EXECUTION COPY
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XXXXXX PRODUCTS CORP.
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
$105,000,000
9-7/8% Senior Subordinated Notes due 2007
Purchase Agreement
November 19, 1997
BANCBOSTON SECURITIES INC.
XXXXXX BROTHERS INC.
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XXXXXX PRODUCTS CORP.
$105,000,000
9-7/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
November 19, 1997
New York, New York
BANCBOSTON SECURITIES INC.
XXXXXX BROTHERS INC.
c/o BancBoston Securities Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies & Gentlemen:
Xxxxxx Products Corp., a Massachusetts corporation (the
"Company"), proposes to issue and sell to BancBoston Securities Inc. and Xxxxxx
Brothers Inc. (together, the "Initial Purchasers") $105,000,000 in aggregate
principal amount of 9-7/8% Series A Senior Subordinated Notes due 2007 (the
"Series A Notes"), subject to the terms and conditions set forth herein. The
Series A Notes will be issued pursuant to an indenture (the "Indenture"), to be
dated the Closing Date (as defined), among the Company, the Guarantors (as
defined) and State Street Bank and Trust Company, as trustee (the "Trustee").
The Notes (as defined) will be fully and unconditionally guaranteed (the
"Guarantees") as to payment of principal, interest, liquidated damages and
premium, if any, on an unsecured senior subordinated basis, jointly and
severally, by each entity listed on Exhibit B hereto (collectively, the
Guarantors"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Indenture.
The offering of the Series A Notes is being made in connection with the
recapitalization (the "Recapitalization") of the Company pursuant to (i) that
certain Stock Purchase Agreement, to be dated as of the Closing Date (the "Stock
Purchase Agreement"), between Xxxxxx X. Xxxx ("Xxxx") and Xxxxxx Acquisition LLC
("Acquisition"), (ii) that certain Stock Purchase and Redemption Agreement,
dated as of October 27, 1997 (the "Redemption Agreement"), by and among Asco
Investments Ltd. ("Asco"), Xxxx, the Company, Xxxxxx Products (Far East) Limited
("Xxxxxx Far East") and Acquisition and (iii) that certain
Shareholders/Executives Agreement, dated as of October 24, 1997 (the "Executive
Agreement" and, together with the Stock Purchase Agreement and the Redemption
Agreement, the "Transaction Agreements"), by and among the Company, Pentland
Group, plc, Asco, Xxxx, Xxxxxxx Xxxxxxxxxx and Xxxxxxx X. Xxxxx. As a result of
the Recapitalization, Xxxxxx Far East will become a wholly owned subsidiary of
the Company. For the purposes of this Agreement, the term "Subsidiaries" of the
Company shall include Xxxxxx Far East and all of its subsidiaries.
1. Issuance of Securities. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $105,000,000 in principal amount of Series A Notes.
The Series A Notes and the Series B Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "Notes."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) OR (C) IT IS NOT A U.S. PERSON AND
IS NOT ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated November
3, 1997 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated November 19, 1997 (the "Offering Memorandum"), relating to the
Company, its Subsidiaries and the Series A Notes (collectively with any
amendments and supplements thereto, the "Offering Documents").
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs") and (ii)
non-U.S. persons outside the United States in reliance upon Regulation S
("Regulation S") under the Act (each, a "Reg S Investor"). The QIBs and Reg S
Investors are collectively referred to herein as the "Eligible Purchasers." The
Initial Purchasers will offer the Series A Notes to such Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement"), to be dated the Closing
Date, in substantially the form of Exhibit A hereto, for so long as such Series
A Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Securities and
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Exchange Commission (the "Commission"), under the circumstances set forth
therein, (i) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to the 9-7/8% Series B Notes due 2007 (the
"Series B Notes") to be offered in exchange for the Series A Notes (the
"Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415
under the Act (the "Shelf Registration Statement" and, together with the
Exchange Offer Registration Statement, the "Registration Statements") relating
to the resale by certain holders of the Series A Notes, and to use their best
efforts to cause such Registration Statements to be declared effective and to
consummate the Exchange Offer. This Agreement, the Notes, the Guarantees, the
Indenture, the Registration Rights Agreement, the Transaction Agreements and the
Credit Facility (as defined in the Offering Memorandum) are hereinafter referred
to collectively as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to
each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amount of Series A Notes
set forth opposite its name on Schedule I hereto. The purchase price for the
Series A Notes will be $970 per $1,000 principal amount Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Xxxxxxxx, Xxxxxxx & Xxxxxxx,
Boston, Massachusetts or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m., New York City time, on November
26, 1997 or at such other time as shall be agreed upon by the Initial Purchasers
and the Company. The time and date of such delivery and payment are herein
called the "Closing Date."
(c) On the Closing Date, one or more Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate amount corresponding to the aggregate amount of the
Series A Notes sold pursuant to Exempt Resales to Eligible Purchasers (the
"Global Notes") shall be delivered by the Company to the Initial Purchasers (or
as the Initial Purchasers direct), against payment by the Initial Purchasers of
the purchase price therefor, by wire transfer of same day funds, to an account
designated by the Company, provided that the Company shall give at least one
business day's prior written notice to the Initial Purchasers of the information
required to effect such wire transfer. The Global Notes shall be made available
to the Initial Purchasers for inspection not later than 9:30 a.m. on the
business day immediately preceding the Closing Date.
4. Agreements of the Company and the Guarantors. The Company and the
Guarantors, jointly and severally, covenant and agree with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing,
(i) of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of
any Notes for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purpose by any state securities commission
or other regulatory authority and (ii) of the happening of any event
that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires
the making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading. The Company and the Guarantors shall use their
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of any Notes or
Guarantees of Notes under any state securities or Blue Sky laws, the
Company and the Guarantors shall use their reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish the Initial Purchasers, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering
Memorandum, including all documents incorporated therein by reference,
and any amendments or supplements thereto, as the Initial Purchasers
may reasonably request. The Company and the Guarantors consent to the
use of the Preliminary Offering Memorandum and the Offering Memorandum,
and any amendments and supplements thereto required pursuant hereto, by
the Initial Purchasers in connection with Exempt Resales.
