Exhibit 10.44
COOPERATIVE COMPUTING, INC.
$157,000,000
10 1/2% Senior Notes due 2011
PURCHASE AGREEMENT
June 13, 2003
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cooperative Computing, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
$157,000,000 aggregate principal amount of the Company's 10 1/2% Senior Notes
due 2011 (the "Notes") (the "Offering"). The Notes will be issued pursuant to an
indenture dated June 27, 2003 (the "Indenture") between the Company, the
Guarantors named therein and Xxxxx Fargo Bank Minnesota, N.A., as trustee (the
"Trustee"). The Notes will be guaranteed on an unsecured senior basis (the
"Guarantees," and together with the Notes, the "Securities") by each of the
Company's direct and indirect subsidiaries identified on Schedule I hereto (the
"Guarantors," and together with the Company, the "Issuers"). The Issuers hereby
confirm their agreement with X.X. Xxxxxx Securities Inc. (the "Initial
Purchaser") concerning the purchase of the Securities from the Issuers by the
Initial Purchaser.
The Securities will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemptions therefrom. The Company has prepared a
preliminary offering memorandum dated May 29, 2003 (the "Preliminary Offering
Memorandum") and will prepare a final offering memorandum dated the date hereof
(the "Final Offering Memorandum") setting forth information concerning the
Company and the Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Final Offering Memorandum will be, delivered by the
Issuers to the Initial Purchaser pursuant to the terms of this Agreement. Any
references herein to the Preliminary Offering Memorandum and the Final Offering
Memorandum shall be deemed to include all amendments and supplements thereto and
any documents incorporated by reference therein, unless otherwise noted. The
Issuers hereby confirm that they have
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authorized the use of the Preliminary Offering Memorandum and the Final Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchaser in accordance with Section 2.
Holders of the Notes (including the Initial Purchaser and its direct and
indirect transferees) will be entitled to the benefits of an Exchange and
Registration Rights Agreement substantially in the form attached hereto as Annex
A (the "Registration Rights Agreement"), pursuant to which the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior notes of
the Company and guarantees of the Guarantors (together, the "Exchange
Securities") which are identical in all material respects to the Notes and the
Guarantees, respectively (except that the Exchange Securities will not contain
terms with respect to transfer restrictions), and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement").
Concurrently with the Offering, the Company intends to:
(i) purchase any and all of its 9% senior subordinated notes due
2008 (the "Tender Offer") and to solicit consents from the holders of its 9%
senior subordinated notes to amend the indenture (the "Old Indenture") governing
such notes (the "Consent Solicitation"), pursuant to which the Company and X.X.
Xxxxxx Securities, Inc. have entered into that certain dealer manager agreement
(the "Dealer Manager Agreement") dated May 30, 2003;
(ii) repay all amounts due under its existing credit facility
("Existing Facility Repayment");
(iii) amend and restate its current credit facility to provide for
borrowings of up to $15.0 million (the "Credit Facility");
(iv) distribute up to $30.0 million to its direct parent, Cooperative
Computing Holding Company, Inc. ("Holding"), to enter into an agreement (the
"Xxxxxx Repurchase and Release Agreement") to purchase all of the outstanding
shares of common stock of Holding owned by, and to settle certain litigation and
enter into certain other agreements with, Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx,
Xx. (the "Xxxxxx Repurchase and Release"); and
(v) purchase all of the issued and outstanding membership interests
of XX Xxxx, LLC, which owns 1,750,000 shares of common stock of Internet
Autoparts, Inc., pursuant to a stock purchase agreement (the "IAP Purchase
Agreement") for aggregate consideration of $1.82 million (the "IAP Purchase";
together with the Tender Offer and Consent Solicitation, the Existing Facility
Repayment, the Credit Facility, the Xxxxxx Repurchase and Release and the IAP
Purchase, the "Transactions").
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Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Final Offering Memorandum.
1. Representations, Warranties and Agreements of the Issuers. The
Issuers represent and warrant, jointly and severally, to, and agree with, the
Initial Purchaser on the date hereof and the Closing Date that:
(a) The Preliminary Offering Memorandum, as of its date did
not, and the Final Offering Memorandum, as of its date and as of the
Closing Date (as defined in Section 3), did not (or will not) contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Issuers make no representation or warranty as to
information contained in or omitted from the Preliminary Offering
Memorandum or the Final Offering Memorandum in reliance upon and in
conformity with written information furnished to the Issuers by or on
behalf of the Initial Purchaser relating to the Initial Purchaser
specifically for use therein (the "Initial Purchaser's Information").
The parties hereto acknowledge and agree that, for all purposes of this
Agreement, the Initial Purchaser's Information consists solely of the
statements relating to the Initial Purchaser in the third paragraph,
fifth and sixth sentence of the eighth paragraph, and tenth paragraph
under the heading "Plan of distribution" in the Final Offering
Memorandum.
(b) The Preliminary Offering Memorandum as of its date
contained, and the Final Offering Memorandum, as of its date and as of
the Closing Date, contained and will contain all of the information
that, if requested by a prospective purchaser of the Securities, would
be required to be provided to such prospective purchaser pursuant to
Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchaser contained in Section 2 and its
compliance with the agreements set forth herein, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial
Purchaser and the offer, resale and delivery of the Securities by the
Initial Purchaser in the manner contemplated by this Agreement and the
Final Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
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(d) The Issuers and each of their respective subsidiaries
have been duly incorporated and are validly existing as organizations in
good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Issuers
and their respective subsidiaries taken as a whole (a "Material Adverse
Effect").
