, fully paid and non-assessable, will
conform to the description thereof contained in the Final Offering Circular,
will not be subject to any preemptive or similar rights and will be free of any
Encumbrances.
(k) The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company. No consent, approval,
authorization or order of any court or governmental agency or body, or third
party (in each case, a "Consent") is required for the performance of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, except such other Consents as have been obtained and such
other Consents as may be required under the Act or state securities or "Blue
Sky" laws in connection with the purchase and resale of the Securities by the
Initial Purchaser. Neither the Company nor any Subsidiary 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 it or any of
its 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 breach of or 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 the Company or
any Subsidiary is a party or to which the Company or any Subsidiary or any of
their properties or assets are subject, except for any such breach, default,
violation or event which would not, individually or in the aggregate, have a
Material Adverse Effect.
(l) The execution, delivery and performance by the Company and its
Subsidiaries of each of the Transaction Documents and the consummation of the
transactions contemplated thereby, and the fulfillment of the terms thereof,
will not conflict with or constitute or result in a breach of or a default under
(or an event which with notice of passage of time or both would constitute a
breach of or default under) or violation of (i) any indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or to which the Company or any of its
Subsidiaries or any of their respective properties or assets is subject other
than any such breaches, defaults, violations or events 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 its Subsidiaries
(except for the amendment described in (j) above, which will be necessary prior
to the exercise of any Warrants), or (iii) assuming compliance with the Act and
all applicable state securities or "Blue Sky" laws, any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets other than any such
breaches, defaults, violations or events which would not, individually or in the
aggregate, have a Material Adverse Effect. There is no material contract or
other agreement of a character required to be described in the Offering Circular
which is not described therein.
(m) The audited consolidated financial statements and related notes of the
Company included in the Final Offering Circular present fairly in all material
respects the consolidated financial position, the results of operations and cash
flows of the Company and its Subsidiaries at of the dates and for the periods to
which they relate and have been prepared in conformity with generally accepted
accounting principles ("GAAP"), consistently applied, except as otherwise stated
therein. The unaudited consolidated financial statements and related notes and
schedules of the Company and its Subsidiaries included in the Final Offering
Circular present fairly the consolidated financial position, results of
operations and cash flows of the Company and its Subsidiaries at the dates and
for the periods to which they relate, subject to year-end audit adjustments, and
have been prepared on a basis consistent with the audited consolidated financial
statements of the Company and its Subsidiaries and in conformity with GAAP,
consistently applied. The summary and selected historical financial data in the
Final Offering Circular present fairly in all material respects the financial
information shown therein and have been prepared and compiled on a basis
consistent with the audited [and unaudited] financial statements included
therein, except as otherwise stated therein.
(n) The pro forma financial information (including the notes thereto)
included in the Final Offering Circular (x) have been prepared in accordance
with applicable requirements of Regulation S-X promulgated under the Exchange
Act, (y) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial information, and (z) have been
properly computed on the bases described therein. The estimates and assumptions
used by the Company in the preparation of the pro forma financial information
(including the notes thereto) included in the Final Offering Circular are
believed in good faith by the Company to be reasonable, the adjustments used
therein are appropriate to give effect to the transactions or circumstances
referred to therein, and the Company believes that such information is
reasonable and attainable based on the facts and circumstances existing on the
Closing Date and the assumptions stated therein.
(o) Xxxxxx Xxxxxxxx LLP, which firm has audited certain of such financial
statements as set forth in its reports included in the Final Offering Circular,
is an independent public accounting firm within the meaning of the Act.
(p) Except as described in the Final Offering Circular, there is not
pending or, to the best knowledge of the Company, threatened or contemplated
against the Company or any of its Subsidiaries, any action, suit, proceeding,
inquiry or investigation to which the Company or any Subsidiary of the Company
is a party, or to which any of the property or assets of the Company or any
Subsidiary of the Company are subject, before or brought by any court or
governmental agency or body (i) which, if determined adversely to the Company or
such Subsidiary, would have, individually or in the aggregate, a Material
Adverse Effect or which seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge the issuance or sale of the Units to be sold hereunder or
the consummation of any other transactions described in the Final Offering
Circular or contemplated by the Transaction Documents or (ii) which is required
to be disclosed in the Preliminary Offering Circular or the Final Offering
Circular.
(q) The Company and each of its Subsidiaries owns or possesses adequate
licenses or other rights to use all trademarks, service marks, trade names,
patents, trade secrets and know-how necessary to conduct the businesses as now
conducted or as proposed to be conducted as described in the Final Offering
Circular, and the consummation of the transactions contemplated hereby and by
each of the Transaction Documents will not alter or impair any of such rights.
No claims have been asserted, and the Company has not received any notice of
conflict with (or knows of any such conflict with) asserted rights of others
with respect to the use, validity or the effectiveness of any trademarks,
service marks, trade names, patents, trade secrets or know-how which, if such
claim or assertion of conflict were the subject of an unfavorable decision,
ruling or finding would, individually or in the aggregate, have a Material
Adverse Effect.
(r) The Company and each of its Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and foreign governmental authorities with jurisdiction, all self-regulatory
organizations and all courts and other tribunals, presently required or
necessary for the Company and each of its Subsidiaries to own or lease, as the
case may be, and to possess or operate its properties and to carry on its
business as now conducted or proposed to be conducted as set forth in the Final
Offering Circular, except where the failure to obtain such licenses, permits,
certificates, consents, orders, approvals and other authorizations, or to make
all declarations and filings (collectively, "Permits"), would not, individually
or in the aggregate, have a Material Adverse Effect; and the Company has
fulfilled and performed all of its obligations with respect to such Permits
except obligations which the failure to fulfill or perform would not have a
Material Adverse Effect, and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof, or results in
any material impairment of the rights of the holder of any such Permit; and
neither the Company nor any of its Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such Permit, except as
described in the Final Offering Circular or except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(s) Since the respective dates as of which information is given in the
Final Offering Circular, except as described therein or contemplated thereby,
(i) neither the Company nor any Subsidiary of the Company has incurred any
liabilities or obligations, direct or contingent, or entered into or agreed to
enter into any transactions or contracts (written or oral) not in the ordinary
course of business and (ii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock or otherwise.
(t) Each of the Company and its Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns that are required to
be filed and, when filed, all such returns were true, correct and complete,
except where the failure to so duly and timely file correct and complete returns
would not, individually or in the aggregate, have a Material Adverse Effect,
and, except as set forth in the Final Offering Circular, has paid all taxes,
assessments, fees and other charges (including, without limitation, withholding
taxes, penalties and interest) due or claimed to be due thereon that are due and
payable; other than tax deficiencies which (i) the Company or any Subsidiary of
the Company is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves in accordance with GAAP or (ii) the
failure to pay would not have a Material Adverse Effect. There is no tax
deficiency or actual or proposed tax assessment that has been asserted against
the Company or any Subsidiary of the Company that would have, individually or in
the aggregate, a Material Adverse Effect.