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(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless
the Initial Purchasers shall previously have been advised thereof and
shall not have objected thereto within a reasonable time after being
furnished a copy thereof. The Company and the Guarantors shall promptly
prepare, upon the Initial Purchasers' request, any amendment or
supplement to the Preliminary Offering Memorandum or the Offering
Memorandum that may be necessary or advisable in connection with Exempt
Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the
judgment of the Company and the Guarantors or in the reasonable opinion
of counsel for the Company and the Guarantors or counsel for the
Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum
in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser which is a prospective purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum to comply with applicable law,
(i) to notify the Initial Purchasers and (ii) forthwith to prepare an
appropriate amendment or supplement to such Preliminary Offering
Memorandum or Offering Memorandum so that the statements therein as so
amended or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that such Preliminary
Offering Memorandum or Offering Memorandum will comply with applicable
law. Each Initial Purchaser agrees, severally and not jointly, that,
upon its receipt of any written notice from the Company of the
existence of any fact or the happening of any event that requires the
making of any additions to or changes in the Preliminary Offering
Memorandum or Offering Memorandum (or amendment or supplement thereto,
as applicable) referred to in this Section 4(d) in order that such
document will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing
as of the date such document was delivered, not misleading, such
Initial Purchaser shall forthwith discontinue disposition of the
applicable Notes pursuant to such document until (A) such Initial
Purchaser receives from the Company copies of an amended or
supplemented document that the Company states in writing may be used by
such Initial Purchaser or (B) such Initial Purchaser is advised in
writing by the Company that the use of such document may be resumed.
(e) To cooperate with the Initial Purchasers and counsel for
the Initial Purchasers in connection with the qualification or
registration of the Series A Notes under the securities or Blue Sky
laws of such jurisdictions as the Initial Purchasers may reasonably
request and to continue such qualification in effect so long as
required for the Exempt Resales; provided, however, that none of the
Company or the Guarantors shall be required in connection therewith to
register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to service of
process in suits or taxation, in each case, other than as to matters
and transactions relating to the Preliminary Offering Memorandum, the
Offering Memorandum or Exempt Resales, in any jurisdiction where it is
not now so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to the
performance of the obligations of the Company and the Guarantors
hereunder, including in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the issuance, transfer and delivery of the Notes
and the Guarantees to the Initial Purchasers, (iii) the qualification
or registration of the Notes and the Guarantees for offer and sale
under the securities or Blue Sky laws of the several states (including,
without limitation, the cost of printing and mailing a preliminary and
final Blue Sky Memorandum and the reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto), (iv) furnishing
such copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with Exempt Resales, (v) the
preparation of certificates for the Notes and the Guarantees
(including, without limitation, printing and engraving thereof), (vi)
the fees, disbursements and expenses of the Company's and the
Guarantors' counsel and accountants, (vii) all fees and expenses
(including fees and expenses of counsel) of the Company in connection
with the approval of the Notes by DTC for "book-entry" transfer, (viii)
rating the Notes
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by rating agencies, (ix) the reasonable fees and expenses of the
Trustee and its counsel, (x) the performance by the Company and the
Guarantors of their other obligations under this Agreement and the
other Operative Documents and (xi) "roadshow" travel and other expenses
incurred by the Company in connection with the marketing and sale of
the Notes.
(g) To use the proceeds from the sale of the Series A Notes in
the manner described in the Offering Memorandum under the caption
Transactions "Transactions; Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing
Date and to satisfy all conditions precedent on their part to the
delivery of the Series A Notes and the Guarantees.
(j) 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 Series A Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or the Eligible Purchasers of the Series A Notes
or to take any other action that would result in the Exempt Resales not
being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and
during any period in which the Company and the Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to make available to any holder or
beneficial owner of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Notes from such holder or
beneficial owner, the information required by Rule 144A(d)(4) under the
Act.
(l) To comply with all of their agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representation letters of the Company to DTC relating to the approval
of the Notes by DTC for "book-entry" transfer.
(m) To use their reasonable best efforts to effect the
inclusion of the Notes in PORTAL and to obtain approval of the Series A
Notes by DTC for "book-entry" transfer.
(n) During a period of five years following the Closing Date,
to deliver without charge to the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of
(i) all reports or other publicly available information that the
Company shall mail or otherwise make available to its public
securityholders and (ii) all reports, financial statements and proxy or
information statements filed by the Company with the Commission or any
national securities exchange and such other publicly available
information concerning the Company or any of its Subsidiaries,
including without limitation, press releases.
(o) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course
by the Company and each Guarantor, copies of any unaudited interim
financial statements for any period subsequent to the periods covered
by the financial statements appearing in the Offering Memorandum.
(p) Not to 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 any security of the
Company or any of the Guarantors to facilitate the sale or resale of
the Notes. Except as permitted by the Act, none of the Company or the
Guarantors will distribute any (i) preliminary offering memorandum,
including, without limitation, the Preliminary Offering Memorandum,
(ii) offering memorandum, including, without limitation, the Offering
Memorandum, or (iii) other offering material in connection with the
offering and sale of the Notes.
(q) To use their best efforts to do and perform all things
required or necessary to be done and performed under this Agreement
prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Series A Notes and the Guarantees.
5. Representations and Warranties. (a) The Company and the Guarantors,
jointly
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and severally, represent and warrant to the Initial Purchasers that:
(i) All of the representations and warranties of the parties
to the Redemption Agreement made in the Redemption Agreement are true
and correct in all material respects as if made on and as of the date
hereof and the Closing Date.
