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EXHIBIT 4.2
THE DII GROUP, INC.
$150,000,000
8.50% Senior Subordinated Notes Due 2007
PURCHASE AGREEMENT
New York, New York
September 16, 1997
To: SALOMON BROTHERS INC
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BT ALEX. XXXXX INCORPORATED
In care of:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
The DII Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Purchasers") $150,000,000 principal
amount of its 8.50% Senior Subordinated Notes due 2007 (the "Securities"), to
be issued under an indenture (the "Indenture") to be dated as of September 19,
1997, between the Company and Chase Trust Company of California, as trustee
(the "Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933, as amended
(the "Act"), in reliance upon the exemption from the registration requirements
of the Act provided by Section 4(2) thereof. You have advised the Company that
you will make an offering of the Securities purchased by you hereunder in
accordance with Section 4 hereof on the terms set forth in the Final Memorandum
(as defined below), as soon as you deem advisable after this Agreement has been
executed and delivered.
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In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated September 3, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated September 16,
1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum in connection with the offering
and resale by the Purchasers of the Securities. Any references herein to the
Preliminary Memorandum or the Final Memorandum, and any amendment or supplement
thereto, shall be deemed to include all exhibits thereto and all documents
incorporated by reference therein that were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the date and time
that this Agreement is executed and delivered by the parties hereto (the
"Execution Time"); and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Final Memorandum shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Execution Time that is incorporated by reference therein.
The holders of the Securities will be entitled to the benefits
of the Registration Rights Agreement dated September 16, 1997, between the
Company and the Purchasers (the "Registration Agreement").
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Purchasers as set forth below in this
Section 1.
(a) Each of the Preliminary Memorandum and the Final
Memorandum as of its respective date did not, and the Final Memorandum
(as the same may have been amended or supplemented) as of the Closing
Date will not, contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum in
reliance upon and in conformity with information furnished in writing
to the Company by or
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on behalf of the Purchasers specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or any amendment or
supplement thereof or thereto). All documents incorporated by
reference in the Preliminary Memorandum or the Final Memorandum that
were filed under the Exchange Act on or before the Execution Time
complied, and all such documents that are filed under the Exchange Act
after the Execution Time and on or before the Closing Date will
comply, in all material respects with the applicable requirements of
the Exchange Act and the rules thereunder.
(b) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Securities.
(c) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act ("Regulation D")) of the Company
has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Act) the offer or sale of which is
currently or will be considered integrated with the sale of the
Securities in a manner that would require the registration of the
Securities under the Act or (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with the offering of the Securities.
(d) It is not necessary in connection with the offer, sale
and delivery of the Securities in the manner contemplated by this
Agreement and the Final Memorandum to register the Securities under
the Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
(e) None of the Company, its affiliates or any person acting
on its or their behalf has engaged in any directed selling efforts (as
that term is defined in Regulation S under the Act ("Regulation S"))
with
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respect to the Securities, and the Company and its affiliates and any
person acting on its or their behalf have complied with the offering
restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S.
(f) The Company is subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act.
(g) The Securities satisfy the eligibility requirements set
forth in Rule 144A(d)(3) under the Act.
(h) The Company has agreed to permit the Securities to be
designated PORTAL eligible securities, will pay the requisite fees
related thereto and has provided all necessary information to the
National Association of Securities Dealers, Inc., in order to ensure
that the Securities are designated PORTAL eligible securities.
(i) The Company is not required to register as an "investment
company" under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), without taking account of any exemption
arising out of the number of holders of the Company's securities.
(j) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any Securities of
the Company (except as contemplated by this Agreement).
(k) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company agrees to sell to the Purchasers, and the Purchasers agree
to purchase from the Company, severally and not jointly, at a purchase price of
97.267% of the principal amount thereof, plus accrued interest, if any, from
September 19, 1997, to the Closing Date, the principal amount of the Securities
set forth opposite each Purchaser's name in Schedule I hereto.
(b) The Purchasers shall notify the Company of the completion
of the sale of the Securities by the Purchasers.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on September 19,
1997, or such later date as the Purchasers and the Company shall agree (such
date and time of delivery and payment for the Securities being herein called
the "Closing Date"). Delivery of the Securities shall be made to the
Purchasers against payment by the Purchasers of the purchase price thereof to
or upon the order of the Company by wire transfer in Federal (same day) funds
to an account previously designated by the Company and agreed to by the
Purchasers not less than two business days prior to the Closing Date. Delivery
of the Securities shall be made at the office of Cravath, Swaine & Xxxxx,
Xxxxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Certificates for the
Securities shall be registered in such names and in such denominations as the
Purchasers may request not less than two full business days in advance of the
Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Purchasers in New York, New York, not
later than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges
that the Securities have not been registered under the Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act or
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pursuant to an effective registration statement under the Act and (ii)
represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) and that, in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on
Rule 144A or (ii) in accordance with the restrictions set forth in
Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made
or will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States, except
pursuant to a registered public offering, whether an exchange offer or
shelf registration, as provided in the Registration Agreement.
(c) (i) It has not offered or sold, and will not offer or
sell, any Securities to persons in the United Kingdom, except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or as agent) for
the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the
United Kingdom, within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"), (ii) it has complied and will
comply with all applicable provisions of the Financial Services Xxx
0000 and the Regulations with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United
Kingdom, and (iii) it has only issued or passed on and will only issue
or pass on to any person in the United Kingdom any document received
by it in connection with the issue of the Securities if that person is
of a kind
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described in Article 11(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1995 or is a person to
whom such document may otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with the Purchasers that:
(a) The Company will furnish to the Purchasers, without
charge, during the period mentioned in paragraph (c) below, as many
copies of the Final Memorandum and any supplements and amendments
thereof or thereto as the Purchasers may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without prior consent (which
shall not be unreasonably withheld) of the Purchasers. Prior to the
completion of the sale of the Securities by the Purchasers, the
Company will not file any document under the Exchange Act that is
incorporated by reference in the Final Memorandum unless the Company
has furnished you a copy for your review prior to filing and will not
file any such document to which you reasonably and timely object.
(c) The Company will promptly advise the Purchasers when,
prior to the completion of the sale of the Securities by the
Purchasers, any document filed under the Exchange Act which is
incorporated by reference in the Final Memorandum shall have been
filed with the Securities and Exchange Commission (the "Commission").
(d) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which it
is necessary to amend or supplement the Final Memorandum in order to
make the statements therein in the light of the circumstances
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under which they were made not misleading, or if it shall be necessary
to amend or supplement the Final Memorandum (including any document
incorporated by reference therein which was filed under the Exchange
Act) to comply with the Exchange Act or the rules thereunder or other
applicable law, the Company promptly will notify the Purchasers of the
same and, subject to paragraph (b) of this Section 5, will prepare and
provide to the Purchasers pursuant to paragraph (a) of this Section 5
an amendment or supplement which will correct such statement or
omission or effect such compliance and, in the case of such an
amendment or supplement which is to be filed under the Exchange Act
and which is incorporated by reference in the Final Memorandum, will
file such amendment or supplement with the Commission.
(e) The Company will cooperate with you and your counsel in
endeavoring to obtain for the qualification of the Securities for sale
under the laws of such jurisdictions as the Purchasers may reasonably
designate and will maintain such qualifications in effect so long as
reasonably required for the sale of the Securities; provided, however,
that the Company shall not be required to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
The Company will promptly advise the Purchasers of the receipt by the
Company of any notification with respect to (i) the suspension of the
qualification of the Securities for sale in any jurisdiction or (ii)
the initiation or threatening of any proceeding for such purpose.
(f) None of the Company, affiliates or any person acting on
its or their behalf will solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with
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any offer or sale of the Securities in the United States, except
pursuant to a registered public offering, whether an exchange offer or
shelf registration, as provided in the Registration Agreement.
(g) None of the Company, its affiliates or any person acting
on its or their behalf will engage in any directed selling efforts
with respect to the Securities within the meaning of Regulation S,
except pursuant to a registered public offering as provided in the
Registration Agreement, and the Company, its affiliates and each such
person acting on its or their behalf will comply with the offering
restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S.
(h) The Company shall, during any period in the two years
after the Closing Date in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, make available, upon request, to any
holder of the Securities in connection with any sale thereof and any
prospective purchaser of Securities from such holder the information
specified in Rule 144A(d)(4) under the Act. This covenant is intended
to be for the benefit of the holders, and the prospective purchasers
designated by such holders from time to time of the Securities.