(u) None of the Company or any agent acting on its behalf has taken or will
take any action that could cause the transactions contemplated by this
Agreement, the Final Offering Circular or any of the Transaction Documents to,
and none of the execution, delivery and performance of this Agreement, the
application of the proceeds from the issuance and sale of the Units and the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents will, violate Section 7 of the Exchange Act or any
regulation promulgated thereunder, Regulation T, U or X promulgated by 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.
(v) The Company and its Subsidiaries have (a) good and marketable title to
all real property and other material assets (personal, tangible, intangible or
mixed) described in the Final Offering Circular as owned by them, and, good and
marketable title to all leasehold estates in the real and personal property
described in the Final Offering Circular as being leased by them, and such title
will be free and clear of all Liens, except Permitted Liens, with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and (b) peaceful and undisturbed possession
under all leases to which it is a party as lessee or sublessee, except for such
defects in title or lack of possession that, singly or in the aggregate, would
not have a Material Adverse Effect. Each of the Company and its Subsidiaries
operates all real and personal property leased by it under valid and enforceable
leases and has performed in all material respects the obligations required to be
performed by it with respect to each such lease except for such leases and
obligations which, in the aggregate, would not have a Material Adverse Effect.
As to leases with respect to which the Company or any of its Subsidiaries is the
lessor, the lessees and other parties under such leases are in compliance with
all material terms and conditions thereunder and such leases are in full force
and effect except for such leases which, if not in full force and effect, would
not, singly or in the aggregate, have Material Adverse Effect. All tangible
assets and properties of the Company and its Subsidiaries are in good working
order (subject to ordinary wear and tear) and are adequate for the uses to which
they are being put or would be put in the ordinary course of business except for
such assets and properties as are not material, individually or in the
aggregate, to the business, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
(w) There are no legal or governmental proceedings involving or affecting
the Company or any Subsidiary of the Company 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 Offering Circular, 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 Offering Circular.
(x) Except as described in the Final Offering Circular, there are no
consensual encumbrances or restrictions on the ability of any Subsidiary of the
Company (x) to pay dividends or make any other distributions on such
Subsidiary's capital stock or to pay any indebtedness owed to the Company or any
other Subsidiary of the Company, (y) to make any loans or advances to, or
investments in, the Company or any other Subsidiary of the Company or (z) to
transfer any of its property or assets to the Company or any other Subsidiary of
the Company.
(y) Except as stated in the Final Offering Circular, there are no
outstanding claims for services, either in the nature of a finder's fee,
financial advisory fee, origination fee or similar fee, with respect to the
transactions contemplated hereby and by the Transaction Documents.
(z) Except as described in the Final Offering Circular, each of the Company
and its Subsidiaries is in compliance in all respects with all existing and
applicable domestic and foreign laws, rules or regulations relating to pollution
or protection of public or employee health or the environment ("Environmental
Law") and with the terms and conditions of any Permit, issued to the Company or
its Subsidiaries thereunder in connection with the ownership, operation or use
of its business, property and assets, except where the failure to be in such
compliance would not, individually or in the aggregate, have a Material Adverse
Effect; except as disclosed in the Final Offering Circular, none of the Company
or its Subsidiaries is subject to any known liability, absolute or contingent,
under any Environmental Law except for any such liability which would not,
individually or in the aggregate, have a Material Adverse Effect; except as
disclosed in the Final Offering Circular, there is no civil, criminal or
administrative action, suit, demand, hearing, notice of violation or deficiency,
investigation, proceeding or notice of potential responsibility or demand letter
or request for information pending or, to the knowledge of the Company
threatened against the Company or any of its Subsidiaries under any
Environmental Law which, if determined adversely to the Company or any
Subsidiary of the Company would, individually or in the aggregate, result in a
Material Adverse Effect.
(aa) Each of the Company or its Subsidiaries carries insurance (including
self insurance) in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as shall be
customary for companies similarly situated within the industry of the Company.
(bb) (i) None of the Company or its Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing, 401(K) plan or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and (ii) the fair market value of the assets of any
such employee pension benefit plan equals or exceeds the present value of the
liabilities of such plan (as determined in accordance with the actuarial methods
and assumptions set forth in the latest actuarial report for such employee
pension benefit plan), in each case, to which the Company or any of its
Subsidiaries makes or ever has made a contribution and in which any employee of
the Company or any of its Subsidiaries makes or ever has made a contribution and
in which any employee of the Company or any of its Subsidiaries is or has ever
been a participant. With respect to such plans, the Company and each of its
Subsidiaries is in compliance in all material respects with all applicable
provisions of ERISA. The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby and by the
Transaction Documents will not involve any prohibited transaction (within the
meaning of Section 406 of ERISA). Neither the Company nor any of its
"Affiliates" is a "party in interest" or a "disqualified person" with respect to
any employee benefit plans. No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result in the
Company or any such "Affiliate" incurring any liability, fine or penalty that
singly or in the aggregate, would have a Material Adverse Effect. The terms
"employee benefit plan," "employee pension benefit plan," and "party in
interest" shall have the meanings assigned to such terms in Section 3 of ERISA,
the term "Affiliate" shall have the meaning assigned to such term in Section
407(d)(7) of ERISA, and the term "disqualified person" shall have the meaning
assigned to such term in section 4975 of the Internal Revenue Code of 1986, as
amended, or the rules, regulations and published interpretations promulgated
thereunder.
(cc) The Company is not and, after giving effect to the offering and sale
of the Units, the Company will not be an "investment company" or a company
"controlled by" 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.
(dd) Except as disclosed in the Final Offering Circular, no holder of
securities of the Company or any Subsidiary of the Company will be entitled to
have such securities registered under the registration statements required to be
filed by the Company pursuant to the Registration Rights Agreement.
(ee) As of the Closing Date and immediately after the consummation of the
transactions contemplated by this Agreement and by the Transaction Documents,
the fair value and current fair saleable value of the assets of the Company (on
a consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities. The Company (on a consolidated basis) is not,
after giving effect to the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby and by the
Transaction Documents, (a) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted as described in the
Final Offering Circular, (b) unable to pay its debts (contingent or otherwise)
as they mature or (c) otherwise insolvent.