(ii) The Preliminary Offering Memorandum as of its date does
not, and the Offering Memorandum as of its date and (as amended or
supplemented, if applicable) as of the Closing Date does not and will
not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties contained in this paragraph shall not apply to statements in
or omissions from the Preliminary Offering Memorandum and the Offering
Memorandum (or any supplement or amendment thereto) made in reliance
upon and in conformity with information relating to either Initial
Purchaser furnished to the Company in writing by such Initial Purchaser
expressly for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(iii) Each of the Company and its Subsidiaries (A) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, (B) has
all requisite corporate power and authority to carry on its business as
it is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and (C) is
duly qualified and in good standing as a foreign corporation,
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to (x) result, individually or in the aggregate,
in a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise), affairs or prospects of
the Company and its Subsidiaries, taken as a whole, (y) interfere with
or adversely affect the issuance or marketability of the Notes or the
issuance of the Guarantees pursuant hereto or (z) in any manner draw
into question the validity of this Agreement or any other Operative
Document or the transactions described in the Offering Memorandum under
the caption "Transactions; Use of Proceeds" (any of the events set
forth in clauses (x), (y) or (z), a "Material Adverse Effect").
(iv) The Company has no Subsidiaries other than the Guarantors
and each of the entities listed on Exhibit C hereto;
(v) All of the outstanding capital stock of each Subsidiary of
the Company is owned directly or indirectly by the Company or another
Subsidiary of the Company, free and clear of any security interest,
claim, lien, limitation on voting rights or encumbrance, except for any
such security interest, claim, lien, limitation on voting rights or
encumbrance pursuant to the Credit Facility; and all such securities
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights.
(vi) Other than pursuant to the Transaction Agreements, there
are not currently any outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company's Subsidiaries.
(vii) When the Series A Notes and the Guarantees are issued
and delivered pursuant to this Agreement, no Series A Note or Guarantee
will be of the same class (within the meaning of Rule 144A under the
Act) as securities of the Company or of any of the Guarantors that are
listed on a national securities exchange registered under Section 6 of
the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(viii) Each of the Company and the Guarantors has all
requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Operative
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the
corporate power and authority to issue, sell
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and deliver the Notes (in the case of the Company) and to issue and
deliver the Guarantees (in the case of the Guarantors) as provided
herein and therein.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by each of the Company and the Guarantors and is
the legal, valid and binding agreement of each of the Company and the
Guarantors, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity.
(x) The Indenture has been duly and validly authorized by each
of the Company and the Guarantors and, when duly executed and delivered
by each of the Company and the Guarantors, assuming the due
authorization, execution and delivery thereof by the Trustee, will be
the legal, valid and binding obligation of each of the Company and the
Guarantors, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission applicable to an indenture which is qualified
thereunder. The Offering Memorandum contains a summary of the material
terms of the Indenture, which is accurate in all material respects.
(xi) The Registration Rights Agreement has been duly and
validly authorized by each of the Company and the Guarantors and, when
duly executed and delivered by each of the Company and the Guarantors,
will be the legal, valid and binding obligation of each of the Company
and the Guarantors, enforceable against each of them in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The Offering Memorandum contains a summary of the material
terms of the Registration Rights Agreement, which is accurate in all
material respects.
(xii) The Credit Facility has been duly and validly authorized
by each of the Company and its Subsidiaries party thereto and, when
duly executed and delivered by each of the Company and such
Subsidiaries, will be the legal, valid and binding obligation of each
of the Company and such Subsidiaries, enforceable against each of them
in accordance with its terms, subject to (A) applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity and (B) securities laws prohibiting or
limiting the availability of, and public policy against,
indemnification or contribution. The Offering Memorandum contains a
summary of the material terms of the Credit Facility, which is accurate
in all material respects.
(xiii) The Redemption Agreement has been duly and validly authorized,
executed and delivered by the Company and Xxxxxx Far East and is the
legal, valid and binding obligation of each of the Company and Xxxxxx
Far East, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The Offering Memorandum contains a summary of the material
terms of the Transaction Agreements, which is accurate in all material
respects.
(xiv) The Series A Notes have been duly and validly authorized
by the Company for issuance and sale to the Initial Purchasers pursuant
to this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of the Company, enforceable against it in
accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The Offering Memorandum contains a summary of the material
terms of the Notes, which is accurate in all material respects.
(xv) The Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer
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and the Indenture, will be the legal, valid and binding obligations of
the Company, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(xvi) The Guarantees of the Series A Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series A Notes have been issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of each of the Guarantors enforceable against
each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity. The Offering Memorandum contains a
summary of the material terms of the Guarantees, which is accurate in
all material respects.
(xvii) The Guarantees of the Series B Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series B Notes have been issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, will be the legal,
valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(xviii) The statistical and market-related data included in
the Offering Memorandum are based on or derived from sources which the
Company believes to be reliable in all material respects.
(xix) Each of the Company and its Subsidiaries is not and,
after giving effect to the Offering and the Recapitalization will not
be, (A) in violation of its charter or bylaws, (B) in default in the
performance of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties is subject, which
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (C) in violation of any local, state,
federal or foreign law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without limitation,
environmental laws, statutes, ordinances, rules, regulations, judgments
or court decrees) applicable to it or any of its Subsidiaries or any of
its or their assets or properties (whether owned or leased), which
singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. To the best knowledge of the Company and the
Guarantors, there exists no condition that, with notice, the passage of
time or otherwise, would constitute a default under any such document
or instrument.