(e) The authorized capital stock of the Company consists of
1,000 shares of common stock, par value $.01 per share, and is owned by
Holding. All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Issuers, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party (other than liens and security
interests created pursuant to the Credit Facility and the related
guarantees and security documents) or any document or agreements
contemplated thereby, the Indenture or applicable law.
(f) The Issuers have all requisite corporate power and
authority to execute and deliver, to the extent each is a party thereto,
this Agreement, the Indenture, the Registration Rights Agreement, the
Credit Facility, the Dealer Manager Agreement, the Xxxxxx Repurchase and
Release Agreement, the IAP Purchase Agreement, the Supplemental
Indenture (as defined below), the Securities and the Exchange Securities
(collectively, the "Transaction Documents") and to perform their
obligations hereunder and thereunder.
(g) This Agreement has been duly authorized, executed and
delivered by the Issuers.
(h) The Registration Rights Agreement has been duly
authorized by the Issuers, to the extent each is a party thereto, and,
when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding
agreement of the Issuers, enforceable against the Issuers in accordance
with its terms,
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except (i) to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law) and (ii) to the extent that the enforceability of rights to
indemnification and contribution thereunder may be limited by federal or
state securities laws or regulations or the public policy underlying
such laws or regulations.
(i) The Indenture has been duly authorized by the Issuers,
to the extent each is a party thereto, and, when duly executed and
delivered in accordance with its terms by each of the parties thereto,
will constitute a valid and legally binding agreement of the Issuers
enforceable against the Issuers in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(j) The Notes have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in
the Indenture and paid for as provided herein, will be duly and validly
issued and outstanding and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except
to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(k) The Guarantees have been duly authorized by each of the
Guarantors and when duly executed and delivered as provided in the
Indenture and when the Notes are paid for and delivered as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of each Guarantor
entitled to the benefits of the Indenture and enforceable against each
such Guarantor in accordance with their terms, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered
in a proceeding in equity or at law).
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(l) The Exchange Securities have been duly authorized by the
Issuers to the extent each will be an obligor thereunder, and, when duly
executed, authenticated, issued and delivered as provided in the
Indenture and the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and legally
binding obligations of the Issuers entitled to the benefits of the
Indenture and enforceable against the Issuers in accordance with their
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law).
(m) The amendment to the Old Indenture (the "Supplemental
Indenture") has been duly authorized by the Company, and, if and when
duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law).
(n) The Credit Facility has been duly authorized by the
Issuers, to the extent each is a party thereto, and, when duly executed
and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms,
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law), other than set-off provisions contained therein, which may not be
enforceable.
(o) The Xxxxxx Repurchase and Release Agreement has been
duly authorized, executed and delivered by the Company and Holding and
constitutes a valid and legally binding agreement of the Company and
Holding, enforceable against the Company and Holding in accordance with
its terms, except (i) to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding
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in equity or at law) and (ii) to the extent that the enforceability of
rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or regulations or the public policy
underlying such laws or regulations.
(p) The IAP Purchase Agreement has been duly authorized by
the Company and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except (i) to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered
in a proceeding in equity or at law) and (ii) to the extent that the
enforceability of rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or regulations or the
public policy underlying such laws or regulations.
(q) The execution, delivery and performance by the Issuers
and each of their respective subsidiaries of each of the Transaction
Documents, to the extent each is a party thereto, the issuance,
authentication, sale and delivery of the Securities by the Issuers and
compliance by such Issuers with the terms thereof and the consummation
by the Issuers and their respective subsidiaries, as applicable, of the
transactions contemplated by the Transaction Documents do not and will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or, except as permitted
by the Transaction Documents, result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Issuers or any of their respective subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Issuers or any of their respective subsidiaries
are parties or by which the Issuers or any of their respective
subsidiaries are bound or to which any of the property or assets of the
Issuers or any of their respective subsidiaries are subject, except for
any such conflict, breach, violation, default, lien, charge or
encumbrance that has been waived and except for any such conflict,
breach, violation, default, lien, charge or encumbrance that could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect or any material adverse effect on the ability of the
Issuers to perform their respective obligations under the Transaction
Documents; nor will such actions result in any violation of the
provisions of the charter or bylaws of the Issuers or
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result in any violation of any of their respective subsidiaries or any
statute or any order, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over the Issuers or any
of their respective subsidiaries or any of their properties or assets
except such violation of any statute or any order, rule or regulation
that could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and, except for such consents,
approvals, authorizations, registrations or qualifications which have
been obtained or as may be required under (i) applicable Blue Sky or
securities laws in connection with the purchase and resale of the
Securities by the Initial Purchaser, (ii) the Trust Indenture Act in
connection with the Exchange Securities or (iii) the Securities Act and
state Blue Sky laws or securities laws in connection with the actions
contemplated by the Registration Rights Agreement; no material consent,
approval, authorization or order of, or filing or registration with, any
such court or arbitrator or governmental agency or body is required for
the execution, delivery and performance by the applicable Issuers of
each of the Transaction Documents, the issuance, authentication, sale
and delivery by the Issuers of the Securities and compliance by the
Issuers with the terms thereof and the consummation by the Issuers of
the transactions contemplated by the Transaction Documents, except for
such consents, approvals, authorizations, filings, registrations or
qualifications as may be required to be obtained or made under the
Securities Act and applicable state securities laws as provided in the
Registration Rights Agreement.
(r) Each Transaction Document will conform in all material
respects to the description thereof contained in the Final Offering
Memorandum.