(ff) Neither the Company nor any person acting on its behalf (other than
the Initial Purchaser, as to whom the Company makes no representation) has
offered or sold the Units by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as defined in
Rule 902 under the Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Act, and the Company, any affiliate of the Company
and any person acting on its or their behalf (other than the Initial Purchaser,
as to whom the Company makes no representation) have complied with and will
implement the "offering restrictions" within the meaning of such Rule 902.
(gg) Except as disclosed in the Final Offering Circular, neither the
Company nor any other person acting on behalf of the Company (other than the
Initial Purchaser, as to whom the Company makes no representation) has solicited
offers to buy or offered or sold or otherwise negotiated in respect of any
security (as defined in the Act) that is or could be integrated with the sale of
the Units in a manner that would require the registration under the Act of any
of the Securities; and the Company will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the United States or to
any U.S. person (as defined in Rule 902 under the Act) of any Securities or any
substantially similar security issued by the Company, within six months
subsequent to the date on which the distribution of the Units has been
completed, is made under restrictions and other circumstances reasonably
designed not to affect the status of the offer and sale of the Units in the
United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration requirements of the Act;
(hh) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes.
(ii) Assuming the accuracy of and compliance with the representations and
warranties of the Initial Purchaser in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Units to the Initial
Purchaser in the manner contemplated by this Agreement to register any of the
Securities under the Act or to qualify the Indenture under the TIA.
(jj) No other securities of the Company are of the same class (within the
meaning of Rule 144A under the Act) as the Securities (other than the Warrants
and the Warrant Shares) 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.
(kk) None of the Company or its Subsidiaries has taken, nor will any of
them 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.
(ll) Upon (i) execution and delivery of the Collateral Agreements by the
Company, the Subsidiary Guarantors parties thereto and the Trustee, (ii) the
execution and filing of all appropriate forms as required under the Uniform
Commercial Code and (iii) in the case of the Pledged Securities pledged to the
Trustee, the delivery to and possession by the Trustee of such Pledged
Securities, duly endorsed for transfer in accordance with Article 8 of the
Uniform Commercial Code, the Collateral Agreements will create and constitute a
valid and enforceable first priority pledge of and perfected security interest
in the Collateral.
(mm) Neither the Company nor any of its Subsidiaries is a "holding company"
or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(nn) Except as described in the Final Offering Circular, (i) neither the
Company nor any of its Subsidiaries is engaged in any unfair labor practice,
(ii) there is no unfair labor practice complaint or other proceeding pending or,
to the best knowledge of the Company, threatened against the Company or any of
its subsidiaries before the National Labor Relations Board or any state, local
or foreign labor relations board or any industrial tribunal, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending or threatened, that would, singly or in the aggregate,
have a Material Adverse Effect, (iii) no strike, labor dispute, slowdown or
stoppage is pending or, to the best knowledge of the Company, threatened against
the Company or any of its Subsidiaries, and (iv) no union representation
question existing with respect to the employees of the Company or any of its
Subsidiaries, and, to the best of the Company's knowledge, no union organizing
activities are taking place that could, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(oo) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) material transactions are
executed in accordance with management's general or specific authorization, (ii)
material transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, and to maintain asset
accountability, and (iii) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any material differences.
(pp) The Securities and each of the Transaction Documents conform in all
material respect to the descriptions thereof in the Final Offering Circular.
3. Purchase, Sale and Delivery of the Units. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, 140,000 Units at a purchase price of 91.75% of the
principal amount of Notes being issued and sold. A provison for a fee has not
been included, as the parties are in dispute as to the same One or more
certificates in definitive form for the Units that the Initial Purchaser has
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchaser requests upon notice
to the Company at least 24 hours prior to the Closing Date, shall be delivered
by or on behalf of the Company to the Initial Purchaser, against payment by or
on behalf of the Initial Purchaser of the purchase price for the Units. Such
delivery of and payment for the Units shall be made at the offices of Xxxxx,
Brown & Xxxxx at 10:00 a.m., New York City time, on June 19, 2001, or at such
other place, time or date as the Initial Purchaser, on the one hand, and the
Company, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date". With respect to
Securities to be delivered in definitive certificated form, the Company will
make certificates for such Securities available for checking and packaging by
the Initial Purchaser at the offices of Xxxxxxxxx & Company, Inc. in New York,
New York, or at such other place as the Initial Purchaser may designate, on the
business day next preceding the Closing Date. Securities to be represented by
one or more definitive global Securities in book-entry form will be deposited on
the Closing Date, by or on behalf of the Company, with The Depository Trust
Company ("DTC") or its designated custodian, and registered in the name of Cede
& Co.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes to
make an offering of the Units at the price and upon the terms set forth in the
Final Offering Circular, as soon as practicable after this Agreement is entered
into and as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with the
Initial Purchaser that:
(a) The Company shall not make any amendment or supplement to the Final
Offering Circular of which the Initial Purchaser shall not previously have been
advised and furnished a copy for a reasonable period of time prior to the
proposed amendment or supplement and as to which the Initial Purchaser shall not
have given its consent. The Company shall promptly, upon the reasonable request
of the Initial Purchaser, make any amendments or supplements to the Preliminary
Offering Circular or the Final Offering Circular that may be necessary or
advisable in connection with the resale of the Securities by the Initial
Purchaser.
(b) The Company shall use its best efforts, in cooperation with the Initial
Purchaser, to arrange for the qualification of the Units for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchaser may designate and shall continue such qualifications in effect for as
long as may be necessary to complete the resale of the Securities.
(c) If, at any time prior to the completion of the initial resale of the
Units by the Initial Purchaser to persons other than affiliates of the Initial
Purchaser (as determined by the Initial Purchaser), any event occurs as a result
of which the Final Offering Circular as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Final Offering Circular to
comply with applicable law, the Company will promptly notify the Initial
Purchaser thereof and will prepare, at the expense of the Company, an amendment
or supplement to the Final Offering Circular that corrects such statement or
omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial Purchaser and
to counsel for the Initial Purchaser as many copies of the Final Offering
Circular or any amendment or supplement thereto as the Initial Purchaser or such
counsel may reasonably request.
(e) For so long as any of the Securities remain outstanding, the Company
will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee,
the Warrant Agent 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.
(f) Except as described in the Final Offering Circular, none of the Company
or any of its affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the Act) which
could be integrated with the sale of the Units in a manner which would require
the registration of the Units under the Act.
(g) The Company will not solicit any offer to buy or offer to sell the
Units by means of 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.
(h) For so long as any of the Securities remain outstanding, the Company
will make available, upon request, to any seller or prospective purchaser of
such Securities, the information specified in Rule 144A(d)(4) under the Act,
unless the Company is then subject to Section 13 or 15(d) of the Exchange Act.