(xx) None of (A) the execution, delivery or performance by the
Company or any of the Guarantors of this Agreement or any of the other
Operative Documents to which it is a party, (B) the consummation of the
Recapitalization, (C) the issuance and sale of the Notes and the
issuance of the Guarantees and (D) consummation by the Company of the
transactions described in the Offering Memorandum under the caption
"Transactions; Use of Proceeds," violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or, after
giving effect to the Recapitalization will violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or
any of its Subsidiaries, or an acceleration of any indebtedness of the
Company or any of its Subsidiaries pursuant to, (1) the charter or
bylaws of the Company or any of its Subsidiaries, (2) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their property is or may be bound, (3)
any statute, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their assets or properties or (4) any judgment,
order or decree of any court or governmental agency or authority having
jurisdiction over the Company or any of its Subsidiaries or any of
their assets or properties. No consent, approval, authorization or
9
order of, or filing, registration, qualification, license or permit of
or with, (A) any court or governmental agency, body or administrative
agency or (B) any other person is required for (1) the execution,
delivery and performance by the Company or any of the Guarantors of
this Agreement or any of the other Operative Documents to which it is a
party, (2) the Recapitalization or (3) the issuance and sale of the
Notes and the issuance of the Guarantees and the transactions
contemplated hereby and thereby, except such as have been or will be
obtained and made on or prior to the Closing Date (or, in the case of
the Registration Rights Agreement, will be obtained and made under the
Act, the Trust Indenture Act, and state securities or Blue Sky laws and
regulations).
(xxi) There is and, after giving effect to the
Recapitalization, except as could not reasonably be expected to result
in a Material Adverse Effect, will be (A) no action, suit,
investigation or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending
or, to the best knowledge of the Company and the Guarantors, threatened
or contemplated to which the Company or any of its Subsidiaries is or
may be a party or to which the business or property of the Company or
any of its Subsidiaries, is or, after giving effect to the
Recapitalization may be subject, (B) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental body and (C) no
injunction, restraining order or order of any nature by a federal or
state court or foreign court of competent jurisdiction to which the
Company or any of its Subsidiaries is or may be subject or to which the
business, assets or property of the Company or any of its Subsidiaries
is or may be subject, that, in the case of clauses (A), (B) and (C)
above, (1) is required to be disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum and is not so disclosed or (2)
could reasonably be expected to result in a Material Adverse Effect.
(xxii) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Notes or the
Guarantees or prevents or suspends the use of the Offering Memorandum;
no injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued that prevents the
issuance of the Notes or the Guarantees or prevents or suspends the
sale of the Notes in any jurisdiction referred to in Section 4(e)
hereof; and every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all
material respects.
(xxiii) The Company has delivered to the Initial Purchasers
true and correct copies of all documents and agreements related to the
Recapitalization and the Credit Facility, including all amendments,
alterations, modifications or waivers thereto and all exhibits or
schedules thereto.
(xxiv) There is and, after giving effect to the
Recapitalization, except as could not be reasonably expected to have a
Material Adverse Effect, will be (A) no significant unfair labor
practice complaint pending against the Company or any of its
Subsidiaries nor, to the best knowledge of the Company and the
Guarantors, threatened against any of them, before the National Labor
Relations Board, any state or local labor relations board or any
foreign labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or
any of its Subsidiaries or, to the best knowledge of the Company and
the Guarantors, threatened against any of them, (B) no significant
strike, labor dispute, slowdown or stoppage pending against the Company
or any of its Subsidiaries nor, to the best knowledge of the Company
and the Guarantors, threatened against the Company or any of its
Subsidiaries and (C) to the best knowledge of the Company and the
Guarantors, no union representation question existing with respect to
the employees of the Company or any of its Subsidiaries. To the best
knowledge of the Company and the Guarantors, no collective bargaining
organizing activities are taking place with respect to the Company or
any of its Subsidiaries. None of the Company or any of its Subsidiaries
has violated (A) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the rules and regulations thereunder, except those violations that
could not reasonably be expected to have a Material Adverse Effect.
(xxv) None of the Company or any of its Subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
10
("Environmental Laws"), which violation could reasonably be expected to
have a Material Adverse Effect.
(xxvi) There is no alleged liability, nor to the best
knowledge of the Company and the Guarantors, any reasonable basis for
liability (including, without limitation, alleged or potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal injuries or
penalties) of the Company or any of its Subsidiaries arising out of,
based on or resulting from (A) the presence or release into the
environment of any Hazardous Material (as defined) at any location,
whether or not owned by the Company or such Subsidiary, as the case may
be, or (B) any violation or alleged violation of any Environmental Law,
which alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could
reasonably be expected to have a Material Adverse Effect. The term
"Hazardous Material" means (A) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (B) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (C) any petroleum
or petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the environment
or imposing liability or standards of conduct concerning any such
chemical material, waste or substance.
(xxvii) Each of the Company and its Subsidiaries has and,
after giving effect to the Recapitalization, will have such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and
operate their respective properties and to conduct their businesses
except where the failure to have such permits could not reasonably be
expected to result in a Material Adverse Effect; each of the Company
and its Subsidiaries has fulfilled and performed all of its obligations
with respect to such permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of
the holder of any such permit; and, except as described in the Offering
Memorandum, such permits contain no restrictions that are materially
burdensome to the Company or such Subsidiary, as the case may be.
(xxviii) Each of the Company and its Subsidiaries has and,
after giving effect to the Recapitalization will have (A) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens,
charges, encumbrances and restrictions (except for Permitted Liens (as
defined in the Indenture) and taxes not yet payable), (B) peaceful and
undisturbed possession under all material leases to which any of them
is a party as lessee and each of which lease is valid and binding and
no default exists thereunder, except for defaults that could not
reasonably be expected to have a Material Adverse Effect, (C) all
licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with,
all federal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals (each, an
"Authorization") necessary to engage in the business conducted by any
of them in the manner described in the Offering Memorandum and (D) no
reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any such Authorization. All such
Authorizations are and, after giving effect to the Recapitalization,
will be valid and in full force and effect and each of the Company and
its Subsidiaries is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto. All material leases to which the Company or any of its
Subsidiaries is a party are valid and binding and no default by the
Company or such Subsidiary, as the case may be, has occurred and is
continuing thereunder and, to the best knowledge of the Company and the
Guarantors, no material defaults by the landlord are existing under any
such lease, except those defaults that could not reasonably be expected
to have a Material Adverse Effect.