(s) (i) Ernst & Young LLP are independent public accountants
with respect to the Issuers and their respective subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder, (ii) the historical financial
statements (including the related notes) contained in the Preliminary
Offering Memorandum and the Final Offering Memorandum have been prepared
in conformity with generally accepted accounting principles consistently
applied throughout the periods covered thereby and fairly present, in
all material respects, the financial condition and the results of
operations of the entities purported to be covered thereby for the
respective periods indicated except as otherwise disclosed therein and
(iii) the assumptions underlying the pro forma financial information
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included in the Preliminary Offering Memorandum and the Final Offering
Memorandum include all assumptions required to give effect to the
transactions and events described in the notes thereto, are reasonable
and are set forth in the Preliminary Offering Memorandum and the Final
Offering Memorandum and the pro forma adjustments give proper effect to
those assumptions and reflect the proper application of those
adjustments to the applicable historical financial statements included
in the Preliminary Offering Memorandum and the Final Offering
Memorandum. The financial information contained in the Preliminary
Offering Memorandum and the Final Offering Memorandum under the headings
"Summary historical consolidated financial and operating data,"
"Capitalization," "Selected consolidated financial data," and
"Management's discussion and analysis of financial condition and results
of operations" is derived from the accounting records of the entities
purported to be covered thereby and fairly present in all material
respects the information purported to be shown thereby.
(t) There are no legal or governmental proceedings pending
to which the Issuers or any of their respective subsidiaries is a party
or of which any property or assets of the Issuers or any of their
respective subsidiaries or affiliates is the subject which, singularly
or in the aggregate, if determined adversely to the Issuers or any of
their respective subsidiaries or affiliates, could reasonably be
expected to have a Material Adverse Effect; and to the best knowledge of
the Issuers, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(u) No injunction, restraining order or order of any nature
by any federal or state court of competent jurisdiction has been issued
with respect to the Issuers or any of their respective subsidiaries
which would prevent or suspend the issuance or sale of the Securities or
the use of the Final Offering Memorandum in any jurisdiction; no action,
suit or proceeding is pending against or, to the best knowledge of the
Issuers, threatened against or affecting the Issuers or any of their
respective subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the
issuance of the Securities or in any manner draw into question the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto.
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(v) None of the Issuers or any of their respective
subsidiaries is (i) in violation of its charter or bylaws, (ii) in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets
is subject or (iii) in violation in any material respect of any
applicable law, ordinance, court decree, governmental rule or regulation
to which it or its material property or assets may be subject.
(w) The Issuers and each of their respective subsidiaries
possess all licenses, orders, certificates, authorizations, approvals
and permits issued by, and have made all declarations, applications,
reports, instruments, information and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies that are
necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the Final
Offering Memorandum and such declarations, applications, reports,
instruments, information and filings are true, correct and complete in
all material respects, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse
Effect, and neither any of the Issuers nor any of their respective
subsidiaries has received notification of any revocation or modification
of any such license, certificate, authorization or permit that is
generally renewable in the ordinary course or has any reason to believe
that any such license, certificate, authorization or permit will not be
renewed in the ordinary course.
(x) None of the Issuers or any of their respective
subsidiaries is an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940, as
amended (the "Investment Company Act"), nor are any of them a closed-end
investment company required to be registered, but not registered,
thereunder; and none of the Issuers is and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Offering Memorandum, none of the
Issuers will be, an "investment company" as defined in the Investment
Company Act.
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(y) The Issuers and each of their respective subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(z) The Issuers and each of their respective subsidiaries
have insurance covering their respective properties, operations,
personnel and businesses, which insurance is in amounts and insures
against such losses and risks as are in the Issuers' opinion adequate to
protect the Issuers and their respective subsidiaries and their
respective businesses. None of the Issuers or any of their respective
subsidiaries have received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
(aa) The Issuers and each of their respective subsidiaries
own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses as
described in the Final Offering Memorandum; and the conduct of their
respective businesses does not conflict in any material respect with,
and the Issuers and their respective subsidiaries have not received any
notice of any claim of conflict with, any such rights of others.
(bb) The Issuers and each of their respective subsidiaries
have good and marketable title in fee simple to, or have valid rights to
lease or otherwise use, all items of real and personal property which
are material to the business of the Issuers and their respective
subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects other than (i) liens and encumbrances
granted pursuant to the Credit Facility and (ii) liens, encumbrances and
defects that do not materially interfere with the use made and proposed
to be made of such
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property by the Issuers and their respective subsidiaries or could not
reasonably be expected to have a Material Adverse Effect.
(cc) No labor disturbance by or dispute with the employees of
the Issuers or any of their respective subsidiaries exists or, to the
best knowledge of the Issuers, is imminent, which could reasonably be
expected to have a Material Adverse Effect.
(dd) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release or
threatened release of any kind of toxic or other wastes or other
hazardous substances by, due to or caused by the Issuers or any of their
respective subsidiaries (or, to the best knowledge of the Issuers, any
other entity (including any predecessor) for whose acts or omissions the
Issuers or any of their respective subsidiaries are or could reasonably
be expected to be liable) upon any property now or previously owned or
leased by the Issuers or any of their respective subsidiaries, or upon
any other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any
statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any
liability except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and liabilities,
a Material Adverse Effect; and there has been no disposal, discharge,
emission or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Issuers have
knowledge, except for any such disposal, discharge, emission or other
release of any kind which would not have, singularly or in the aggregate
with all such disposal, discharge, emission and other release, a
Material Adverse Effect.
(ee) No "prohibited transaction" (as defined in Section 406
of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect to
which the 30-day notice requirement under Section 4043 of ERISA has been
waived) has occurred with respect to any employee benefit plan of the
Issuers or any of their respective subsidiaries which could reasonably
be expected to have a Material Adverse Effect; each such employee
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benefit plan is in compliance in all material respects with applicable
law, including ERISA and the Code; the Issuers and each of their
respective subsidiaries have not incurred and do not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Issuers or any of their
respective subsidiaries would have any liability; and each such pension
plan that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
(ff) On the Closing Date, the Company and its subsidiaries,
taken as a whole, (after giving effect to the Transactions) will be
Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the
Company and its subsidiaries is not less than the total amount of the
liabilities of the Company and its subsidiaries on their total existing
debts and liabilities (including contingent liabilities); (ii) the
Company and its subsidiaries are able to realize upon their assets and
pay their debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of
business; (iii) assuming consummation of the issuance of the Securities
as contemplated by this Agreement and the Final Offering Memorandum, the
Company and its subsidiaries are not incurring debts or liabilities
beyond their ability to pay as such debts and liabilities mature; (iv)
the Company and its subsidiaries are not engaged in any business or
transaction, and does not propose to engage in any business or
transaction, for which their property would constitute unreasonably
small capital after giving due consideration to the prevailing practice
in the industry in which the Company is engaged; and (v) the Company and
its subsidiaries are not otherwise insolvent under applicable federal or
state laws.
(gg) Except as described in the Final Offering Memorandum,
there are no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable for,
or agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership
interest in the Issuers or any of their respective subsidiaries.
(hh) No holder of securities of the Issuers or any of their
respective subsidiaries will be entitled to have such securities
registered
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under the registration statements required to be filed by the Issuers
pursuant to the Registration Rights Agreement, to the extent each is a
party thereto, other than as expressly permitted thereby or that has
been waived.
(ii) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Preliminary Offering Memorandum and the Final Offering
Memorandum has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(jj) Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and
market-related data included in the Preliminary Offering Memorandum and
the Final Offering Memorandum is not based on or derived from sources
that are reliable and accurate in all material respects.
(kk) None of the proceeds of the sale of the Securities will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(ll) Neither any of the Issuers nor any Affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")) has directly, or through any agent (provided that no representation
is made as to the Initial Purchaser or any Person acting on its behalf):
(i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of any "security" (as defined in the Securities
Act) which sale, offer, solicitation or negotiation is or will be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general advertising
(as those terms are used in Regulation D) in connection with the
offering of the Securities.
(mm) When the Securities are delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the
Issuers or any of their respective subsidiaries that are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or
-15-
that are quoted in a United States automated inter-dealer quotation
system.
(nn) None of the Issuers or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D), nor any person
acting on behalf of any of them (other than the Initial Purchaser) (i)
has, within the six-month period prior to the date hereof, offered or
sold in the United States or to any U.S. person (as such terms are
defined in Regulation S under the Securities Act ("Regulation S")) the
Securities or any security of the same class or series as the Securities
(A) in the United States by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S, by means of any directed selling
efforts within the meaning of Rule 902(b) of Regulation S. The Issuers
and their respective affiliates, and any person acting on behalf of any
of them (other than the Initial Purchaser) have complied and will comply
with the offering restrictions requirement of Regulation S. The Issuers
have not entered and will not enter into any contractual arrangement
with respect to the distribution of the Securities except for this
Agreement and the Registration Rights Agreement, to the extent each is
party thereto.
(oo) Since March 31, 2003, except as set forth in the Final
Offering Memorandum (i) both before and after giving effect to the
Transactions, there has been no material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs,
management or business prospects of the Issuers, whether or not arising
in the ordinary course of business, (ii) none of the Issuers, nor any of
their respective subsidiaries has incurred any liability or obligation,
direct or indirect, absolute or contingent, other than in the ordinary
course of business, which would, singly or in the aggregate, have a
Material Adverse Effect, (iii) neither any of the Issuers nor any of
their respective subsidiaries has entered into any material transaction
other than in the ordinary course of business and (iv) there has not
been any change in the capital stock or long-term debt of any of the
Issuers or any of their respective subsidiaries, or any dividend or
distribution of any kind declared, paid or made by any of the Issuers or
any of their respective subsidiaries on any class of its capital stock.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions
-16-
set forth herein, the Issuers agree, severally and not jointly, to issue and
sell to the Initial Purchaser, and the Initial Purchaser agrees, to purchase
from the Issuers, all of the Securities at a purchase price equal to 98.692% of
the principal amount thereof. In connection with the issuance and sale of the
Securities hereunder, the Issuers shall pay to the Initial Purchaser on the
Closing Date a fee equal to 2.75% of the principal amount of Securities
purchased by the Initial Purchaser hereunder (the "Initial Purchaser's Fee");
provided that in the event that more than $76.6 million of the Company's 9%
senior subordinated notes due 2008 are tendered and not withdrawn pursuant to
the Tender Offer, the Issuer shall not be required to pay the Initial
Purchaser's Fee until the 45th day following the Closing Date. No Issuer shall
be obligated to deliver any of the Securities except upon payment for all of the
Securities to be purchased from the Issuers as provided herein.
(b) The Initial Purchaser has advised the Issuers that it proposes
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Final Offering Memorandum. The Initial Purchaser
represents and warrants to, and agrees with, the Issuers that (i) it is
purchasing the Securities pursuant to a private sale exemption from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (iii) it has solicited and
will solicit offers for the Securities only from, and has offered or sold and
will offer, sell or deliver the Securities, as part of its initial offering,
only (A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S.
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, the Initial Purchaser represents, warrants and agrees that:
(i) The Securities have not been 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 pursuant to an exemption from, or
in transactions not subject to, the registration requirements of the
Securities Act.
(ii) The Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of its distribution at any
time and (B) otherwise
-17-
until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, only in accordance with Regulation S or
Rule 144A or any other available exemption from registration under the
Securities Act.
(iii) Neither the Initial Purchaser nor any of its affiliates
nor any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts (as defined in Regulation S) with
respect to the Securities, and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, the Initial Purchaser will have sent to each
distributor, dealer or other 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, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering of the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act.
Terms used above have the meanings given to them by Regulation S."
(v) The Initial Purchaser has not 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 Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) The Initial Purchaser agrees that, prior to or simultaneously
with the confirmation of sale by the Initial Purchaser to any purchaser of
any of the Securities purchased by the Initial Purchaser from the applicable
Issuers pursuant hereto, the Initial Purchaser shall furnish to that
purchaser a copy of the Final Offering Memorandum (and any amendment or
supplement thereto that the Issuers shall have furnished to the Initial
Purchaser prior to the date of such confirmation of sale), but excluding any
document incorporated by reference therein. In addition to the foregoing,
the Initial Purchaser acknowledges and agrees that the Issuers and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant
to Sections 5(d) and 5(e), counsel for the Issuers and for the Initial
Purchaser, respectively, may rely upon the accuracy of the representations
and warranties of the Initial Purchaser and their
-18-
compliance with their agreements contained in this Section 2, and the
Initial Purchaser hereby consents to such reliance.
(e) The Issuers acknowledge and agree that the Initial Purchaser may
sell Securities to any affiliate of the Initial Purchaser and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Weil, Gotshal &
Xxxxxx LLP, Dallas, Texas or at such other place as shall be agreed upon by the
Initial Purchaser and the Issuers, at 9:00 A.M., Dallas time, on June 27, 2003,
or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchaser and the Issuers
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchaser of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchaser hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as the Initial Purchaser shall have requested in writing not less
than two full business days prior to the Closing Date. The Issuers agree to make
one or more global certificates evidencing the Securities available for
inspection by the Initial Purchaser in New York, New York at least 24 hours
prior to the Closing Date.
4. Further Agreements of the Issuers. The Issuers, jointly and
severally, agree with the Initial Purchaser:
(a) to advise the Initial Purchaser promptly and, if
requested, confirm such advice in writing, of the happening of any event
which makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Final Offering Memorandum untrue or which
requires the making of any additions to or changes in the Preliminary
Offering Memorandum or the Final Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; to advise the Initial Purchaser promptly of any order
preventing or suspending the use of the Preliminary Offering Memorandum
or the Final Offering Memorandum, of any suspension of the qualification
of the Securities for offering or sale in any jurisdiction
-19-
and of the initiation or threatening of any proceeding for any such
purpose; and to use its reasonable best efforts to prevent the issuance
of any such order preventing or suspending the use of the Preliminary
Offering Memorandum or the Final Offering Memorandum or suspending any
such qualification and, if any such suspension is issued, to obtain the
lifting thereof at the earliest possible time;
(b) to furnish to the Initial Purchaser, without charge, as
many copies of the Preliminary Offering Memorandum and the Final
Offering Memorandum (and any amendments or supplements thereto) as may
be reasonably requested; provided that, in the event of any amendment or
supplement to the Final Offering Memorandum, the Initial Purchaser shall
have been given a reasonable opportunity to comment thereon, and copies
thereof shall have been delivered to the Initial Purchaser reasonably in
advance of the Closing Date;
(c) prior to making any amendment or supplement to the
Preliminary Offering Memorandum or the Final Offering Memorandum, to
furnish a copy thereof to the Initial Purchaser and counsel for the
Initial Purchaser and not to effect any such amendment or supplement to
which the Initial Purchaser shall reasonably object by notice to the
Issuers after a reasonable period of review, which shall not be in any
case longer than five business days after receipt of such copy;
(d) if, at any time prior to completion of the initial
resale of the Securities by the Initial Purchaser, any event shall occur
or condition exist as a result of which it is necessary, in the opinion
of counsel for the Initial Purchaser or counsel for the Issuers, to
amend or supplement the Final Offering Memorandum in order that the
Final Offering Memorandum will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein necessary in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Final Offering Memorandum to comply with applicable law, to promptly
prepare such amendment or supplement as may be necessary to correct such
untrue statement or omission so that the Final Offering Memorandum, as
so amended or supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request of
-20-
such holders or such prospective purchasers, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act,
unless the Issuers are then subject to and in compliance with Section 13
or 15(d) of the Exchange Act;
(f) for a period of three years following the Closing Date,
to furnish to the Initial Purchaser copies of any annual reports,
quarterly reports and current reports filed by the Issuers with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Issuers to the Trustee or
to the holders of the Securities pursuant to the Indenture or the
Exchange Act or any rule or regulation of the Commission thereunder;
(g) to use their reasonable best efforts to qualify the
Securities for sale under the state securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser may reasonably designate and to
continue such qualifications in effect for so long as required for the
distribution of the Securities; provided, however, that the Issuers and
their respective subsidiaries shall not be obligated to qualify as a
foreign corporation in any jurisdiction where it is not then qualified
or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so
subject.