(i) The Company will use its best efforts to (i) permit the Notes to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the Private Offering, Resales and
Trading through Automated Linkages market (the "PORTAL Market") and (ii) permit
the Notes to be eligible under Rule 144A for clearance and settlement through
DTC.
(j) The Company will use its best efforts to cause each person or entity
who has entered into a Lock-up Agreement (as herein defined) to comply
therewith, will not grant any waivers or consents to noncompliance therewith and
will enforce its rights under each such agreement, in each case unless and to
the extent that it shall have obtained the Initial Purchaser's prior written
consent, which consent shall not be unreasonably withheld.
(k) During the two year period after the Closing Date (or such shorter
period as may be provided for in Rule 144(k) under the Act, as the same may be
in effect from time to time), the Company will not, and will not permit any of
its Subsidiaries or other affiliates (as defined in Rule 144A under the Act)
controlled by it to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been acquired by any of them, except
pursuant to an effective registration statement under the Act or any exemption
from the Act.
(l) The Company shall pay all stamp, documentary and transfer taxes and
other duties, if any, which may be imposed by the United States or any political
subdivision thereof or taxing authority thereof or therein with respect to the
issuance of any of the Securities. (m) For so long as the Initial Purchaser
shall hold any Securities, the Company shall notify the Initial Purchaser
promptly in writing if the Company or any of its "Affiliates" becomes a "party
in interest" or a "disqualified person" with respect to any "employee benefit
plan." The terms "Affiliates," "party in interest," "disqualified person" and
"employee benefit plan" shall have the meanings as set forth in Section 2(aa)
hereof.
(n) The Company will cooperate with the Initial Purchaser and with its
counsel in connection with the qualification of the Units for offering and sale
by the Initial Purchaser and by dealers under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchaser may designate and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such qualification, provided that in no event shall the Company
be obligated to qualify to do business or qualify as a broker-dealer in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits or to taxation in any jurisdiction
where it is not now so qualified or subject.
(o) The Company agrees to use its best efforts to comply with all of the
terms and conditions of the Registration Rights Agreement, and all agreements
set forth in the representation letter of the Company to DTC relating to the
approval of the Units by DTC for "book entry" transfer.
(p) Except as stated in this Agreement, the Company has not taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Units to facilitate the sale or resale of the Units.
(q) The Company agrees not to sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the sale by the Company to the Initial
Purchaser or by the Initial Purchaser to purchasers of the Securities.
6. Expenses. The Company agrees to pay all costs and expenses incident to
the performance of its obligations under this Agreement and the other
Transaction Documents, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses related or incident to (i) the printing, word
processing or other production of documents with respect to the transactions
contemplated hereby, including any costs of preparing and printing the
Preliminary Offering Circular and the Final Offering Circular and any amendment
or supplement thereto, (ii) all arrangements relating to the delivery to the
Initial Purchaser 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, issuance and delivery to the
Initial Purchaser of the Securities, (v) the qualification for the Securities
under state securities and "Blue Sky" laws, including filing fees and fees and
disbursements of counsel incurred by the Initial Purchaser relating thereto,
(vi) the fees, disbursements and out-of-pocket expenses incurred by the Initial
Purchaser in connection with its services to be rendered under this Agreement,
including, without limitation, the reasonable fees, disbursements and charges of
Xxxxx, Brown & Xxxxx, counsel to the Initial Purchaser, incurred in connection
with the transactions contemplated hereby and the Transaction Documents, travel
and lodging expenses, word processing charges, messenger and duplicating
services, facsimile expenses and other customary expenditures, including
printing expenses, if any, all of which fees, disbursements and out-of-pocket
expenses, shall be paid in cash, (vii) expenses in connection with any meetings
with prospective investors in the Securities, (viii) fees and expenses of the
Trustee, the Warrant Agent and the transfer agent and registrar for the Common
Stock including fees and expenses of their respective counsel incurred by any of
them, (ix) all expenses and listing fees incurred in connection with the
application for quotation of the Securities on the PORTAL Market, and (x) any
fees charged by investment rating agencies for the rating of any of the
Securities. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Initial Purchaser set forth in
Section 7 hereof is not satisfied, because this Agreement is terminated or
because of any failure, refusal or inability on the part of the Company to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than in each such case solely by reason of a
default by the Initial Purchaser on its obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith, the Company
agrees to promptly reimburse the Initial Purchaser in cash upon demand for all
disbursements and out-of-pocket expenses (including reasonable fees and
disbursements of Xxxxx, Brown & Xxxxx, counsel for the Initial Purchaser) that
shall have been incurred by the Initial Purchaser in connection with the
proposed purchase and sale of the Securities.
7. Conditions of the Initial Purchaser's Obligations. The obligation of the
Initial Purchaser to purchase and pay for the Units shall be subject to the
satisfaction or waiver of the following conditions on or prior to the Closing
Date:
(a) On the Closing Date, the Initial Purchaser shall have received an
opinion, dated as of the Closing Date and addressed to the Initial Purchaser, of
Ruskin, Moscou, Xxxxx & Xxxxxxxxxx, P.C., counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchaser, substantially to
the effect that:
(i) Each of the Company and its Subsidiaries is duly incorporated, validly
existing and in good standing as a corporation under the laws of its
jurisdiction of incorporation, with all requisite corporate power and
authority to own its properties and conduct its business as now conducted,
and as described in the Final Offering Circular, except (A) where the
failure to do so will not have a Material Adverse Effect; and (B) with
respect to the need for Einstein Acquisition Corp. to become qualified in
each jurisdiction in which Einstein/Noah Bagel Corp. and Xxxxxxxx/Noah
Bagel Partners, L.P. conducted business prior to the date hereof.
(ii) Except as set forth in the Final Offering Circular, to such counsel's
knowledge, (A) no options, warrants or other rights to purchase from the
Company any Equity Interests in the Company are outstanding, (B) no
agreements, contracts, arrangements or other obligations of the Company to
issue, or other rights granted by the Company to cause the Company to
convert, any obligation into, or exchange any securities for, any Equity
Interests in the Company are outstanding and (C) the Company is not
obligated to have any of its securities registered under a registration
statement filed by the Company under the Act with respect to any of the
Securities pursuant to the Registration Rights Agreement, except that the
holders of the Series F Preferred Stock will have the right to request
inclusion in the shelf registration rights relating to the Warrants.
(iii)The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Notes, the Warrants and the
Transaction Documents. Each Subsidiary Guarantor has all requisite
corporate power and authority to execute, deliver and perform its
obligations under its Guarantee and the Indenture.