(i) The Company will not, and will not permit any of its
affiliates to, resell any Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them.
(j) Neither the Company nor any affiliate will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Act) the offering of which security
will be considered integrated with the sale of the Securities in a
manner that would require the registration of the Securities under the
Act.
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(k) The Company shall use its best efforts in cooperation
with the Purchasers to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(l) The Company will not, for a period of 180 days following
the Execution Time without the prior written consent of Salomon
Brothers Inc (which consent shall not be unreasonably withheld),
offer, sell or contract to sell, grant any other option to purchase or
otherwise dispose of, directly or indirectly, or announce the offering
of, or file a registration statement for, any debt securities issued
or guaranteed by the Company, or enter into an agreement to do any of
the foregoing (other than the Offering or pursuant to the Registration
Agreement). The Company will not at any time offer, sell, contract to
sell or otherwise dispose of, directly or indirectly, any securities
under circumstances where such offer, sale, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities
Act or the safe harbor of Regulation S thereunder to cease to be
applicable to the offer and sale of the Securities as contemplated by
this Agreement and the Final Memorandum.
(m) The Company will apply the net proceeds from the sale of
the Securities in the manner set forth in the Final Memorandum under
the caption "Use of Proceeds".
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have furnished to the
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Purchasers the opinion of Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle,
special counsel for the Company, dated the Closing Date, to the effect
that:
(i) the Company and each of its Significant
Subsidiaries (as defined in the Indenture) organized under the
laws of the United States of America or any State thereof or
the District of Columbia (individually a "U.S. Significant
Subsidiary" and collectively the "U.S. Significant
Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with
full corporate power and authority to own its properties and
conduct its business as described in the Final Memorandum, and
is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material
properties or conducts material business, except where failure
to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) all the outstanding shares of capital stock of
each U.S. Significant Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the U.S.
Significant Subsidiaries are owned of record by the Company
either directly or through wholly owned subsidiaries free and
clear of any perfected security interest other than pursuant
to those certain pledge agreements dated as of April 4, 1996,
as amended, from the Company to and for the benefit of Norwest
Bank Colorado, National Association ("Norwest"), acting as
agent for itself and the other Secured Parties named therein,
entered into in connection with the loan
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agreement dated as of April 4, 1996, between the Company,
Norwest, The Chase Manhattan Bank, Xxxxxx Trust and Savings
Bank and NBD Bank (as amended, the "Loan Agreement"), and, to
the knowledge of such counsel, based solely upon a certificate
of a responsible officer of the Company, any other security
interests, claims, liens or encumbrances;
(iii) the Securities conform as to legal matters in
all material respects to the descriptions thereof contained in
the Final Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered by the Company, and, assuming due authorization,
execution and delivery by the Trustee, constitutes a legal,
valid and binding instrument enforceable against the Company
in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and general
principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court
before which any proceeding therefor may be brought); and the
Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
Purchasers pursuant to this Agreement, will constitute legal,
valid and binding obligations of the Company entitled to the
benefits of the Indenture (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and general
principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court
before which any proceeding therefor may be brought);
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(v) this Agreement and the Registration Agreement
have been duly authorized, executed and delivered by the
Company;
(vi) to such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental
agency or body is required for the performance by the Company
of its obligations hereunder or under the Indenture, the
Registration Agreement or the Securities, except such as may
be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Securities by the Purchasers (as to which such counsel need
express no opinion) and such other approvals (specified in
such opinion) as have been obtained and except such as may be
required under the Securities Act with respect to the
registration of the New Securities (or Registrable Securities
in the case of a Shelf Registration Statement, each as defined
in the Registration Agreement) pursuant to the Registration
Agreement and the transactions contemplated by the
Registration Agreement and except as may be required by the
securities or blue sky laws of the various states in
connection with the offer and sale of the New Securities (or
the Registrable Securities in the case of a Shelf Registration
Statement), and except for the qualification of the Indenture
relating to the New Securities (or Registrable Securities in
the case of a Shelf Registration) pursuant to the Trust
Indenture Act;
(vii) neither the issue and sale of the Securities,
the execution, delivery and performance by the Company of this
Agreement, the Indenture, the Registration Agreement or the
Securities, nor the fulfillment of the terms hereof or thereof
will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws
of the
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Company or the terms of any indenture or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which it is bound which is listed as an exhibit
to the Company's most recent Form 10-K (except that such
counsel need not express an opinion as to any covenant,
restriction or provision of any such agreement with respect to
financial covenants, ratios or tests relating to the financial
condition or results of operations of the Company or any of
its subsidiaries) or any judgment, order or decree known to
such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries;
(viii) based on the representations, warranties and
agreements of the Company in Sections 1 and 5 of this
Agreement, and the Purchasers in Section 4 of this Agreement,
it is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this
Agreement to register the Securities under the Act, it being
understood that no opinion is expressed as to any subsequent
reoffer or resale of any Security; and
(ix) the Indenture conforms as to form in all
material respects with the requirements of the Trust Indenture
Act, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
Such counsel shall also state that, in the course of
preparation by the Company of the Final Memorandum, such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, representatives of the Purchasers and representatives of
counsel for the Purchasers, at which
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conferences such counsel made inquiries of such officers,
representatives and accountants and discussed the contents of the
Final Memorandum and related matters and, although such counsel has
not independently verified and is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (other than the
statements set forth under "Description of Notes"), and noting that
they have relied as to materiality to a large extent upon statements
of directors, officers and other representatives of the Company, no
facts have come to the attention of such counsel which would lead such
counsel to believe that the Final Memorandum (other than the financial
or statistical information contained therein or omitted therefrom as
to which such counsel need not express any statement), as of its date
or on the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may, without
independent investigation, rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New
York, in the State of Delaware or the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Purchasers and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials, in each case
subject to the assumptions, qualifications, or limitations therein.
References to the Final Memorandum in this paragraph (a) include any
amendments or supplements thereof or thereto at the Closing Date.
Such counsel need express no opinion as to the enforcement of
any provision of the Registration
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Agreement or the Purchase Agreement providing for indemnification by
one party of any other party thereto.
For purposes of such opinion, such counsel may state that the
phrase "to our knowledge" means the actual conscious awareness of
information about either fact or law (depending on the context).
(b) The Purchasers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities,
the Indenture, the Final Memorandum (together with any amendment or
supplement thereof or thereto) and other related matters as the
Purchasers may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(c) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Chairman of the Board and
the Chief Executive Officer and the Executive Vice President-Finance,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any
amendment or supplement to the Final Memorandum and this Agreement and
that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied in
all material respects with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
pursuant to this Agreement at or prior to the Closing Date;
and
(ii) since the date of the most recent financial
statements included or incorporated by
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reference in the Final Memorandum (exclusive of any amendment
or supplement thereof or thereto), there has been no material
adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of
any amendment or supplement thereof or thereto).
(d) At the Execution Time and at the Closing Date, KPMG
Peat Marwick LLP shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning of
the Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants (the
"AICPA") and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Final Memorandum and reported on by them
comply in form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations that would apply to the Final
Memorandum if the Final Memorandum were a prospectus included
in a registration statement on Form S-1 under the Securities
Act;
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(ii) based upon the procedures detailed in such
letter with respect to the period subsequent to the date of
the latest audited financial statements included in the Final
Memorandum, including the reading of the minutes and inquiries
of certain officials of the Company who have responsibility
for the financial and accounting matters and certain other
limited procedures requested by the Purchasers and described
in detail in such letter, nothing has come to their attention
that causes them to believe that:
(A) any unaudited financial statements of the
Company included or incorporated by reference in the
Final Memorandum do not comply in form in all
material respects with applicable accounting
requirements of the Securities Act that would apply
to the Final Memorandum if the Final Memorandum were
a prospectus included in a registration statement on
Form S-1 under the Securities Act and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; or that such unaudited financial
statements are not, in all material respects, in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements of the Company included or incorporated by
reference in the Final Memorandum; or
(B) with respect to the period subsequent to
June 29, 1997, there were any increases, at a
specified date not more than five business days prior
to the date of the letter, in the total debt or other
non-current liabilities of the Company and its
subsidiaries or decreases in the stockholders' equity
of the Company or
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decreases in working capital of the Company and its
subsidiaries, as compared with the amounts shown on
the June 29, 1997 consolidated balance sheet included
in the Final Memorandum, or for the period from June
30, 1997, to such specified date there were any
decreases, as compared with the corresponding period
in the immediately preceding fiscal quarter in net
sales, gross profit-income before income taxes and
extraordinary items, net income or EBITDA, as defined
in the Indenture, except in all instances for changes
or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Purchasers; or
(C) the information included under the
headings "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" is not in
conformity with the disclosure requirements of
Regulation S-K that would apply to the Final
Memorandum if the Final Memorandum were a prospectus
included in a registration statement on Form S-1
under the Securities; and
(iii) they have performed certain other specified
procedures, at the request of the Purchasers, as a result of
which they determined that certain information of an
accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth or incorporated by reference in the
Final Memorandum agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of legal
interpretation.
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All references in this Section 6(d) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
date of the letter.
(e) The Company shall have furnished to the Purchasers the
opinion of Xxxxx Xxxxxx Xxxxxxx, special Netherlands counsel to the
Company, dated the Closing Date, to the effect that:
(i) DOVatron Ireland B.V. ("DOVatron Ireland") is a
company duly incorporated for an unlimited time and is validly
existing as a legal entity in the form of a private company
with limited liability and has the corporate power to conduct
its business within the limits of the objects clause in its
Articles of Association; and
(ii) all the issued shares of DOVatron Ireland have
been duly and validly authorized and issued and are fully
paid, and, except as otherwise set forth in the Final
Memorandum, all issued shares of DOVatron Ireland are
registered in the name of NortaVOD Corporation (except for one
ordinary share, which is held in trust for NortaVOD
Corporation) free and clear of any perfected security interest
and, to the knowledge of such counsel, based solely on
officer's certificates and searches attached to the opinion,
any other security interests, claims, liens or encumbrances.
(f) The Company shall have furnished to the Purchasers the
opinion of Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle, S.C., special Mexican
counsel for the Company, dated the Closing Date, to the effect that:
(i) DOVatron de Mexico, S.A. de C.V. has been duly
incorporated and is validly existing as a corporation under
the laws of Mexico, with full corporate power and authority to
own its properties and conduct its business as described
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in the Final Memorandum, and is duly qualified to do business
as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts
material business, except where failure to be so qualified or
to be in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
and
(ii) all the outstanding shares of capital stock of
DOVatron de Mexico, S.A. de C.V. have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of DOVatron de Mexico,
S.A. de C.V. are owned of record by the Company either
directly or through wholly owned subsidiaries free and clear
of any perfected security interest, other than pursuant to
those certain pledge agreements, dated as of April 4, 1996, as
amended, from The DII Group, Inc. to and for the benefit of
Norwest Bank Colorado, National Association ("Norwest"),
acting as agent for itself and the other Secured Parties named
therein, entered into in connection with the loan agreement
dated as of April 4, 1996, as amended, between the Company,
Norwest, The Chase Manhattan Bank, Xxxxxx Trust and Savings
Bank and NBD Bank, and, to the knowledge of such counsel,
based solely upon a certificate of a responsible officer of
DOVatron de Mexico, S.A. de C.V., any other security
interests, claims, liens or encumbrances.
(g) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Final Memorandum
(exclusive of any amendment or supplement thereof or thereto), there
shall not have been (i) any change or decrease specified in the letter
or letters referred to in paragraph (d) of this Section 6 or (ii) any
change, or any development
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involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the
reasonable judgment of the Purchasers, so material and adverse as to
make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto).
(h) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Securities Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(i) Prior to the Closing Date, the Company shall have
furnished to the Purchasers such further information, certificates and
documents as the Purchasers may reasonably request.
(j) At the Closing Date, the Company will have obtained all
waivers, amendments or consents in connection with the Loan Agreement
that are necessary for the Company to consummate the Offering.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchasers and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telefax confirmed in writing.
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The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & Xxxxx, counsel for the
Purchasers, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the
Closing Date.
7. Reimbursement of Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Purchasers, the Company will reimburse the Purchasers upon
demand for all reasonable and duly documented out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Purchaser, the directors, officers,
employees and agents of each Purchaser and each person who controls any
Purchaser within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (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 Memorandum, the Final
Memorandum or any information provided by the Company to any holder or
prospective purchaser of Securities pursuant to Section 5(h), 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 not misleading, and
agrees to
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24
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Memorandum or the Final Memorandum, or in any amendment
thereof or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchasers
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, its directors, officers, employees and
agents and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to the Purchasers, but only with reference to written information
furnished to the Company by or on behalf of each Purchaser specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto. This indemnity agreement will be in
addition to any liability which any Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum (or any amendment or supplement thereto) constitute
the only information furnished in writing by or on behalf of the several
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in
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25
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel, if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for (i) the fees and expenses of more than one
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26
separate firm (in addition to any local counsel) for the Purchasers, their
directors, officers, employees and agents, and all persons, if any, who control
the Purchasers within the meaning of the Act or the Exchange Act, and (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, officers, employees and agents and
each person, if any, who controls the Company within the meaning of the Act or
the Exchange Act. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Purchasers agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and the Purchasers
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by the Purchasers from the offering of the
Securities; provided, however, that in no case shall the Purchasers be
responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by the Purchasers hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Purchasers shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and of the Purchasers in connection with the
statements or omissions that resulted in such Losses as well as any other
relevant equitable
27
27
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering of the Securities (before deducting
expenses), and benefits received by the Purchasers shall be deemed to be equal
to the total purchase discounts and commissions, in each case as set forth on
the cover page of the Final Memorandum. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or the Purchasers. The Company and the
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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 8, each person who
controls a Purchaser within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of a Purchaser shall have the
same rights to contribution as such Purchaser, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
officer and director of the Company shall have the same rights to contribution
as the Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by a Purchaser. If any one or more Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement,
the remaining Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Securities set forth opposite the names of all the
remaining Purchaser(s)) the Securities that the defaulting Purchaser or
Purchasers agreed but failed to purchase; provided, however, that in the event
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28
that the aggregate principal amount of Securities that the defaulting Purchaser
or Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Securities set forth in Schedule I hereto, the remaining
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such non-defaulting
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any non-defaulting Purchaser or the Company. In the event
of a default by any Purchaser as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding seven days, as the Purchasers
shall determine in order that the required changes in the Final Memorandum or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Purchaser of its liability, if any,
to the Company or any non-defaulting Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by notice given to
the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended
by the Commission or the National Association of Securities Dealers Automated
Quotation National Market System, (ii) trading in securities generally on the
New York Stock Exchange or the National Association of Securities Dealers
Automated Quotation National Market System shall have been suspended or limited
or minimum prices shall have been established on either of such Exchange or
Market System, (iii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the reasonable judgment of the
Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Memorandum (exclusive
of any amendment or supplement thereof or thereto).
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11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchasers set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchasers or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or telecopied and confirmed to them in writing, care of Salomon
Brothers Inc, at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
telecopier no.: (000) 000-0000, attention of Legal Department; or, if sent to
the Company, will be mailed, delivered or telecopied and confirmed to it in
writing at 0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx, 00000,
telecopier no.: (000) 000-0000, attention of Xx. Xxxxxx X. Xxxxxx, with a
copy to Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle, 000 Xxxx Xxxxxx, Xxx Xxxx, XX,
00000, telecopier no. (000) 000-0000, attention of Xxxxxxx X. Xxxxxxxx, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York without
reference to principles of conflict of law.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute
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30
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and the several Purchasers.
Very truly yours,
THE DII GROUP, INC.
By
--------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
BT ALEX.XXXXX INCORPORATED
By SALOMON BROTHERS INC
By
---------------------------------
Name:
Title:
For themselves and the other
Purchasers named in Schedule I
to the foregoing Agreement.
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SCHEDULE I
Principal Amount
of Securities
Purchasers to be Purchased
---------- ---------------
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . $ 96,000,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation . . . . . . . . . . . . . . . . . 36,000,000
BT Alex. Xxxxx Incorporated . . . . . . . . . . . . . . . . 18,000,000
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000,000
33
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(a) The Securities have not been and will not be registered
under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents and agrees that,
except as otherwise permitted by Section 4(a)(i) of the Agreement to which this
is an exhibit, it has offered and sold the Securities, and will offer and sell
the Securities, (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, each Purchaser represents and agrees that neither
it, nor any of its affiliates nor any person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and that it and they have complied and will comply with the
offering restrictions requirement of Regulation S. Each Purchaser agrees that,
at or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and September 19, 1997,
34
except in either case in accordance with Regulation S, Rule
144A or other available exemption from registration under the
Securities Act. Terms used above have the meanings given to
them by Regulation S."
(b) Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.
(c) Terms used in this Exhibit have the meanings given to
them by Regulation S.