(xxix) Each of the Company and its Subsidiaries owns,
possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service
marks and trade names, inventions, computer programs, technical data
and information (collectively, the "Intellectual Property") presently
11
employed by it in connection with the businesses now operated by it or
that are proposed to be operated by it free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien of any kind of any other person,
and none of the Company or any of its Subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing, except, in each case, for
violations or notices that could not reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property in
connection with the business and operations of the Company or any of
its Subsidiaries does not infringe on the rights of any person, except
as could not reasonably be expected to have a Material Adverse Effect.
(xxx) All material tax returns required to be filed by the
Company or any of its Subsidiaries in all jurisdictions have been so
filed. All material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been paid, other
than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty
or interest. To the knowledge of the Company and the Guarantors, there
are no material proposed additional tax assessments against the Company
or any of its Subsidiaries, or the assets or property of the Company or
any of its Subsidiaries, except those tax assessments for which
adequate reserves have been established.
(xxxi) None of the Company or any of its Subsidiaries is and,
after giving effect to the Recapitalization will be an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(xxxii) There are no holders of securities of the Company or
any of its Subsidiaries who, by reason of the execution by the Company
and the Guarantors of this Agreement or any other Operative Document or
the consummation by the Company and the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any of its Subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them, other
than pursuant to the Registration Rights Agreement.
(xxxiii) Each of the Company and its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect thereto.
(xxxiv) Each of the Company and its Subsidiaries maintains
insurance covering its properties, operations, personnel and
businesses, insuring against such losses and risks as are consistent
with industry practice to protect the Company and its Subsidiaries and
their respective businesses. None of the Company or any of its
Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance.
(xxxv) None of the Company or any of its Subsidiaries has (A)
taken, 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 any security of the Company or any of its
Subsidiaries to facilitate the sale or resale of the Notes or (B) since
the date of the Preliminary Offering Memorandum, (1) sold, bid for,
purchased or paid any person any compensation for soliciting purchases
of the Notes or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company or any of its Subsidiaries.
(xxxvi) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (A) that the
purchasers who buy the Series A Notes in the Exempt Resales are
Eligible Purchasers and (B) the accuracy of the Initial Purchasers'
representations regarding the absence of
12
general solicitation in connection with the sale of Series A Notes to
the Initial Purchasers and the Exempt Resales contained herein. No form
of general solicitation or general advertising (as defined in
Regulation D under the Act) was used by the Company, any of the
Guarantors or any of their respective representatives (other than the
Initial Purchasers, as to which the Company and the Guarantors make no
representation or warranty) in connection with the offer and sale of
any of the Series A Notes or in connection with Exempt Resales,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Notes or the
Guarantees have been issued and sold by the Company or any of its
Subsidiaries within the six-month period immediately prior to the date
hereof.
(xxxvii) The execution and delivery of this Agreement, the
other Operative Documents and the sale of the Series A Notes to be
purchased by Eligible Purchasers will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986. The representation made by the
Company and the Guarantors in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Notice to Investors."
(xxxviii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxix) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
(xl) None of the Company, the Guarantors or any of their
respective affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes or the Guarantees.
(xli) The Series A Notes offered and sold in reliance on
Regulation S have been and will be offered and sold by the Company only
in offshore transactions.
(xlii) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme by the Company to evade the
registration provisions of the Act.
(xliii) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States and, in
connection therewith, the Preliminary Offering Memorandum and the
Offering Memorandum contains or will contain the disclosure required by
Rule 902(h).
(xliv) The Series A Notes sold in reliance on Regulation S
will be represented upon issuance by a temporary global securities that
may not be exchanged for definitive securities until the expiration of
the 40-day restricted period referred to in Rule 903(c)(3) of the Act
and only upon certification of beneficial ownership of such Series A
Notes by non-U.S. persons or U.S. persons who purchased such Series A
Notes in transactions that were exempt from the registration
requirements of the Act.
(xlv) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, (A) none of the
Company or any of its Subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are or, after giving effect to
the Recapitalization, will be material, individually or in the
aggregate, to the Company and its Subsidiaries, taken as a whole, nor
entered into any transaction not in the ordinary course of business,
(B) there has not been any change or development which, singly or in
the aggregate, could reasonably be expected to result in a Material
Adverse Effect and (C) there has been no dividend or distribution of
any kind declared, paid or
13
made by the Company on any class of its capital stock.
(xlvi) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the issuance of the
Guarantees, the application of the proceeds from the issuance and sale
of the Notes and the consummation of the transactions contemplated
thereby as set forth in the Offering Memorandum, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
(xlvii) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements, together with related schedules and
notes thereto, comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under
the Act and present fairly in all material respects the financial
position and results of operations of Xxxxxx and its subsidiaries, and
of Xxxxxx Far East and its subsidiaries at the dates and for the
periods indicated. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented. The pro forma
financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements of
Xxxxxx and Xxxxxx Far East except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly in all material respects the historical and
proposed transactions contemplated by this Agreement and the other
Operative Documents; and such pro forma financial statements comply as
to form in all material respects with the requirements applicable to
pro forma financial statements included in registration statements on
Form S-1 under the Act, except as expressly stated therein. The other
financial and statistical information and data included in the Offering
Memorandum derived from the historical and pro forma financial
statements, are accurately presented in all material respects and
prepared on a basis consistent with the financial statements,
historical and pro forma, included in the Offering Memorandum and the
books and records of the Company and its Subsidiaries.
(xlviii) None of the Company or any of the Guarantors intends
to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature. The present fair saleable value of the
assets of each of the Company and the Guarantors exceeds the amount
that will be required to be paid on or in respect of its existing debts
and other liabilities (including contingent liabilities) as they become
absolute and matured. The assets of each of the Company and the
Guarantors do not constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted. Upon the
issuance of the Notes and consummation of the Recapitalization, the
present fair saleable value of the assets of each of the Company and
the Guarantors will exceed the amount that will be required to be paid
on or in respect of its existing debts and other liabilities (including
contingent liabilities) as they become absolute and matured. Upon the
issuance of the Notes and the consummation of the Recapitalization, the
assets of each of the Company and the Guarantors will not constitute
unreasonably small capital to carry out its business as now conducted,
including the capital needs of each of the Company and the Guarantors,
taking into account the projected capital requirements and capital
availability. In computing the amount of any such contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in light of all the facts and
circumstances existing at such time, represents that amount that can
reasonably be expected to become an actual or matured liability.
(xlix) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and its
Subsidiaries and any other person that would give rise to a valid claim
against the Company or any of its Subsidiaries or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Notes or the
issuance of the Guarantees.
(l) There exist no conditions that would constitute a default
(or an event which with notice or the lapse of time, or both, would
constitute a default) under any of the Operative Documents.
(li) Each certificate signed by any officer of the Company or
any of the Guarantors and delivered to the Initial Purchasers or
counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by the Company or such Guarantor, as the
case may be, to the Initial
14
Purchasers as to the matters covered thereby.
The Company and the Guarantors acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Guarantors and counsel for the Initial Purchasers, will rely upon the accuracy
and truth of the foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser 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 Series A
Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present
intention of offering or selling any of the Series A Notes in a fashion
that would violate the Act or the securities laws of any state of the
United States or any other applicable jurisdiction and (B) will be
reoffering and reselling the Series A Notes only to QIBs in reliance on
the exemption from the registration requirements of the Act provided by
Rule 144A and in offshore transactions in reliance upon Regulation S
under the Act.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Series A Notes,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(iv) Each of the Initial Purchasers agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to,
Eligible Purchasers. Each of the Initial Purchasers further (A) agrees
that it will offer to sell the Series A Notes only to, and will solicit
offers to buy the Series A Notes only from (1) Eligible Purchasers that
the Initial Purchasers reasonably believes are QIBs and (2) Reg S
Investors, (B) acknowledges and agrees that, in the case of such QIBs
and such Reg S Investors, such Series A Notes will not have been
registered under the Act and may be resold, pledged or otherwise
transferred only (x)(I) to a person whom the seller reasonably believes
is a QIB purchasing for its own account or for the account of a QIB in
a transaction meeting the requirements of Rule 144A, (II) in an
offshore transaction (as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 under the Act, (III) in a transaction meeting
the requirements of Rule 144 under the Act, (IV) to an Accredited
Investor that, prior to such transfer, furnishes the Trustee a signed
letter containing certain representations and agreements relating to
the registration of transfer of such Series A Notes and, if such
transfer is in respect of an aggregate principal amount of Series A
Notes less than $250,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Act or (V) in
accordance with another exemption from the registration requirements of
the Act (and based upon an opinion of counsel if the Company so
requests), (y) to the Company or any of its Subsidiaries, (z) pursuant
to an effective registration statement under the Act and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) acknowledges
that it will, and will notify each subsequent holder that it is
required to, notify any purchaser of the security evidenced thereby of
the resale restrictions set forth in (B) above.
(v) Such Initial Purchaser agrees that it has offered the
Series A Notes and will offer and sell the Series A Notes (A) as part
of its distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Series A Notes
pursuant hereto and the Closing Date, only in accordance with Rule 903
of Regulation S or another exemption from the registration requirements
of the Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to
the Series A Notes (including any "tombstone" advertisement") to be
published in any newspaper or periodical or posted in any public place
and will not issue any circular relating to the Series A Notes, except
such advertisements as are permitted by and include the statements
required by Regulation S.
15
(vi) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Notes sold pursuant hereto
in reliance on Regulation S (A) as part of its distribution at any time
and (B) otherwise until 40 days after the later of the commencement of
the offering of the Series A Notes pursuant hereto and the Closing
Date, to a U.S. person (as defined in Rule 902 of the Act) or for the
account or benefit of a U.S. person (other than a distributor (as
defined in Rule 902 of the Act)).
(vii) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule
903(c)(3) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
"The Series A Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii)
otherwise until 40 days after the later of the
commencement of the offering and the Closing Date,
except in either case in accordance with Regulation S
under the Securities Act (or Rule 144A or to
Accredited Investors in transactions that are exempt
from the registration requirements of the Securities
Act), and in connection with any subsequent sale by
you of the Series A Notes covered hereby in reliance
on Regulation S during the period referred to above
to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you
must deliver a notice to substantially the foregoing
effect. Terms used above have the meanings assigned
to them in Regulation S."
(viii) Such Initial Purchaser agrees that the Series A Notes
offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period
referred to in Rule 903(c)(3) of the Act and only upon certification of
beneficial ownership of such Series A Notes by non-U.S. persons or U.S.
persons who purchased such Series A Notes in transactions that were
exempt from the registration requirements of the Act.
The Initial Purchasers understand that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 8 hereof, counsel for the Company and the Guarantors and counsel for the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each of the Initial
Purchasers, (ii) each person, if any, who controls either of the
Initial Purchasers within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (iii) the respective officers,
directors, partners, employees, representatives and agents of each of
the Initial Purchasers or any controlling person to the fullest extent
lawful, from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including, but not limited to,
reasonable attorneys' fees and any and all expenses whatsoever incurred
in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever, and any
and all amounts paid in settlement of any claim or litigation), joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the Company and the Guarantors will
not be liable in any such case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises out of
16
or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with information relating to either of the Initial
Purchasers furnished to the Company in writing by or on behalf of such
Initial Purchaser expressly for use therein. The indemnification
contained in this paragraph (a) with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of any Initial
Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, liability, claim, damage or
expense (i) arising from the sale of the Notes by such Initial
Purchaser to any person if a copy of an Offering Document shall not
have been delivered or sent to such person, at or prior to the written
confirmation of such sale, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained
in the Offering Document was corrected in a subsequent Offering
Document, provided that the Company has delivered such subsequent
Offering Document to the Initial Purchasers in requisite quantity on a
timely basis to permit such delivery or sending or (ii) resulting from
the use by such Initial Purchaser of any Offering Document referred to
in Section 4(d) hereof when, pursuant to Section 4(d) hereof, such
Initial Purchaser was not permitted to do so; provided that the
exceptions in clauses (i) and (ii) shall not affect the indemnity with
respect to any other Initial Purchaser not otherwise subject to such
exceptions. This indemnity agreement will be in addition to any
liability which the Company and the Guarantors may otherwise have,
including under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly,
agrees to indemnify and hold harmless (i) the Company and the
Guarantors, (ii) each person, if any, who controls the Company and the
Guarantors within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Company and the
Guarantors, or any controlling person, against any losses, liabilities,
claims, damages and expenses whatsoever (including, but not limited to,
reasonable attorneys' fees and any and all expenses whatsoever incurred
in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity
with information relating to such Initial Purchaser furnished to the
Company in writing by or on behalf of such Initial Purchaser expressly
for use therein; provided, however, that in no case shall either of the
Initial Purchasers be liable or responsible for any amount in excess of
the discounts and commissions received by such Initial Purchaser, as
set forth on the cover page of the Offering Memorandum. This indemnity
will be in addition to any liability which the Initial Purchasers may
otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge
17
of the defense of such action within a reasonable time after notice of
commencement of the action or (iii) such indemnified party or parties
shall have reasonably concluded based upon the advice of counsel that
there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying party or parties shall not have
the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and
expenses of counsel shall be borne by the indemnifying parties;
provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel
(in addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim or action effected
without its prior written consent, provided that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable or is insufficient to hold harmless a party indemnified
thereunder, the Company and the Guarantors, on the one hand, and each Initial
Purchaser, on the other hand, shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company and
the Guarantors, any contribution received by the Company and the Guarantors from
persons, other than the Initial Purchasers, who may also be liable for
contribution, including persons who control the Company and the Guarantors
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act) to which the Company, the Guarantors and such Initial Purchaser may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Guarantors, on one hand, and such Initial
Purchaser, on the other hand, from the offering of the Series A Notes or, if
such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Guarantors, on one hand, and such Initial Purchaser, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors, on one hand, and each Initial Purchaser, on the other hand,
shall be deemed to be in the same proportion as (i) the total proceeds from the
offering of Series A Notes (net of discounts but before deducting expenses)
received by the Company and the Guarantors and (ii) the discounts and
commissions received by such Initial Purchaser, respectively, in each case as
set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company and the Guarantors, on one hand, and of each
Initial Purchaser, on the other hand, 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, the Guarantors or such Initial Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Series A Notes purchased by such Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7, (A)
each person, if any, who controls either of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of each of the Initial Purchasers or any controlling person shall have
the same rights to contribution as such Initial Purchaser, and (A) each person,
if any, who controls the Company and the Guarantors within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of the Company and the Guarantors shall have the same rights to contribution as
the Company and the Guarantors, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for
18
contribution may be made against another party or parties under this Section 7,
notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent, provided that such written consent was not unreasonably
withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and
correct on the date hereof and on the Closing Date (after giving effect
to the Recapitalization) with the same force and effect as if made on
and as of the date hereof and the Closing Date, respectively. Each of
the Company and the Guarantors shall have performed or complied with
all of the agreements herein contained and required to be performed or
complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the second business day following the date of this
Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification or
exemption from qualification of the Series A Notes in any jurisdiction
referred to in Section 4(e) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Series A Notes or the Guarantees or the consummation of
the Recapitalization; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge
of the Company and the Guarantors, threatened against, the Company or
any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined,
could reasonably be expected to adversely affect the issuance of the
Series A Notes or the Guarantees or the consummation of the
Recapitalization; and no stop order shall have been issued preventing
the use of the Offering Memorandum, or any amendment or supplement
thereto, or which could reasonably be expected to have a Material
Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material increase in the short-term debt, of the Company or any of its
Subsidiaries from that set forth in the Offering Memorandum, (ii) no
dividend or distribution of any kind shall have been declared, paid or
made by the Company or any of its Subsidiaries on any class of its
capital stock and (iii) none of the Company or any of its Subsidiaries
shall have incurred any liabilities or obligations, direct or
contingent, that are or, after giving effect to the Recapitalization,
will be material, individually or in the aggregate, to the Company and
its Subsidiaries, taken as a whole, and that are required to be
disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the
latest balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
occurred any material adverse change in the business, prospects,
financial condition or results of operation of the Company and its
Subsidiaries, taken as a whole.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company and the
Guarantors, in form and substance satisfactory to the Initial
Purchasers, confirming, as of the Closing Date, the matters set forth
in paragraphs (a), (b), (c) and (d) of this Section 8 and that, as of
the Closing Date, the obligations of the Company and the Guarantors to
be performed hereunder on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
19
Purchasers, of Posternak, Xxxxxxxxxx & Xxxx, L.L.P., counsel for the
Company and the Guarantors, to the effect set forth in Exhibit D
hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from Price Waterhouse
LLP, independent public accountants, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters
addressed to the Initial Purchasers and in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers with respect to the combined financial statements and
certain financial information of Xxxxxx and its subsidiaries, and of
Xxxxxx Far East and its subsidiaries, contained in the Offering
Memorandum.
(h) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers, covering such matters as are customarily covered in such
opinions.
(i) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
(k) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(l) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(m) The Recapitalization and the Credit Facility shall be
consummated prior to, or simultaneously with, the Closing of the
Offering on substantially the terms described in the Offering
Memorandum and the Initial Purchasers shall have received counterparts,
conformed as executed, of each of the Transaction Agreements and the
Credit Facility and such other documentation as they deem necessary to
evidence the consummation thereof.
(n) Any applicable waiting period under the Xxxx Xxxxx Xxxxxx
act shall have been expired or terminated.
(o) All of the opinions to be delivered by the Company and the
Guarantors pursuant to the Credit Facility and the Redemption Agreement
shall be addressed and delivered to the Initial Purchasers.
(p) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 463(g) under the Securities Act, that (i) it is
downgrading its rating assigned to any class of securities of the
Company or (ii) it is reviewing its ratings assigned to any class of
securities of the Company with a view to possible downgrading, or with
negative implications, or direction not determined.
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company and the Guarantors
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers. The Company and
the Guarantors shall furnish the Initial Purchasers with such conformed copies
of such opinions, certificates, letters and other documents as they shall
reasonably request.
9. Initial Purchasers' Information. The Company and the Guarantors
acknowledge that the
20
statements with respect to the offering of the Series A Notes set forth in the
last paragraph of the cover page and the third paragraph and the third sentence
of the fourth paragraph under the caption "Plan of Distribution" in the Offering
Memorandum constitute the only information relating to any of the Initial
Purchasers furnished to the Company in writing by or on behalf of any of the
Initial Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Guarantors contained in this Agreement, including the agreements contained
in Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and
the contribution agreements contained in Section 7, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
either of the Initial Purchasers, any controlling person thereof, or by or on
behalf of the Company and the Guarantors or any controlling person thereof, and
shall survive delivery of and payment for the Series A Notes to and by the
Initial Purchasers. The representations contained in Section 5 and the
agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to the
Company or any of the Guarantors if, on or prior to such date, (i) the
Company or any of the Guarantors shall have failed, refused or been
unable to perform in any material respect any agreement on their part
to be performed hereunder, (ii) any other condition to the obligations
of the Initial Purchasers hereunder as provided in Section 8 is not
fulfilled when and as required in any material respect, (iii) in the
reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities,
prospects, net worth, results of operations or cash flows of the
Company and its Subsidiaries, taken as a whole, other than as set forth
in the Offering Memorandum, or (iv)(A) any domestic or international
event or act or occurrence has materially disrupted, or in the opinion
of the Initial Purchasers will in the immediate future materially
disrupt, the market for the Company's securities or for securities in
general; or (B) trading in securities generally on the New York or
American Stock Exchange shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have
been required, on such exchange, or by such exchange or other
regulatory body or governmental authority having jurisdiction; or (C) a
banking moratorium shall have been declared by federal or state
authorities, or a moratorium in foreign exchange trading by major
international banks shall have been declared; or (D) there is an
outbreak or escalation of armed hostilities involving the United States
on or after the date hereof, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall
be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Series A
Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse change
in general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United
States shall be such as, in the Initial Purchasers' judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Series
A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or telephonic facsimile and, in either case,
confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of
Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series A Notes provided for herein is
not consummated because any condition to the obligations of the Initial
Purchasers set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company or any of the
Guarantors to perform any agreement herein or comply with any provision
hereof, the Company
21
and the Guarantors shall reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and expenses of
the Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to BancBoston Securities Inc., 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate Finance Department, telecopy
number: (000) 000-0000, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx X. Xxxxxxxxxxx, telecopy number:
(000) 000-0000; and if sent to the Company or any of the Guarantors, shall be
mailed, delivered, telecopied and confirmed in writing or sent by a nationally
recognized overnight courier service guaranteeing delivery on the next business
day to Xxxxxx Products Corp., 000 Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000, Attention: Chief Financial Officer, telecopy number: (000) 000-0000, with
copies to Posternak, Xxxxxxxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx P.C., telecopy number: (617)
367-2315 and Xxxxxxxx, Xxxxxxx & Xxxxxxx, P.C., 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxx Xxxxxx, telecopy number: (000) 000-0000.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers, the Company and the Guarantors
and the controlling persons and agents referred to in Sections 6 and 7, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance with
the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature page to follow]
22
If the foregoing correctly sets forth the understanding among
the Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
XXXXXX PRODUCTS CORP.
By: /s/ Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: President
XXXXXX MANUFACTURING CORP.
By: /s/ Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: President
XXXXXX AIR (TAIWAN) CORP.
By: /s/ Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: President
Accepted and agreed to as
of the date first above written:
BANCBOSTON SECURITIES INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS INC.
By: /s/ Xxxx Xxxxxxx
------------------------
Name: Xxxx Xxxxxxx
Title:
EXHIBIT B
List of Guarantors
Xxxxxx Manufacturing Corp., a Massachusetts corporation.
Xxxxxx Air (Taiwan) Corp., a Massachusetts corporation.
A-2
EXHIBIT C
List of Subsidiaries of the Company other than the Guarantors
Xxxxxx Air (Canada) Corp., an Ontario corporation.
Xxxxxx Products (Far East) Limited, a Bahamas corporation.
Esteem Industries Ltd., a Hong Kong corporation.
Raider Motor Corp., a Bahamas corporation.
Dongguan Huixin Electrical Products Company, Ltd., a China corporation.
Dongguan Raider Motor Corp. Ltd., a China corporation.
B-1