(iv) The Notes have been duly and validly authorized and executed by the Company
and, (A) when duly authenticated by the Trustee in accordance with the
Indenture and when delivered by the Company and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Notes will
constitute the valid and legally binding obligations of the Company and
each of the Subsidiary Guarantors, enforceable in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency (including all laws relating to fraudulent
transfer), reorganization, receivership, moratorium, or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding therefor may be
brought; and (B) the holders of the Notes will be entitled to the benefits
of the Indenture.
(v) The Guarantees have been duly and validly authorized and executed by each
Subsidiary Guarantor, and when the Notes are duly authenticated and
delivered in accordance with the Indenture and when delivered to and paid
for by the Initial Purchaser in accordance with the terms of this
Agreement, will constitute the valid and legally binding agreement of each
Subsidiary Guarantor, enforceable in accordance with its terms except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency
(including all laws relating to fraudulent transfer), reorganization,
receivership, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (whether applied by a court of law or equity) and the discretion of
the court before which any proceeding therefor may be brought.
(vi) The Exchange Notes and the Private Exchange Notes have been duly and
validly authorized by the Company, (A) and when the Exchange Notes and the
Private Exchange Notes have been duly executed and delivered by the Company
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 each of the Subsidiary Guarantors,
enforceable in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency (including all laws
relating to fraudulent transfer), reorganization, receivership, moratorium,
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (whether applied by
a court of law or equity) and the discretion of the court before which any
proceeding therefor may be brought; and (B) the holders of the Exchange
Notes and Private Exchange Notes will be entitled to the benefits of the
Indenture.
(vii)The Indenture is in sufficient form for qualification under the TIA. The
Indenture has been duly and validly authorized, executed and delivered by
the Company and each of the Subsidiary Guarantors, and, assuming due
authorization, execution and delivery by the Trustee, constitutes a valid
and legally binding obligation of the Company and the Subsidiary
Guarantors, enforceable against the Company and the Subsidiary Guarantors
in accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, receivership, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.
(viii) The Registration Rights Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, receivership, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (whether applied by a court
of law or equity) and discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal or state securities laws or public
policy considerations.
(ix) The Warrant Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency (including all laws relating to fraudulent
transfer), reorganization, receivership, moratorium, or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding therefor may be
brought.
(x) The Warrants have been duly and validly authorized and executed by the
Company and, when duly countersigned by the Warrant Agent in accordance
with the Warrant Agreement and delivered and paid for by the Initial
Purchaser, will have been duly issued and delivered and will constitute
valid and legally binding obligations of the Company, entitled to the
benefits of the Warrant Agreement, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, receivership, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (whether applied by a court
of law or equity) and the discretion of the court before which any
proceeding therefor may be brought, provided the holders of the company's
warrants, other than the Warrants, have agreed not to exercise such
warrants until there is an amendment to the Certificate of Incorporation to
increase the authorized common stock of the Company.
(xi) When issued in accordance with the terms and conditions contained in the
Warrant Agreement, upon exercise of the Warrants, the Warrant Shares will
be duly authorized, validly issued, fully paid and non-assessable and will
not be subject to any preemptive or similar rights, provided the holders of
the company's warrants, other than the Warrants, have agreed not to
exercise such warrants until there is an amendment to the Certificate of
Incorporation to increase the authorized common stock of the Company.
(xii)This Agreement has been duly and validly authorized, executed and
delivered by the Company. This Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except that (A) the enforcement thereof may be subject to
(i) bankruptcy, insolvency (including all laws relating to fraudulent
transfer), reorganization, receivership, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (whether applied by a court of law or equity)
and discretion of the court before which any proceeding therefor may be
brought and (B) any rights to indemnity or contribution thereunder may be
limited by federal or state securities laws or public policy
considerations.
(xiii) The statements set forth in the Final Offering Circular under the
captions "Description of Units", Description of Notes", "Description of
Warrants" and "Description of Capital Stock", insofar as such statements
purport to constitute a summary of the legal matters and documents referred
to therein, fairly summarize in all material respects the legal matters and
documents referred to therein.
(xiv)To the knowledge of such counsel and except as set forth in the Final
Offering Circular, no legal or governmental actions, suits or proceedings
are pending or threatened to which the Company or any of its Subsidiaries
is a party or to which the property or assets of the Company or any
Subsidiary of the Company is subject which, if determined adversely to the
Company or such Subsidiary, would result, individually or in the aggregate,
in a Material Adverse Effect, or which seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other
transactions described in the Final Offering Circular.
(xv) Except as set forth in the Final Offering Circular, the execution and
delivery of this Agreement and each of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Units to the
Initial Purchaser) will not conflict with or constitute or result in a
material breach or violation of or a default under (or an event which with
notice or passage of time or both would constitute a material default
under) (i) any of the terms or provisions of (A) any indenture, mortgage,
deed of trust, loan agreement, note, or (B) any material lease, license,
franchise agreement, Permit, certificate, contract or other agreement or
instrument to which the Company or any Subsidiary of the Company is a
party, except, with respect to each of clauses (A) and (B) hereof, 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 (iii) any
existing applicable Federal, New York or Delaware statute, law, rule or
regulation, which are normally applicable to corporations such as the
Company (other than the securities or blue sky laws of the various states,
as to which, in each case, such counsel need express no opinion), or any
judgment, order or decree of any court, governmental agency or body or
arbitrator applicable to the Company, its Subsidiaries or any of their
respective properties or assets, except for any such conflict, breach,
violation, default or event would not, individually or in the aggregate,
have a Material Adverse Effect.
(xvi)To the knowledge of such counsel, no consent, approval, authorization or
order of any domestic governmental authority is required for the issuance
and sale by the Company of the Units to the Initial Purchaser or the other
transactions contemplated hereby or by the Transaction Documents, except
such as have previously been obtained and such as may be required under
applicable state securities or Blue Sky laws, as to which such counsel need
express no opinion pursuant to this clause (xvi).
(xvii) Based upon the representations, warranties and agreements of the Company
in Sections 1 and 5 of this Agreement and of the Initial Purchaser in
Section 8 of this Agreement, it is not necessary in connection with the
offer, sale and delivery of the Units to the Initial Purchaser under this
Agreement or in connection with the initial resale of such Units by the
Initial Purchaser in accordance with Section 4 of this Agreement to
register the Units under the Securities Act, it being understood that no
opinion is expressed as to any subsequent resale of any Unit. 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.
(xviii) Neither the consummation of the transactions contemplated by this
Agreement or any of the Transaction Documents nor the sale, issuance,
execution or delivery of the Units will violate Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System.
(xix)The provisions of the Pledge and Security Agreement are effective to
create a legal, valid and enforceable security interest in all right, title
and interest of the Issuer in and to the Collateral (as defined in the
Pledge and Security Agreement), in favor of the Collateral Agent, for the
benefit of the Secured Parties (as defined in the Pledge and Security
Agreement), as security for the payment of the Obligations.