(h) to use their reasonable best efforts to assist the
Initial Purchaser in arranging for the Securities to be designated
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through the
Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which could
be integrated with the sale of the Securities in a manner which would
require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates (as such term is defined in
Rule 501(B) of Regulation D) not to, and not to authorize or
-21-
knowingly permit any person acting on their behalf to, (i) solicit any
offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising within the meaning of
Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or (ii) engage in any
directed selling efforts within the meaning of Regulation S, and all
such persons will comply with the offering restrictions requirement of
Regulation S; and not to 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 to cease to be
applicable to the offering and sale of the Securities as contemplated by
this Agreement and the Final Offering Memorandum;
(k) for a period of 90 days from the date hereof, not to
offer for sale, sell, contract to sell or otherwise dispose of, directly
or indirectly, or file a registration statement (except as required by
the Registration Rights Agreement) for, or announce any offer, sale,
contract for sale of or other disposition of any debt securities issued
or guaranteed by the Issuers or any of their respective subsidiaries
(other than the Securities or the Exchange Securities) without the prior
written consent of the Initial Purchaser (which consent may not be
unreasonably withheld);
(l) until the earlier of (i) the date that all the Notes
have either been exchanged or registered under a shelf registration
statement in accordance with the terms of the Registration Rights
Agreement and (ii) two years after the Closing Date, without the prior
written consent of the Initial Purchaser, not to, and not permit any of
their affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Notes that have been reacquired by them, except for
Notes purchased by the Issuers or any of their affiliates and resold in
a transaction registered under the Securities Act;
(m) in connection with the offering of the Securities, until
the Initial Purchaser shall have notified the Issuers of the completion
of the resale of the Securities, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act), not to,
either alone or with one or more other persons, bid for or purchase, for
any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make
-22-
bids or purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Securities;
(n) to consummate the Tender Offer and, pursuant thereto,
repurchase all of the outstanding 9% senior subordinated notes due 2008
which are tendered for repurchase and not withdrawn thereunder;
(o) to consummate the repurchase contemplated by the Xxxxxx
Repurchase and Release Agreement within 15 days of the Closing Date;
(p) to not take any action prior to the Closing Date which
would require the Final Offering Memorandum to be amended or
supplemented pursuant to Section 4(d); and
(q) to apply the net proceeds from the sale of the
Securities as set forth in the Final Offering Memorandum under the
heading "Use of proceeds."
5. Conditions to Closing. The obligations of the Initial Purchaser
hereunder are subject to the accuracy, on and as of the date hereof and the
Closing Date, of the representations and warranties of the Issuers contained
herein, to the accuracy of the statements of the Issuers and their officers made
in any certificates delivered pursuant hereto, to the performance by the Issuers
of their obligations hereunder, and to each of the following additional terms
and conditions; provided that subsection (t) of this Section 5 shall also be a
condition to the obligations of each of the Issuers hereunder:
(a) The Final Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to
the Initial Purchaser as promptly as practicable on or following the
date of this Agreement or at such other date and time as to which the
Initial Purchaser may designate; and no stop order suspending the sale
of the Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) The Initial Purchaser shall not have discovered and
disclosed to the Issuers on or prior to the Closing Date that the Final
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which is material or omits to state any fact
which, in the opinion of counsel to the Initial Purchaser, is material
and is necessary to make the statements therein not misleading.
-23-
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of each of the
Transaction Documents, the Preliminary Offering Memorandum and the Final
Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall
be reasonably satisfactory in all material respects to the Initial
Purchaser, and the Issuers shall have furnished to the Initial Purchaser
all documents and information that it or its counsel may reasonably
request to enable them to pass upon such matters.
(d) Weil, Gotshal & Xxxxxx LLP shall have furnished to the
Initial Purchaser their written opinion, as counsel for the Issuers,
addressed to the Initial Purchaser and dated the Closing Date,
substantially to the effect set forth in Annex B hereto.
(e) The Initial Purchaser shall have received from Xxxxxx
Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchaser, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchaser may reasonably require, and the Issuers shall have
furnished to such counsel such documents, certificates and information
as they reasonably request for the purpose of enabling them to pass upon
such matters.
(f) With respect to the letter (the "Initial Letter") of
Ernst & Young LLP delivered to the Initial Purchaser concurrently with
the execution of this Agreement (which letter shall be in form and
substance reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser), the Issuers shall have caused Ernst & Young
LLP to furnish to the Initial Purchaser a letter (the "Bring-Down
Letter") addressed to the Initial Purchaser and dated the Closing Date
(i) confirming that they are independent public accountants with respect
to the Company and its subsidiaries within the meaning of Rule 101 of
the Code of Professional Conduct of the AICPA and its interpretations
and rulings thereunder, (ii) stating, as of the date of the Bring-Down
Letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Final Offering Memorandum, as of a date not more than
two business days prior to the date of the Bring-Down Letter), that the
conclusions and findings of such accountants with respect to the
financial information and other matters covered by the Initial Letter
are accurate and (iii) confirming in all material respects the
conclusions and findings set forth in the Initial Letter.
-24-
(g) Each of the Issuers shall have furnished to the Initial
Purchaser a certificate, dated the Closing Date, of a senior executive
officer of such Issuer (acting in his or her capacity as an officer of
such Issuer and not as an individual) stating that (A) such officer has
reviewed the Final Offering Memorandum, (B) in his or her opinion, the
Final Offering Memorandum, as of its date, did not include any untrue
statement of a material fact and did not omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and since the
date of the Final Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Final
Offering Memorandum so that the Final Offering Memorandum (as so amended
or supplemented) would not include any untrue statement of a material
fact and would not omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading and (C) to the best of his or her
knowledge, as of the Closing Date, the representations and warranties of
such Issuer in this Agreement are true and correct in all material
respects, such Issuer has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its
part to be performed or satisfied hereunder on or prior to the Closing
Date in all material respects, and since the date hereof or subsequent
to the date of the most recent financial statements contained in the
Final Offering Memorandum, there has been no material adverse change in
the financial position or results of operations of the Issuers and their
respective subsidiaries taken as a whole, or any material change, or any
development including a prospective material change in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Issuers and their respective subsidiaries taken as a
whole, except as set forth in the Final Offering Memorandum.
(h) The Initial Purchaser shall have received on and as of
the Closing Date satisfactory evidence of the good standing of the
Company and its subsidiaries in their respective jurisdictions of
organization and, as applicable, their good standing in the
jurisdictions listed on Schedule II hereto, in each case in writing or
any standard form of telecommunication, from the appropriate
governmental authorities of such jurisdictions.
(i) The Initial Purchaser shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of each Issuer.
-25-
(j) The Indenture shall have been duly executed and
delivered by the Issuers and the Trustee, the Notes shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee and the Guarantees shall have been duly executed and delivered
by the Guarantors.
(k) The Company shall have received all requisite consents
under the Consent Solicitation to amend the Old Indenture and, such
consents being in full force and effect as of the date hereof, the
Supplemental Indenture shall have been duly executed and delivered by
the parties thereto.
(l) The Xxxxxx Repurchase and Release Agreement shall be in
full force and effect.
(m) The Credit Facility shall have been duly executed and
delivered by the parties thereto.
(n) If any event shall have occurred that requires the
Issuers under Section 4(d) to prepare an amendment or supplement to the
Final Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchaser shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchaser reasonably in advance of the Closing
Date.
(o) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the
Exchange Act by the Commission or any amendment or proposed amendment
thereof by the Commission which in the judgment of the Initial Purchaser
would materially impair the ability of the Initial Purchaser to
purchase, hold or effect resales of the Securities as contemplated
hereby.
(p) Other than as contemplated by the Transactions or the
Final Offering Memorandum, since the dates (both before and after the
Transactions) as of which information is given in the Final Offering
Memorandum (exclusive of any amendment or supplement to the Final
Offering Memorandum on or after the date of the Final Offering
Memorandum), there shall not have been any change in the capital stock
or long-term debt or any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Issuers
and their respective
-26-
subsidiaries taken as a whole, the effect of which, in any such case
described above, is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Securities on the terms and in
the manner contemplated in the Final Offering Memorandum (exclusive of
any amendment or supplement thereto).
(q) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction, restraining
order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance, sale or resale of the Securities.
(r) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the ratings accorded
the Securities or any of the Issuers' other debt securities or preferred
stock by any "nationally recognized statistical rating organization," as
such term is defined by the Commission for purposes of Rule 436(g)(2) of
the rules and regulations of the Commission under the Securities Act and
(ii) no such organization shall have publicly announced that it has
under surveillance or review or changed its outlook with respect to its
rating of the Securities or any of the Issuers' other debt securities or
preferred stock (other than an announcement with positive implications
of a possible upgrading).
(s) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or limited, or minimum prices shall have been established on
any such exchange or market by the Commission, by any such exchange or
by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any
exchange or in the over-the-counter market shall have been suspended or
(ii) any moratorium on commercial banking activities shall have been
declared by federal or New York state authorities or (iii) an outbreak
or escalation of hostilities or a declaration by the United States of a
national emergency or war or any calamity or crisis or (iv) a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) the
-27-
effect of which, in the case of this clause (iv), is, in the judgment of
the Initial Purchaser, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering, sale or the
delivery of the Securities on the terms and in the manner contemplated
by this Agreement and in the Final Offering Memorandum (exclusive of any
amendment or supplement thereto).
(t) As of the Closing Date, no more than $87.0 million of
the Company's 9% senior subordinated notes due 2008 shall have been
tendered for repurchase pursuant to the Tender Offer.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser hereunder
may be terminated by the Initial Purchaser, in its absolute discretion, by
notice given to and received by the Issuers prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Sections
5(n), 5(o), 5(p), 5(q), 5(r), 5(s) and 5(t) shall have occurred and be
continuing. The obligations of the Issuers hereunder may be terminated by the
Company by notice given to and received by the Initial Purchaser prior to
delivery of payment for the Securities if, prior to that time, the event
described in Section 5(t) shall have occurred and be continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Issuers
shall fail to tender the Securities for delivery to the Initial Purchaser or (c)
the Initial Purchaser shall decline to purchase the Securities for any reason
permitted under this Agreement, the Issuers shall, jointly and severally,
reimburse the Initial Purchaser for such out-of-pocket expenses (including
reasonable fees and disbursements of counsel) as shall have been reasonably
incurred by the Initial Purchaser in connection with this Agreement and the
proposed purchase or resale of the Securities.
8. Indemnification. (a) The Issuers shall, jointly and severally,
indemnify and hold harmless the Initial Purchaser, its affiliates, their
respective officers, directors, employees, representatives, partners and agents,
and each person, if any, who controls the Initial Purchaser or any affiliate
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(a) and Section 9 as the Initial
Purchaser), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which the Initial Purchaser may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss,
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claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Final Offering Memorandum or in any
amendment or supplement thereto or in any information provided by the Issuers
pursuant to Section 4(d) or (ii) the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
shall reimburse the Initial Purchaser promptly upon demand for any legal or
other expenses reasonably incurred by the Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuers
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Initial Purchaser's
Information; and provided further, however, that with respect to any such untrue
statement in or omission from the Preliminary Offering Memorandum or the Final
Offering Memorandum, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of the Initial Purchaser to the extent that such
sale to the person asserting any such loss, claim, damage, liability or action
was an initial resale by the Initial Purchaser and any such loss, claim, damage,
liability or action of or with respect to the Initial Purchaser results from the
fact that both (A) to the extent required by applicable law a copy of the Final
Offering Memorandum or any correcting amendments or supplements thereto, as
applicable, but excluding the documents incorporated by reference therein, was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities to such person and (B) the untrue statement in or
omission from the Preliminary Offering Memorandum or the Final Offering
Memorandum, was corrected in the Final Offering Memorandum or an amendment or
supplement to the Final Offering Memorandum and the Final Offering Memorandum
(as amended or supplemented) does not contain any other untrue statement or
omission or alleged untrue statement or omission of a material fact unless, in
either case, such failure to deliver the Final Offering Memorandum (as amended
or supplemented) was a result of non-compliance by the Issuers with Section
4(b).
(b) The Initial Purchaser shall indemnify and hold harmless the
Issuers, their affiliates, their respective officers, directors, employees,
representatives, partners and agents, and each person, if any, who controls the
Issuers or any such affiliate within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(b) and
Section 9 as the Issuers), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Issuers may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the
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Final Offering Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, but in each of clause (i) and (ii) of this
Section 8(b) only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with any Initial Purchaser's Information, and shall reimburse the
Issuers for any legal or other expenses reasonably incurred by the Issuers in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of such claim or the commencement of such action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that the indemnifying party was otherwise unaware of such claim or the
commencement of such action and it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and, provided
further, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the
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indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 8(a) and 8(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party in form and substance satisfactory to such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
The obligations of the Issuers and the Initial Purchaser in this Section
8 and in Section 9 are in addition to any other liability that the Issuers or
the Initial Purchaser, as the case may be, may otherwise have, including in
respect of any breaches of representations, warranties and agreements made
herein by any such party.
9. Contribution. If the indemnification provided for in Section 8
is unavailable or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Initial Purchaser on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuers on
the one hand and the Initial Purchaser on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Initial Purchaser on the other with respect to such offering shall be
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deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Issuers, on the one hand, and the total
discounts and commissions received by the Initial Purchaser with respect to the
Securities purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Securities under this Agreement. The relative
fault 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 the Issuers or information supplied
by the Issuers on the one hand or to any Initial Purchaser's Information on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuers and the Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section 9 were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 9
shall be deemed to include, for purposes of this Section 9, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating, preparing to defend or defending any such action or claim.
Notwithstanding the provisions of this Section 9, the Initial Purchaser shall
not be required to contribute any amount in excess of the amount by which the
total discounts and commissions received by the Initial Purchaser with respect
to the Securities purchased by it under this Agreement exceeds the amount of any
damages which the Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser and the
Issuers and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, partners, agents and controlling persons of the
Issuers and the Initial Purchaser and affiliates of the Initial Purchaser and in
Section 4(e) with respect to holders and prospective purchasers of the
Securities. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 10, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
11. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Issuers agree
with the Initial Purchaser to pay (a) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
distribution of the Preliminary Offering Memorandum and the
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Final Offering Memorandum and any amendments or supplements thereto; (c) the
costs of reproducing and distributing each of the Transaction Documents; (d) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Issuers' counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(g) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel for the Initial
Purchaser in an amount not to exceed $10,000); (g) any fees charged by rating
agencies for rating the Securities; (h) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); (i) all expenses and application fees incurred in connection with the
application for the inclusion of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by DTC; and (j) all other
costs and expenses incident to the performance of the obligations of the Issuers
under this Agreement which are not otherwise specifically provided for in this
Section 11; provided, however, that except as provided in this Section 11 and
Section 7, the Initial Purchaser shall pay its own costs and expenses (including
the costs and expenses of its counsel).
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuers and the Initial
Purchaser contained in this Agreement or any certificates delivered pursuant
hereto made by or on behalf of the Issuers or the Initial Purchaser pursuant to
this Agreement shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by mail
or telecopy transmission to X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx (telecopier no.: (212)
270-1063); or
(b) if to the Issuers, shall be delivered or sent by mail or
telecopy transmission to the address of the Issuers at Cooperative
Computing, Inc., 000 Xxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxx Xxxxxx (telecopier no: (000) 000-0000), with a copy to
Hicks, Muse, Xxxx & Xxxxx Incorporated, 000 Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000, Attention: Xxxxx Xxxxxxx (telecopier no: (214)
740-7888);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made by the Initial Purchaser.
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14. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
conflicts of law provisions thereof to the extent the application of the laws of
another jurisdiction would be required thereby.
16. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
17. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Remainder of page intentionally left blank]
S-1
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Issuers and the Initial
Purchaser in accordance with its terms.
Very truly yours,
COOPERATIVE COMPUTING, INC.
By: __________________________________
Name:
Title:
TRIAD SYSTEMS FINANCIAL
CORPORATION
TRIAD DATA CORPORATION
CCI/TRIAD GEM, INC.
TRIAD SYSTEMS CORPORATION
CCI/ARD, INC.
By: __________________________________
Name:
Title:
S-2
Accepted by:
X.X. XXXXXX SECURITIES INC.
By: _____________________________________
Authorized Signatory
S-1
SCHEDULE I
Guarantors
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Triad Systems Financial Corporation (CA)
Triad Data Corporation (CA)
CCI/Triad GEM, Inc. (TX)
Triad Systems Corporation (DE)
CCI/ARD, Inc. (DE)
SCHEDULE II
Applicable Jurisdiction for Good Standing Certificates
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Alabama
California
Colorado
Georgia
Illinois
North Carolina
New York
Ohio
Texas
Virginia
ANNEX A
[Form of Registration Rights Agreement]
ANNEX B
[Form of Opinion of Weil, Gotshal & Xxxxxx LLP]