(xx) When each Grantor (as defined in the Pledge and Security Agreement)
delivers to the Collateral Agent in the State of New York (for the benefit
of the Secured Parties) the certificated Securities described in a schedule
to the Pledge and Security Agreement (together with duly authorized and
executed stock powers or other instruments of transfer executed in blank)
(collectively, the Pledged Collateral), and, assuming (A) continued
possession of the Pledged Collateral by the Collateral Agent in the State
of New York and (B) that the Collateral Agent does not have notice prior to
or on the date of the delivery of such Pledged Collateral of any "adverse
claim" within the meaning of the Uniform Commercial Code, as in effect in
the State of New York (the "N.Y. UCC"), the Collateral Agent will be a
"protected purchaser" as defined in Section 8-303(a) of the N.Y. UCC.
(xxi)The UCC-1 Financing Statements described in a schedule to such opinion are
in appropriate form and, when duly filed in each of the States and with the
filing offices identified in such opinion, will result in the perfection of
all security interests in all Collateral which can be perfected under the
Uniform Commercial Code, as in effect in such State, by the filing of a
financing statement in such State. No further action will be required in
order to perfect such security interests and to preserve, protect and
continue such perfection, except for the filing of continuation statements
with respect to the UCC-1 Financing Statements within six months prior to
each five-year anniversary of the filing of the related UCC-1 Financing
Statement.
(xxii) No mortgage, recording, registration, stamp or other similar tax or fee
will be due upon the execution, delivery, recordation, filing or
performance, as the case may be, of any UCC-1 Financing Statements or the
Pledge and Security Agreement, except nominal filing fees in respect of the
UCC-1 Financing Statements provided, however, such taxes and/or fees may be
required by jurisdictions other than the State of New York.
Such counsel shall also state that it has reviewed and participated in
discussions concerning the preparation of the Final Offering Circular with
certain officers or employees of the Company, with its counsel and its auditors,
and with representatives of the Initial Purchaser and its counsel. The
limitations inherent in the independent verification of factual matters and in
the role of outside counsel are such, however, that such counsel will not assume
any responsibility for the accuracy, completeness or fairness of any of the
statements made in the Final Offering Circular except as set forth in
subparagraph (xiii) of this Section 7(a). Such counsel shall advise the Initial
Purchaser that, subject to the limitations set forth above, on the basis of the
information such counsel gained in the course of performing the services
referred to above, (i) no facts came to such counsel's attention which gave such
counsel reason to believe that the Final Offering Circular (other than the
financial statements and related notes thereto and the other financial,
statistical, and other accounting data contained in the Final Offering Circular
or omitted therefrom, as to which such counsel expresses no view), as of its
date or the Closing Date, contained or contains an 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. In rendering such opinion, such counsel may (i) rely with
respect to matters of fact upon the representations and warranties of the
Company and its Subsidiaries set forth herein, upon certificates of officers of
the Company and its Subsidiaries and upon information obtained from public
officials, (ii) assume that all documents submitted to such counsel as originals
are authentic, that all copies submitted to such counsel conform to the
originals thereof, and that the signatures on all documents examined by such
counsel are genuine, (iii) state that such counsel's opinion is limited to the
federal law of the United States and the laws of the State of New York and the
General Corporation Law of the State of Delaware (provided, however, that with
respect to any matters concerning the Uniform Commercial Code as adopted and
currently in effect in the States identified in Item B of Schedule I hereto with
an asterisk next to the name of each such State (the "Other UCC"), as in effect
on the date hereof, in such States (the "Other States") involved in the opinions
set forth in clauses (xxii) and (xxiii) above, we (A) draw your attention to the
fact that we are not admitted to practice law in the Other States; (B) are not
experts in the laws of such jurisdiction and our opinions relating to the filing
of UCC-1 Financing Statements in such Other States are based solely upon our
review of standard, publicly available compilations published by CCH, and (C)
have assumed that all information as to perfection and filing locations, and the
creation and enforceability of a security interest in collateral covered by
Articles 8 and 9 of the Other UCC is correct and complete; provided further,
that with your permission, we have not reviewed any judicial decisions of courts
sitting in the Other States or, except for those contained in such standard
compilations, any rules, regulations, guidelines, releases or interpretations
concerning the Other UCC), and (iv) may make such other assumptions and
qualifications as may be reasonably acceptable to the Initial Purchaser and its
counsel. The opinion of Xxxxxx, Moscou, Xxxxx & Xxxxxxxxxx, P.C. described in
this subsection (a) shall be rendered at the request of the Company to, and may
be relied upon solely by, the Initial Purchaser and shall so state therein.
References to the Final Offering Circular in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchaser shall have received the
opinion, in form and substance satisfactory to the Initial Purchaser, dated as
of the Closing Date and addressed to the Initial Purchaser, of Xxxxx, Brown &
Xxxxx, counsel for the Initial Purchaser, with respect to certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchaser may require. In rendering such opinion, Xxxxx, Xxxxx & Xxxxx shall
have received and may rely upon such certificates and other documents and
information as it may reasonably request to pass upon such matters.
(c) The Initial Purchaser shall have received from the Independent
Accountant a comfort letters dated the date hereof and the Closing Date, in form
and substance satisfactory to the Initial Purchaser.
(d) The representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and on and as of the Closing Date as if made on and as of the
Closing Date (except for the representations and warranties which were true and
correct as of a certain specified date which shall continue to be true and
correct as of such date). The statements of the Company's officers made pursuant
to any certificate delivered in accordance with the provisions hereof shall be
true and correct in all material respects on and as of the date made and on and
as of the Closing Date. The Company shall have complied in all material respects
with all agreements and satisfied all conditions to be performed or satisfied
hereunder at or prior to the Closing Date. Except as described in the Final
Offering Circular (exclusive of any amendment or supplement thereto after the
date hereof), subsequent to the date of the most recent financial statements in
such Final Offering Circular, there shall have been no development that, singly
or in the aggregate, is reasonably likely to have a Material Adverse Effect.
(e) The sale of the Units hereunder shall not be enjoined (temporarily or
permanently) on the Closing Date, and no injunction or order shall have been
issued that either (i) asserts that any of the transactions contemplated by this
Agreement or the Transaction Documents is subject to the registration
requirements of the Act or (ii) would prevent or suspend the issuance or sale of
the Units or the use of the Preliminary Offering Circular, the Final Offering
Circular or any amendment or supplement thereto in any jurisdiction.
(f) Subsequent to the date of the most recent financial statements in the
Final Offering Circular (exclusive of any amendment or supplement thereto after
the date hereof), other than as described in such Final Offering Circular or
contemplated hereby or thereby, neither the Company nor any Subsidiary of the
Company shall have incurred any liabilities or obligations, direct or contingent
not in the ordinary course of business that are material to the Company and its
Subsidiaries, taken as a whole, or entered into any transactions not in the
ordinary course of business that are material to the business, condition
(financial or otherwise) or results of operations or prospects of the Company,
taken as a whole, and there shall not have been any adverse change in the
capital stock or long-term indebtedness of the Company or any Subsidiary of the
Company that is material to the business, condition (financial or otherwise) or
results of operations or prospects of the Company and its Subsidiaries, taken as
a whole.
(g) Subsequent to the date of the most recent financial statements in the
Final Offering Circular and except as stated therein (exclusive of any amendment
or supplement thereto after the date hereof), the conduct of the business and
operations of the Company shall not have been interfered with by strike, fire,
flood, hurricane, accident or other calamity (whether or not insured) or by any
court or governmental action, order or decree, and the properties of the Company
shall not have sustained any loss or damage (whether or not insured) as a result
of any such occurrence, except any such interference, loss or damage which would
not, individually or in the aggregate, have a Material Adverse Effect.
(h) The Initial Purchaser shall have received certificates of the Company,
dated the Closing Date, signed on behalf of the Company by the Chairman of the
Board, President or Chief Executive Officer and their Chief Financial Officer,
to the effect that:
(i) the representations and warranties of the Company and its Subsidiaries
contained in this Agreement are true and correct in all material respects
as of the date hereof and as of the Closing Date (except for the
representations and warranties which were true and correct as of a certain
specified date which shall continue to be true and correct as of such
date), and the Company and its Subsidiaries have performed all covenants
and agreements and satisfied hereunder all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) at the Closing Date, since the date hereof or since the date of the most
recent financial statements in the Final Offering Circular (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 the aggregate, would have a Material
Adverse Effect;
(iii)since the date hereof or since the date of the most recent financial
statements in the Final Offering Circular (exclusive of any amendment or
supplement thereto after the date hereof), other than as described in the
Final Offering Circular or contemplated hereby, neither the Company nor any
Subsidiary of the Company has incurred any liabilities or obligations,
direct or contingent, not in the ordinary course of business, that are
material to the Company and its Subsidiaries, taken as a whole, or entered
into any transactions not in the ordinary course of business that are
material to the business, condition (financial or otherwise) or results of
operations or prospects of the Company and its Subsidiaries, taken as a
whole, and there has not been any change in the capital stock or long-term
indebtedness of the Company or any Subsidiary of the Company that is
material to the business, condition (financial or otherwise) or results of
operations or prospects of the Company and its Subsidiaries, taken as a
whole; and
(iv) the sale of the Units hereunder has not been enjoined (temporarily or
permanently).
(i) On the Closing Date, the Initial Purchaser shall have received the
Registration Rights Agreement and the Warrant Agreement executed by the Company
and such agreements shall be in full force and effect at all times from and
after the Closing Date.
(j) The directors and executive officers of the Company who are holders of
outstanding shares of or securities exercisable or exchangeable for or
convertible into shares of capital stock of the Company and the holders of the
Company's Series F Preferred Stock shall have entered into a written agreement
with the Initial Purchaser in the form of Exhibit B hereto (each such agreement,
a "Lock-up Agreement"), and executed originals of each Lock-up Agreement shall
have been delivered to the Initial Purchaser.
(k) The Company and New World EnbcDeb Corp. shall have consummated the
Einstein Debenture Financing and the Company shall have received gross proceeds
of at least $33 million pursuant thereto.
(l) The Company shall have received aggregate gross proceeds of at least
$25 million from the issuance of new Series F Preferred Stock since June 1,
2001.
(m) On the Closing Date or promptly thereafter, the Company will pay or
cause to be paid in cash the reasonable fees and expenses of (i) Xxxxxx, Moscou,
Xxxxx & Xxxxxxxxxx, P.C., counsel to the Company, (ii) Xxxxx, Xxxxx & Xxxxx,
counsel to the Initial Purchaser, and (iii) Winston & Xxxxxx, counsel to the
Trustee.
On or before the Closing Date, the Initial Purchaser and counsel for the
Initial Purchaser shall each have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and its Subsidiaries as
they shall have heretofore reasonably requested from the Company and its
Subsidiaries.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provision
hereof only if they are reasonably satisfactory in all respects to the Initial
Purchaser and counsel for the Initial Purchaser. The Company shall furnish to
the Initial Purchaser such conformed copies of such documents, opinions,
certificates, letters, schedules and instruments in such quantities as the
Initial Purchaser shall reasonably request.
8. Representations and Warranties by the Initial Purchaser. The Initial
Purchaser represents and warrants (as to itself only) that it is a QIB with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Units. The
Initial Purchaser agrees with the Company (as to itself only) that (a) it has
not and will not solicit offers for, or offer or sell, the Units 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 the rules and regulations promulgated
thereunder, and (b) it has and will solicit offers for the Units only from, and
will offer and sell the Units only to (A) in the case of offers inside the
United States, (i) persons whom the Initial Purchaser reasonably believes to be
QIBs or, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to the Initial Purchaser that each such account is a QIB, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A, and, in each case, in transactions under Rule 144A or (ii) a limited
number of other institutional investors reasonably believed by the Initial
Purchaser to be Accredited Investors that, prior to their purchase of the
Securities, deliver to the Initial Purchaser a letter containing the
representations and agreements set forth in Exhibit C to the Final Offering
Circular and (B) in the case of offers outside the United States, persons other
than U.S. persons ("foreign purchaser"), 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 Units, such
persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Offering Circular. The Initial
Purchaser acknowledges and agrees that it will not offer, sell or deliver any
Units in any jurisdiction outside of the United States, its territories or
possessions except under circumstances that will result in compliance with the
provisions of Regulation S under the Act and the applicable laws of such
jurisdiction.
9. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless the Initial Purchaser, and each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against any losses, claims, damages or liabilities of any
kind to which the Initial Purchaser or such 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 any Offering Circular or any amendment or supplement
thereto;
(ii) the omission or alleged omission to state, in any Offering Circular or
any amendment or supplement thereto, a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(iii)any breach by the Company or any of its Subsidiaries of their
respective representations, warranties and agreements set forth
herein; or
(iv) any financial projections of the Company issued, published or
disclosed prior to the date hereof.
and, subject to the provisions hereof, will reimburse, as incurred, the Initial
Purchaser and each such controlling person for any legal or other expenses
reasonably incurred by the Initial Purchaser 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 in
respect thereof; provided, however, the Company will not be liable in any such
case to the extent (but only to the extent) that any such loss, claim, damage or
liability is finally judicially determined by a court of competent jurisdiction
in a final, unappealable judgment, to have resulted primarily from any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Offering Circular or any amendment or supplement thereto in reliance upon
and in conformity with written information concerning the Initial Purchaser
furnished to the Company by the Initial Purchaser specifically for use therein.
This indemnity agreement will be in addition to any liability that the Company
may otherwise have to the indemnified parties. The Company shall not be liable
under this Section 9 for any settlement of any claim or action effected without
its prior written consent, which shall not be unreasonably withheld; and
provided further, however, that this indemnity, as to the Preliminary Offering
Circular, shall not inure to the benefit of the Initial Purchaser (or any person
controlling such Initial Purchaser) on account of any loss, claim, damage or
liability arising from the sale of Units to any person by such Initial Purchaser
if such Initial Purchaser failed to send or give a copy of the Final Offering
Circular (as the same may be supplemented or amended) to such person at or prior
to the written confirmation of the sale of the Units to such person, and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact in such Preliminary Offering Circular was corrected in the Final
Offering Circular, unless such failure resulted from noncompliance by the
Company with Section 5(c).
(b) The Initial Purchaser agrees to indemnify and hold harmless each of the
Company, its directors, officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer 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) are finally judicially
determined by a court of competent jurisdiction in a final, unappealable
judgment, to have resulted solely from (i) any untrue statement or alleged
untrue statement of any material fact contained in any Offering Circular or any
amendment or supplement thereto, (ii) the omission or the alleged omission to
state therein a material fact required to be stated in any Offering Circular or
any amendment or supplement thereto 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 the 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 incurred by the Company or any such director, officer or
controlling person in connection with any such loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to any
liability that the Initial Purchaser may otherwise have to the indemnified
parties.
(c) As promptly as reasonably practical 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 such indemnifying party from any liability under
paragraph (a) or (b) above unless and only to the extent it is materially
prejudiced as a result thereof and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may determine,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties at the expense of the indemnifying party. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchaser in the case of paragraph (a) of this Section
9 or the Company in the case of paragraph (b) of this Section 9, representing
the indemnified parties under such paragraph (a) or paragraph (b), as the case
may be, who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the prior written consent of the indemnifying
party (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) No indemnifying party shall be liable under this Section 9 for any
settlement of any claim or action (or threatened claim or action) effected
without its written consent, which shall not be unreasonably withheld, but if a
claim or action settled with its written consent, or if there be a final
judgment for the plaintiff with respect to any such claim or action, each
indemnifying party jointly and severally agrees, subject to the exceptions and
limitations set forth above, to indemnify and hold harmless each indemnified
party from and against any and all losses, claims, damages or liabilities (and
legal and other expenses as set forth above) incurred by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending or threatened
proceeding in respect of which the indemnified party is or could have been a
party, or indemnity could have been sought hereunder by the indemnified party,
unless such settlement (A) includes an unconditional written release of the
indemnified party, in form and substance satisfactory to the indemnified party,
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 indemnified party.
(e) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs 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 contributions, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Units or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Company on the one hand and the Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the Units
Offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Initial Purchaser. The relative fault
of the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand, or the Initial Purchaser on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or alleged statement or omissions, and any
other equitable considerations appropriate in the circumstances.
(f) The Company and the Initial Purchaser agree that it would not be
equitable if the amount of such contribution determined pursuant to the
immediately preceding paragraph (e) 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 the
immediately preceding paragraph (e). Notwithstanding any other provision of this
Section 9, the Initial Purchaser shall not be obligated to make contributions
hereunder that in the aggregate exceed the total discounts, commissions and
other compensation received by 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. 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 the immediately preceding
paragraph (e), each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Initial Purchaser, and each director
of the Company, each officer of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and its
officers and the Initial Purchaser set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company and its
Subsidiaries, any of their respective officers or directors, the Initial
Purchaser or any controlling person referred to in Section 9 hereof and shall
survive delivery of and payment for the Units. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 9 and 14
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
(i) the Company 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 Purchaser, has had or has a Material Adverse
Effect or there shall have been, in the sole judgment of the Initial
Purchaser, any event or development involving or reasonably likely to
cause or result in a Material Adverse Effect (including without
limitation a change in management or control of the Company), except
in each case as described in the Final Offering Circular (exclusive of
any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum 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; or
(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 which, in the case of clause (A), (B) or (C) and in the
sole judgment of the Initial Purchaser, makes it impracticable or
inadvisable to proceed with the private offering or the delivery of
the Units as contemplated by the Final Offering Circular.
(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 Purchaser. The statements set forth
in the first and fifth paragraphs under the heading "Plan of Distribution" in
the Offering Circular (to the extent such statements relate to the Initial
Purchaser) constitute the only information furnished by the Initial Purchaser to
the Company or its Subsidiaries for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and, if sent
to the Initial Purchaser, shall be mailed or delivered or telecopied and
confirmed in writing to (i) Xxxxxxxxx & Company, Inc., 00000 Xxxxx Xxxxxx
Xxxxxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, XX 00000, Attention: Xxxxx Xxxxxxx Telecopy
No. (000) 000-0000; with a copy to Xxxxx, Brown & Xxxxx, 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx, Esq., and if sent to the
Company, shall be mailed or delivered or telecopied and confirmed in writing to
it at 000 Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, Attention: Chief
Financial Officer, Telecopy No. (000) 000-0000; with a copy to Ruskin, Moscou,
Xxxxx & Xxxxxxxxxx, P.C., 000 Xxx Xxxxxxx Xxxx Xxxxxxx, XX 00000, Attention:
Xxxxxx X. Xxxxxx, Esq., Telecopy No. (000) 000-0000.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the United States mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressed, if telecopied.
14. Successors. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchaser, the Company and their respective successors and
legal representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company contained in Section 9 of this Agreement shall also be for the benefit
of any person or persons who control the Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities
of the Initial Purchaser contained in Section 9 of this Agreement shall also be
for the benefit of the directors of the Company their respective officers and
any person or persons who control the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act. No purchaser of Securities from
the Initial Purchaser will be deemed a successor because of such purchase.
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 APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF 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.
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 and the
Initial Purchaser.
* * * * *
Very truly yours,
NEW WORLD COFFEE-
MANHATTAN BAGEL, INC.
By: /s/ ________________________
Name: X. Xxxxx Xxxxxx
Title: Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXXXX & COMPANY, INC.
By: /s/ ________________________
Name: X. Xxxxx Xxxxxxx
Title:
