EXHIBIT 1.1
-------------------------------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
by and among
EMERGENT GROUP INC.
and
THE SUBSIDIARY GUARANTORS
named herein
and
THE INITIAL PURCHASERS NAMED HEREIN
Dated September 17, 1997
-------------------------------------------------------------------------------
-1-
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.................................................................................1
Section 1.2. Accounting Terms; Financial Statements......................................................4
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE
OF NOTES; RIGHTS OF HOLDERS OF NOTES;
OFFERING BY INITIAL PURCHASERS
Section 2.1. Issue of Notes..............................................................................4
Section 2.2. Purchase, Sale and Delivery of Notes........................................................5
Section 2.3. Registration Rights of Holders of Notes.....................................................5
Section 2.4. Offering by the Initial Purchasers..........................................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
Section 3.1. Representations and Warranties of the Company and the
Subsidiary Guarantors..................................................................6
Section 3.2. Resale of Notes............................................................................14
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Initial Purchasers..............................14
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Company and the Subsidiary Guarantors.....................................16
ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes..................................................................17
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity..................................................................................18
Section 7.2. Contribution...............................................................................20
-i-
Section 7.3. Registration Rights Agreement..............................................................21
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions.....................................................................21
Section 8.2. Termination................................................................................21
Section 8.3. No Waiver; Modifications in Writing........................................................22
Section 8.4. Information Supplied by the Initial Purchasers.............................................22
Section 8.5. Communications.............................................................................22
Section 8.6. Execution in Counterparts..................................................................23
Section 8.7. Successors.................................................................................23
Section 8.8. Governing Law..............................................................................23
Section 8.9. Severability of Provisions.................................................................23
Section 8.10. Headings..................................................................................23
SIGNATURE PAGE...................................................................................................24
SCHEDULE I ...............................................................................................25
EXHIBIT A.......................................................................................................A-1
-ii-
SECURITIES PURCHASE AGREEMENT, dated September 17, 1997 (this
"Agreement"), among EMERGENT GROUP INC., a South Carolina corporation (the
"Company"), the Subsidiary Guarantors named herein (the "Subsidiary
Guarantors"), and FIRST UNION CAPITAL MARKETS CORP. ("First Union"), and X.X.
XXXXXX SECURITIES INC. and WHEAT, FIRST SECURITIES INC. (collectively, the
"Initial Purchasers").
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, and
unless the context requires a different meaning, the following terms have the
meanings indicated:
"Accredited Investor" has the meaning provided therefor in
Section 3.2 of this Agreement.
"Act" means the Securities Act of 1933, as amended, and rules
and regulations of the Commission thereunder.
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Person in question.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of at least
10% of the voting securities of a Person shall be deemed to be control.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof and in effect.
"Basic Documents" means, collectively, the Indenture, the
Notes, the Subsidiary Guarantees, the Registration Rights Agreement and this
Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the City of New
York are authorized or obligated by law to close.
"Capital Stock" of any Person means any and all shares,
interests or other participation in, and other equivalents (however designated
and whether voting or non-voting) of such Person's equity, including membership
interests or units in a limited liability company, and includes, without
limitation, all series and classes of such equity.
"Closing" has the meaning provided therefor in Section 2.2 of
this Agreement.
-1-
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Act.
"Default" means any event, act or condition which, with notice
or lapse of time or both, would constitute an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" means any event defined as an Event of
Default in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934 as
amended, and the rules and regulations of the Commission thereunder.
"Exchange Act Reports" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Exchange Notes" means "Exchange Securities" as defined in the
Registration Rights Agreement.
"Final Memorandum" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Indemnified Party" has the meaning provided therefor in
Section 7.1(c) of this Agreement.
"Indemnifying Party" has the meaning provided therefor in
Section 7.1(c) of this Agreement.
"Indenture" means the indenture to be dated as of September
23, 1997 among the Company, the Subsidiary Guarantors and Bankers Trust Company,
as Trustee, under which the Notes will be issued.
"Initial Purchasers" has the meaning set forth in the
introductory paragraph to this Agreement.
"Lien" means, with respect to any property or assets of any
Person, any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, security interest, lien, charge, easement, encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such property or assets
(including without limitation, any Capitalized Lease Obligations (as defined in
the Indenture)), conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing.
"Material Adverse Effect" means a material adverse effect on
the business, condition (financial or otherwise), results of operations or
prospects of the Company and its Subsidiaries, taken as a whole; provided that
"Material Adverse Effect" shall also mean a material adverse effect on the
-2-
ability of the Company or any Subsidiary Guarantor to perform its obligations
under this Agreement or the Basic Documents, as applicable.
"Memorandum" has the meaning provided therefor in Section 2.1
of this Agreement.
"Notes" means the 10.75% Senior Notes due 2004 of the Company.
"Offering" has the meaning assigned thereto in the Memorandum.
"Offering Materials" has the meaning provided therefor in
Section 7.1 of this Agreement.
"Person" means any individual, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint-stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind.
"PORTAL" means the Private Offering, Resales, and Trading
through Automated Linkages Market.
"Preliminary Memorandum" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Proceeding" has the meaning provided therefor in Section
7.1(c) of this Agreement.
"QIB" has the meaning provided therefor in Section 3.2 of this
Agreement.
"Registration Rights Agreement" means the exchange and
registration rights agreement among the Company, the Subsidiary Guarantors and
the Initial Purchasers relating to the Notes.
"State" means each of the states of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having
jurisdiction to enforce such State's securities laws.
"Subsidiary Guarantee" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Subsidiary Guarantor" has the meaning set forth in the
introductory paragraph to this Agreement.
-3-
"Subsidiaries" means, with respect to any Person, any
corporation, partnership, joint venture, association or other business entity,
whether now existing or hereafter organized or acquired, (i) in the case of a
corporation, of which more than 50% of the total voting power of the capital
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, officers or trustees thereof is held by such
first-named Person or any of its Subsidiaries; or (ii) in the case of a
partnership, limited liability company, joint venture, association or other
business entity, with respect to which such first-named Person or any of its
Subsidiaries has the power to direct or cause the direction of the management
and policies of such entity by contract or otherwise or if in accordance with
generally accepted accounting principles such entity is consolidated with the
first- named Person for financial statement purposes.
"Taxes" has the meaning provided therefor in Section 3.1(v) of
this Agreement.
"Time of Purchase" has the meaning provided therefor in
Section 2.2 of this Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder.
Section 1.2. Accounting Terms; Financial Statements. All
accounting terms used herein not expressly defined in this Agreement shall have
the respective meanings given to them in accordance with sound accounting
practice. The term "sound accounting practice" shall mean such accounting
practice as, in the opinion of the independent accountants regularly retained by
the Company, conforms at the time to generally accepted accounting principles in
the United States applied on a consistent basis except for changes with which
such accountants concur. All determinations to which accounting principles apply
shall be made in accordance with sound accounting practice.
ARTICLE II
ISSUE OF NOTES; PURCHASE AND SALE
OF NOTES; RIGHTS OF HOLDERS OF NOTES;
OFFERING BY INITIAL PURCHASERS
Section 2.1. Issue of Notes. The Company has authorized the
issuance of $125,000,000 aggregate principal amount of the Notes which are to be
issued pursuant to the Indenture. Each Note will be substantially in the form of
the Note set forth in the Indenture. The Notes will be jointly and severally
unconditionally guaranteed by the Subsidiary Guarantors pursuant to the terms of
the Indenture (the "Subsidiary Guarantees").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Act, in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company and the
Subsidiary Guarantors have prepared a preliminary offering memorandum dated
August 28, 1997 (the "Preliminary Memorandum") and prepared a final offering
memorandum dated September 17, 1997 (the "Final
-4-
Memorandum" and, together with the Preliminary Memorandum, the ("Memorandum")
setting forth or including a description of the terms of the Notes, the terms of
the Offering, a description of the Company and any material developments
relating to the Company occurring after the date of the most recent financial
statements included therein. Any reference to the Preliminary Memorandum or the
Final Memorandum shall be deemed to refer to and include the documents filed
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act and
incorporated by reference in the Preliminary Memorandum or the Final Memorandum
on or prior to the date of the Preliminary Memorandum or the Final Memorandum,
as the case may be, and any reference to any amendment or supplement to the
Memorandum or the Memorandum as amended or supplemented shall be deemed to refer
to and include any documents filed with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act after the date of the Final Memorandum and prior to
the date of such amendment or supplement. All documents filed under the Exchange
Act and so deemed to be included in the Preliminary Memorandum, the Final
Memorandum, or any amendment or supplement to the Memorandum, as the case may
be, are referred to as the "Exchange Act Reports".
Section 2.2. Purchase, Sale and Delivery of Notes. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees that it will sell to each Initial Purchaser, and each Initial Purchaser
agrees, acting severally and not jointly, that it will purchase from the Company
at the Time of Purchase, the principal amount of the Notes set forth opposite
the name of such Initial Purchaser on Schedule I hereto at a price equal to 97%
of the principal amount thereof.
The purchase, sale and delivery of the Notes will take place
at a closing (the "Closing") at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York time, on September 23, 1997,
or such later date and time, if any, as the Initial Purchasers and the Company
shall agree. The time at which such Closing is concluded is herein called the
"Time of Purchase."
One or more certificates in definitive form for the Notes that
the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 24 hours prior
closing, shall be delivered by or on behalf of the Company to the Initial
Purchasers, against payment by or on behalf of the Initial Purchasers of the
purchase price therefor by wire transfer of immediately available funds wired in
accordance with the written instructions of the Company. The Company will make
such certificate or certificates for the Notes available for checking at least
24 hours prior to the Closing.
Section 2.3. Registration Rights of Holders of Notes. The
Initial Purchasers and their direct and indirect transferees of the Notes will
have such rights with respect to the registration thereof under the Act and
qualification of the Indenture under the Trust Indenture Act as are set forth in
the Registration Rights Agreement.
Section 2.4. Offering by the Initial Purchasers. The Initial
Purchasers propose to make an offering of the Notes at the price and upon the
terms set forth in the Final Memorandum as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchasers is
advisable.
-5-
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF NOTES
Section 3.1. Representations and Warranties of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
represent and warrant to and agree with each of the Initial Purchasers as
follows:
(a) The Preliminary Offering Memorandum, as of its date, did
not and the Final Memorandum, as of its date and at the Time of
Purchase, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 3.1(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the
Initial Purchasers furnished to the Company in writing by the Initial
Purchasers expressly for use in the Final Memorandum or any amendment
or supplement thereto as set forth in Section 8.4 hereof.
(b) To the best of the Company's knowledge, the financial
statements of the Company, together with the related notes, set forth
in the Memorandum fairly present the financial condition of the Company
as of the dates indicated and the results of operations and changes in
financial position for the periods therein specified in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein),
except that the unaudited interim financial statements are subject to
normal year-end adjustments; and the summary and selected financial
data in the Memorandum present fairly the financial information shown
therein and have been prepared and compiled on a basis consistent with
audited financial statements included therein, except as otherwise
stated therein. KPMG Peat Marwick LLP, which has reported upon the
audited financial statements included in the Memorandum, is an
independent public accounting firm as required by the Act and the rules
and regulations thereunder.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of South Carolina with power and authority (corporate and other) to own
its properties and conduct its business as described in the Memorandum,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each Subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
-6-
(d) As of the Time of Purchase (after giving effect to the
Offering), the Company will have the capitalization as set forth in the
Final Memorandum, except as otherwise noted therein and for exercises
of options granted in the ordinary course of business to employees as
compensation. All of the issued and outstanding Capital Stock of the
Company are validly issued, fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights. Except as set
forth in the Final Memorandum, all of the issued shares in the capital
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 Company, free and clear of all Liens.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Subsidiary Guarantors and
(assuming the due authorization, execution and delivery by the Initial
Purchasers), is a valid and legally binding agreement of each of the
Company and the Subsidiary Guarantors, enforceable against each of them
in accordance with its terms except (i) that the enforcement hereof may
be subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and to general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought and (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities
laws and public policy considerations.
(f) The Indenture has been duly authorized by each of the
Company and the Subsidiary Guarantors and, when executed and delivered
by the Company and the Subsidiary Guarantors (assuming the due
authorization, execution and delivery by the Trustee), will constitute
a valid and legally binding agreement of each of the Company and the
Subsidiary Guarantors, enforceable against each of them in accordance
with its terms except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(g) The Registration Rights Agreement has been duly authorized
by each of the Company and the Subsidiary Guarantors and, when executed
and delivered by the Company and the Subsidiary Guarantors (assuming
the due authorization, execution and delivery by the Initial
Purchasers), will constitute a valid and legally binding agreement of
each of the Company and the Subsidiary Guarantors, enforceable against
each of them in accordance with its terms except (i) that the
enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
to general principles of equity and the discretion of the court before
which any proceeding therefor may be brought and (ii) as any rights to
indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(h) The Notes and the Exchange Notes have been duly authorized
by the Company and, when executed by the Company and authenticated by
the Trustee in accordance with the provisions of the Indenture and, in
the case of the Notes, delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be
entitled to the
-7-
benefits of the Indenture and will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought.
(i) The Subsidiary Guarantees and the guarantees of the
Exchange Notes have been duly authorized by each of the Subsidiary
Guarantors and, when the Notes are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Subsidiary Guarantees
and the guarantees of the Exchange Notes will be entitled to the
benefits of the Indenture and will constitute valid and legally binding
obligations of each of the Subsidiary Guarantors enforceable in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought.
(j) Immediately after the consummation of the transactions
contemplated by this Agreement (including the use of proceeds from the
sale of Notes at the Time of Purchase), the fair value and present fair
saleable value of the assets of the Company (on a consolidated basis)
will exceed the sum of its stated liabilities and identified contingent
liabilities; the Company (on a consolidated basis) will not be, after
giving effect to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
(including the use of proceeds from the sale of Notes at the Time of
Purchase), (i) left with unreasonably small capital with which to carry
on its business as it is proposed to be conducted, (ii) unable to pay
its debts (contingent or otherwise) as they mature or (iii) otherwise
insolvent.
(k) Each of the Company and the Subsidiary Guarantors (to the
extent a party thereto) has all requisite power and authority to (i)
execute, deliver and perform its obligations under this Agreement and
each of the Basic Documents, (ii) execute, deliver and perform its
obligations under all other agreements and instruments executed and
delivered by it pursuant to or in connection with this Agreement and
each of the Basic Documents and (iii) issue the Notes or its Subsidiary
Guarantee, as the case may be, in the manner and for the purpose
contemplated by this Agreement.
(1) Subsequent to the date as of which information is given in
the Memorandum there has not been (i) any event or condition that has
had or that could reasonably be expected to have a Material Adverse
Effect, (ii) any transaction entered into by the Company or any of its
Subsidiaries, other than in the ordinary course of business, that is
material to the Company or any of its Subsidiaries, or (iii) any
dividend or distribution of any kind declared, paid or made by the
Company on its common equity.
(m) Except as set forth in the Memorandum, there is no action,
suit, investigation or proceeding, governmental or otherwise, pending
or, to the best knowledge of the Company,
-8-
threatened to which the Company or any of its Subsidiaries is or would
be a party or of which the properties or assets of the Company or any
of its Subsidiaries are or may be subject that (i) seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
and sale of the Notes by the Company or the making of the Subsidiary
Guarantees by any Subsidiary Guarantor or any of the other transactions
contemplated hereby or by any of the Basic Documents, (ii) questions
the legality or validity of any such transactions or seeks to recover
damages or obtain other relief in connection with any such transactions
or (iii) could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(n) The execution, delivery and performance by the Company and
the Subsidiary Guarantors (to the extent a party thereto) of this
Agreement and the Basic Documents, and the issuance and sale by the
Company of the Notes, the making of the Subsidiary Guarantees by the
Subsidiary Guarantors, and the execution, delivery and performance by
the Company and the Subsidiary Guarantors (to the extent a party
thereto) of all other agreements and instruments to be executed and
delivered by the Company and the Subsidiary Guarantors pursuant hereto
or thereto or in connection herewith or therewith, and compliance by
the Company and the Subsidiary Guarantors (to the extent a party
thereto) with the terms and provisions hereof and thereof, and the
consummation of the transactions contemplated hereby and thereby do not
and will not (i) violate any provision of any law, rule or regulation
(including, without limitation, Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
decree, determination or award presently in effect or in effect at the
Time of Purchase having applicability to the Company or any of its
Subsidiaries or (ii) conflict with or result in a breach of or
constitute a default under the organizational documents of the Company
or any of its Subsidiaries or any indenture or loan or credit
agreement, or any other agreement or instrument, to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries, or any of their respective properties or assets, may
be bound or affected, or (iii) except as contemplated by this Agreement
and the Basic Documents, result in, or require the creation or
imposition of, any Lien upon or with respect to any of the properties
now owned or hereafter acquired by the Company or any of its
Subsidiaries, except, in each case, where such violation, conflict,
default or creation or imposition of any Lien would not (individually
or in the aggregate) reasonably be expected to have a Material Adverse
Effect.
(o) Each agreement or instrument executed and delivered by the
Company or the Subsidiary Guarantors (to the extent a party thereto) in
connection with this Agreement and the Basic Documents has been duly
and validly authorized, executed and delivered by the Company and the
Subsidiary Guarantors (to the extent a party thereto) and constitutes
or will constitute a valid and legally binding obligation of the
Company and the Subsidiary Guarantors (to the extent a party thereto),
enforceable against them in accordance with its terms, except (i) that
the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors, rights generally, and
to general principles of equity and the discretion of the court before
which any proceeding therefor may be brought and (ii) as any rights to
indemnity and contribution hereunder and thereunder may be limited by
applicable law.
-9-
(p) Neither the Company nor any of its Subsidiaries is
currently or, after giving effect to the consummation of the
transactions contemplated by this Agreement and the Basic Documents,
will be (i) in violation of its respective organizational documents,
(ii) in default (nor will an event occur which with notice or passage
of time or both would constitute such a default) under or in violation
of any indenture or loan or credit agreement or any other material
agreement or instrument to which it is a party or by which it or any of
its properties or assets may be bound or affected (except as set forth
in the Memorandum), (iii) in violation of any order of any court,
arbitrator or governmental body or (iv) in violation of or will have
violated any statute, rule or regulation of any governmental authority,
which default or violation (individually or in the aggregate) could
reasonably be expected to (x) affect the legality, validity or
enforceability of this Agreement or any of the Basic Documents or (y)
have a Material Adverse Effect.
(q) No authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory
authority or any securities exchange is required in connection with the
execution, delivery or performance by the Company or the Subsidiary
Guarantors of this Agreement or any of the Basic Document, the
compliance by the Company or the Subsidiary Guarantors with the terms
and provisions hereof and thereof or the consummation of the
transactions contemplated hereby and thereby, except (i) as may be
required under State securities or "blue sky" laws or the laws of any
foreign jurisdiction in connection with the offer and sale of the Notes
(ii) as may be required under the Act, the Trust Indenture Act, and
State securities or "blue sky" laws or the laws of any foreign
jurisdiction in connection with the exchange offer or resale
registration statement described in the Memorandum and contemplated by
the Registration Rights Agreement or (iii) as would not (individually
or in the aggregate) have a Material Adverse Effect.
(r) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("Permits"), as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner
described in the Memorandum; the Company and each of its Subsidiaries
has fulfilled and performed all of its material obligations with
respect to such Permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of
the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Memorandum, such Permits
contain no restriction that are materially burdensome to the Company or
any of its Subsidiaries.
(s) Neither the Company nor any Subsidiary Guarantor is, and
immediately after the Time of Purchase will not be, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(t) The execution and delivery of this Agreement and the other
Basic Documents and the sale of the Notes to the Initial Purchasers
will not involve any non-exempt prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code on the part
of the Company or any of its Subsidiaries. No Reportable Event (as
defined in Section
-10-
4043 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect
to any Employee Benefit Plan (as defined below), and the Company and
each of its Subsidiaries have complied in all material respects with
the applicable provisions of ERISA and the Code in connection with the
Employee Benefit Plans. The present value of all accrued benefits under
each Employee Benefit Plan subject to Title IV of ERISA (based on the
current liability, interest rate and other assumptions used in
preparation of the plan's Form 5500 Annual Report) did not, as of the
last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets
of such plan allocable to such accrued benefits. Neither the Company,
any of its Subsidiaries, nor any Commonly Controlled Entity (as defined
below) has had a complete or partial withdrawal from any Multiemployer
Plan (as defined in Section 4001(a)(3) of ERISA), and neither the
Company, any of its Subsidiaries, nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Company, any
of its Subsidiaries, or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which such representation is
made or deemed made. No such Multiemployer Plan is in reorganization or
insolvent. There are no material liabilities of the Company, any of its
Subsidiaries, or any Commonly Controlled Entity for post-retirement
benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as described in Section 3(l) of
ERISA). "Commonly Controlled Entity" shall mean any person or entity
that, together with any Company or any of its Subsidiaries, is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code.
"Employee Benefit Plan" shall mean an employee benefit plan, as defined
in Section 3(3) of ERISA which is maintained or contributed to by the
Company, any of its Subsidiaries or any Commonly Controlled Entity or
to which the Company, any of its Subsidiaries or any Commonly
Controlled Entity may have liability.
(u) The Company and its Subsidiaries have good and valid title
to, or valid and enforceable leasehold interests in, all properties and
assets identified in the Memorandum as owned or leased, respectively,
by them which are material to the business of the Company, free and
clear of all Liens, except (i) such Liens as are described in the
Memorandum or (ii) Liens created in the ordinary course of business
which are Permitted Liens (as defined in the Indenture). All of the
leases material to the business of the Company and under which the
Company or any of its Subsidiaries holds properties described in the
Memorandum are valid and binding as leased by them, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such properties by the Company and its
Subsidiaries.
(v) No form of general solicitation or general advertising was
used by the Company or the Subsidiary Guarantors or their
representatives in connection with the offer and sale of the Notes.
Neither the Company nor any Subsidiary Guarantor nor any Person
authorized to act for any of them has, either directly or indirectly,
sold or offered for sale any of the Notes or Subsidiary Guarantees or
any other similar security to, or solicited any offers to buy any
thereof from, or has otherwise approached or negotiated in respect
thereof with, any Person or Persons other than with or through the
Initial Purchasers; and the Company and the Subsidiary Guarantors agree
that neither they nor any Person acting on their behalf will sell or
offer for sale any Notes or Subsidiary Guarantees to, or solicit any
offers to buy any Notes
-11-
from, or otherwise approach or negotiate in respect thereof with, any
Person or Persons so as thereby to bring the issuance or sale of any of
the Notes and Subsidiary Guarantees within the provisions of Section 5
of the Act.
(w) All tax returns required to be filed by the Company and
its Subsidiaries in any jurisdiction (including foreign jurisdictions)
have been so filed and all taxes, assessments, fees and other charges
including, without limitation, withholding taxes, penalties, and
interest ("Taxes") due or claimed to be due have been paid, other than
those Taxes being contested in good faith and those Taxes for which
adequate reserves or accruals have been established in accordance with
generally accepted accounting principles, except where the failure to
file such returns or to pay such Taxes is not reasonably likely to
have, singly or in the aggregate, a Material Adverse Effect. The
Company knows of no actual or proposed additional tax assessments for
any fiscal period against the Company and its Subsidiaries that,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect.
(x) The Company and its Subsidiaries are the sole and
exclusive owner or licensee of all trade names, unregistered trademarks
and service marks, brand names, patents, registered and unregistered
copyrights, registered trademarks and service marks, and all
applications for any of the foregoing, and all permits, grants and
licenses or other rights with respect thereto, the absence of which
would have or could reasonably be expected to have a Material Adverse
Effect. Except as set forth in the Memorandum, neither the Company nor
any of its Subsidiaries has been charged with any material infringement
of any intangible property of the character described above or been
notified or advised of any material claim of any other Person relating
to any of the intangible property which infringements or claims
(individually or in the aggregate) would have a Material Adverse
Effect.
(y) Except as set forth in the Memorandum or such as does not
have a Material Adverse Effect, the Company and its Subsidiaries comply
with all, and have no liability under any, laws, rules and regulations
(including, without limitation, all applicable environmental laws,
rules and regulations) applicable to them, and the Company and its
Subsidiaries own or possess and are operating in compliance in all
material respects with the terms, provisions, conditions, restrictions
and limitations contained in all licenses, franchises, approvals,
certificates and permits (including, without limitation, environmental
permits) from all Federal, State, foreign and local governmental and
regulatory authorities which are necessary to own or lease their
respective properties and assets and to the conduct of their respective
businesses. There are no citations or notices of forfeiture or other
proceedings pending or, to the best knowledge of the Company,
threatened or any basis therefor which would lead to the revocation,
termination, suspension or non-renewal of any such license, franchise,
approval, certificate or permit except where all such revocations,
terminations, suspensions or non- renewals, individually or in the
aggregate, would not have a Material Adverse Effect. Other than as
disclosed in the Memorandum, (i) there are no license renewal or other
regulatory proceedings existing, pending or, to the best knowledge of
the Company, threatened against the Company or any of its Subsidiaries
that would have a Material Adverse Effect, and (ii) there are no
restrictions or limitations contained in any applicable license,
franchise, approval, certificate or permit, or, to the best knowledge
of the Company, threatened or proposed in any pending or contemplated
hearing, proceeding or procedure, that would have a Material Adverse
Effect.
-12-
(z) The Notes, the Subsidiary Guarantees, the Indenture, and
the Registration Rights Agreement conform in all material respects to
the description thereof in the Final Memorandum.
(aa) Assuming the accuracy of the Initial Purchasers'
representation and warranties set forth in Section 3.2 hereof, and the
due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 3.2 hereof, the offer and sale of the
Notes to the Initial Purchasers and the initial resale of the Notes by
the Initial Purchasers, in each case in the manner contemplated by this
Agreement and the Memorandum, do not require registration under the Act
and the Indenture does not require qualification under the Trust
Indenture Act.
(bb) Except as set forth in the Memorandum, there is no
strike, labor dispute, slowdown or work stoppage with the employees of
the company which is pending or, to the best knowledge of the Company,
threatened.
(cc) Each of the Company and its Subsidiaries carries
insurance (including self insurance) in such amounts and covering such
risks as in its reasonable determination is adequate for the conduct of
its business and the value of its properties.
(dd) No securities of the Company or the Subsidiary Guarantor
are of the same class (within the meaning of Rule 144A under the Act)
as the Notes or Subsidiary Guarantees, as the case may be, and listed
on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated interdealer quotation
system.
(ee) None of the Company nor any Subsidiary Guarantors or any
of their respective affiliates has taken, nor will any of them take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Notes.
(ff) None of the Company, the Subsidiary Guarantors, any of
their respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchaser) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Act
("Regulation S") with respect to the Notes and the Subsidiary
Guarantees and the Company, the Subsidiary Guarantors and their
respective Affiliates and any person acting on its or their behalf
(other than the Initial Purchasers) have acted in accordance with the
offering restrictions requirements of Regulation S.
(gg) The statistical and market-related data included in the
Memorandum are based on or derived from sources which the Company
believes to be reliable and accurate or represents the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(hh) Except as stated in the Memorandum, the Company does not
know of any claims for services, either in the nature of a finder's fee
or financial advisory fee, with respect to the offering of the Notes
and the transactions contemplated by the Final Memorandum.
-13-
Section 3.2. Resale of Notes. Each of the Initial purchasers
represents and warrants (as to itself only) that it is a "qualified
institutional buyer" as defined in Rule 144A under the Act ("QIB"). Each of the
Initial Purchasers agrees with the Company (as to itself only) that (a) it has
not and will not solicit offers for, or offer or sell, the Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; and (b) it has and will solicit offers
for the Notes only from, and will offer the Notes only to, (A) in the case of
offers inside the United States, (i) Persons whom the Initial Purchasers
reasonably believe to be QIBs or, if any such Person is buying for one or more
institutional accounts for which such Person is acting as fiduciary or agent,
only when such Person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions
complying with Rule 144A or (ii) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be "Accredited
Investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of the Act) that,
prior to their purchase of the Notes, deliver to the Initial Purchasers a letter
containing the representations and agreements set forth in Annex A to the Final
Memorandum and (B) in the case of offers outside the United States, to Persons
other than U.S. Persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)) in
transactions complying with Rule 903 under the Act.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the
Initial Purchasers. The obligation of each Initial Purchaser to purchase the
Notes to be purchased by it hereunder is subject, at the Time of Purchase, to
the satisfaction of the following conditions:
(a) At the Time of Purchase, the Initial Purchasers shall have
received the opinion, dated as of the Time of Purchase and addressed to
the Initial Purchasers, of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.,
counsel for the Company and the Subsidiary Guarantors, in form and
substance satisfactory to counsel for the Initial Purchasers, to the
effect as set forth on Exhibit A hereto.
(b) The Initial Purchasers shall have received an opinion,
addressed to the Initial Purchasers in form and substance satisfactory
to the Initial Purchasers and dated as of the Time of Purchase, of
Xxxxxxxx & Xxxxxxxx, counsel to the Initial Purchasers.
(c) The Initial Purchasers shall have received from each of
KPMG Peat Marwick, LLP and Xxxxxxx, Xxxxx & Company, LLP a comfort
letter or letters dated the date hereof and the Closing in form and
substance reasonably satisfactory to counsel to the Initial Purchasers.
(d) The representations and warranties made by the Company and
the Subsidiary Guarantors herein shall be true and correct in all
material respects on and as of the Time of Purchase with the same
effect as though such representations and warranties had been made on
and as of the Time of Purchase, the Company and the Subsidiary
Guarantors shall have complied in all material respects with all
agreements as set forth in or contemplated hereunder
-14-
and in the Basic Documents required to be performed by it at or prior
to the Time of Purchase.
(e) Subsequent to the date of the Final Memorandum, (i) there
shall not have been any change, or any development involving a
prospective change, which has had or could reasonably be expected to
have a Material Adverse Effect and (ii) the Company and its
Subsidiaries shall have conducted their respective businesses only in
the ordinary course.
(f) At the Time of Purchase and after giving effect to the
consummation of the transactions contemplated by this Agreement and the
Basic Documents, there shall exist no Default or Event of Default.
(g) The purchase of and payment for the Notes by the Initial
Purchasers hereunder shall not be prohibited or enjoined (temporarily
or permanently) by any applicable law or governmental regulation
(including, without limitation, Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System).
(h) At the Time of Purchase, the Initial Purchasers shall have
received a certificate, dated the Time of Purchase, from the Company
and the Subsidiary Guarantors stating that the conditions specified in
Sections 4.1(d), (e), (f) and (g) have been satisfied or duly waived at
the Time of Purchase.
(i) Each of the Basic Documents shall be satisfactory in form
and substance to each of the Initial Purchasers and shall have been
executed and delivered by all the respective parties thereto and shall
be in full force and effect.
(j) All proceedings taken in connection with the issuance of
the Notes and the transactions contemplated by this Agreement, the
Basic Documents and all documents and papers relating thereto shall be
reasonably satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers. The Initial Purchasers and counsel to the Initial
Purchasers shall have received copies of such papers and documents as
they may reasonably request in connection therewith, all in form and
substance reasonably satisfactory to them.
On or before the Closing, the Initial Purchasers and counsel
to the Initial Purchasers shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the business,
corporate, legal and financial affairs of the Company as they may reasonably
request.
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors covenant and agree with
each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have
-15-
been advised and furnished a copy for a reasonable period of time prior
to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent, which consent shall not
be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchasers or counsel to the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable
in connection with the resale of the Notes by the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes and Subsidiary Guarantees
for offering and sale under the securities or "blue sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be reasonably
necessary to complete the resale of the Notes; provided, however, that
in connection therewith, the Company shall not be required to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in excess of
a nominal dollar amount in any such jurisdiction where it is not then
so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes, any event occurs
or information becomes known as a result of which the Final Memorandum
as then amended or supplemented would include any untrue statement of a
material fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if for any other reason it is necessary
at any time to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly notify the Initial Purchasers
thereof (who thereafter will not use such Final Memorandum until
appropriately amended or supplemented) and will prepare, at the expense
of the Company, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the initial
Purchasers and to counsel to the Initial Purchasers as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of
the Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For and during the period ending on the date no Notes or
Exchange Notes are outstanding, the Company will furnish to the Initial
Purchasers copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee or the holders of
the Notes or Exchange Notes and, promptly after available, copies of
any reports or financial statements furnished to or filed by the
Company with the Commission or any national securities exchange on
which any class of securities of the Company may be listed.
(g) Prior to the Time of Purchase, the Company will furnish to
the Initial Purchasers, as soon as they have been prepared, a copy of
any unaudited interim financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
-16-
(h) None of the Company, any Subsidiary Guarantor or any of
their Affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the
Act) which could be integrated with the sale of the Notes and the
Subsidiary Guarantees in a manner which would require the registration
under the Act of the Notes.
(i) None of the Company, any Subsidiary Guarantor or any of
their Affiliates will solicit any offer to buy or offer to sell the
Notes or Subsidiary Guarantees by means of any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act and not salable in full under Rule 144 under the Act (or any
successor provision), the Company will make available, upon request, to
any seller of such Notes the information specified in Rule 144A(d)(4)
under the Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Notes to be included for quotation on PORTAL and (ii) permit the Notes
and Exchange Notes to be eligible for clearance and settlement through
The Depository Trust Company.
(1) The Company and the Subsidiary Guarantors (to the extent a
party thereto) will do and perform all things required to be done and
performed by them under this Agreement and the Basic Documents prior to
or after the Closing and to satisfy all conditions precedent on their
part to the obligations of the Initial Purchasers to purchase and
accept delivery of the Notes.
ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes. The Company and the
Subsidiary Guarantors, jointly and severally, agree to pay all costs and
expenses incident to the performance of their obligations under this Agreement,
whether or not the transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 8.2 hereof, including, but not
limited to, all costs and expenses incident to (i) the printing, word processing
and reproduction of this Agreement, each of the Basic Documents, any amendment
or supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith, (ii) printing the Preliminary Memorandum and the Final Memorandum and
any amendment or supplement thereto and any other marketing related materials,
(iii) all arrangements relating to the delivery to the Initial Purchasers of
copies of the foregoing documents, (iv) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company, (v) preparation (including printing), issuance and delivery to the
Initial Purchasers of the Notes, (vi) the qualification of the Notes under
securities and "blue sky" laws, including filing fees, word processing and
reproduction costs of any "blue sky" memoranda and fees and disbursements of
-17-
counsel to the Initial Purchasers relating thereto, (vii) expenses of Company
personnel and the cost of any privately chartered air travel in connection with
any meetings with prospective investors in the Notes, (viii) fees and expenses
of the trustee, including fees and expenses of counsel to the Trustee, (ix) all
expenses and listing fees incurred in connection with the application for
quotation of the Notes on PORTAL, (x) any fees charged by rating agencies for
the rating of the Notes, and (xi) except as limited by Article VII, all costs
and expenses including, without limitation, reasonable attorneys' fees and
expenses), if any, in connection with the enforcement of this Agreement, the
Notes or any other agreement furnished pursuant hereto or thereto or in
connection herewith or therewith. In addition, the Company shall pay any and all
stamp, transfer and other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement, any Basic Document
or the issuance of the Notes, and shall save and hold each Initial Purchaser
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying, or omission to pay, such taxes.
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity.
(a) Indemnification by the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
agree and covenant to hold harmless and indemnify each of the Initial Purchasers
and any Affiliates thereof (including any director, officer, employee, agent or
controlling Person of any of the foregoing) from and against any losses, claims,
damages, liabilities and expenses (including expenses of investigation) to which
such Initial Purchaser and its Affiliates may become subject arising out of or
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Memorandum and any amendments or supplements thereto, the Basic
Documents or any documents filed with the Commission or any State Commission
(collectively, the "Offering Materials") or arising out of or based upon the
omission or alleged omission to state in any of the Offering Materials a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company and the Subsidiary
Guarantors shall not be liable under this paragraph (a) to the extent that such
losses, claims, damages or liabilities arose out of or are based upon an untrue
statement or omission made in any of the documents referred to in this paragraph
(a) in reliance upon and in conformity with the information relating to the
Initial Purchasers furnished in writing by such Initial Purchasers for therein.
The Company and the Subsidiary Guarantors, on a joint and several basis, further
agree to reimburse each Initial Purchaser for any reasonable legal and other
expenses as they are incurred by it in connection with investigating, preparing
to defend or defending any lawsuits, claims or other proceedings or
investigations arising in any manner out of or in connection with such Person
being an Initial Purchaser; provided that if the Company or the Subsidiary
Guarantors reimburse an Initial Purchaser hereunder for any expenses incurred in
connection with a lawsuit, claim or other proceeding for which indemnification
is sought, such Initial Purchaser hereby agrees to refund such reimbursement of
expenses to the extent that the losses, claims, damages or liabilities are not
entitled to indemnification hereunder. The Company and the Subsidiary Guarantors
further agree that the indemnification, contribution and reimbursement
commitments set forth in this Article VII shall apply whether or not an Initial
Purchaser is a formal party to any such lawsuits, claims or other proceedings.
The indemnity, contribution and expense reimbursement obligations of the Company
-18-
and the Subsidiary Guarantors under this Article VII shall be in addition to any
liability the Company and the Subsidiary Guarantors may otherwise have.
(b) Indemnification by the Initial Purchasers. Each of the
Initial Purchasers agrees and covenants, severally and not jointly, to hold
harmless and indemnify the Company and the Subsidiary Guarantors and any
Affiliates thereof (including any director, officer, employee, agent or
controlling Person of any of the foregoing) from and against any losses, claims,
damages, liabilities and expenses insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement of
any material fact contained in the Offering Materials, or upon the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or omission was made in reliance upon and
in conformity with the information relating to such Initial Purchaser furnished
in writing by such Initial Purchaser for inclusion therein. The indemnity,
contribution and expense reimbursement obligations of the Initial Purchasers
under this Article VII shall be in addition to any liability the Initial
Purchasers may otherwise have.
(c) Procedure. If any Person shall be entitled to Indemnity
hereunder (each an "Indemnified Party"), such Indemnified Party shall give
prompt written notice to the party or parties from which such indemnity is
sought (each an "Indemnifying Party") of the commencement of any action, suit,
investigation or proceeding, governmental or otherwise (a "Proceeding"), with
respect to which such Indemnified Party seeks Indemnification or contribution
pursuant hereto; provided, however, that the failure so to notify the
Indemnifying Parties shall not relieve the Indemnifying Parties from any
obligation or liability except to the extent that the Indemnifying Parties have
been prejudiced materially by such failure. The Indemnifying Parties shall have
the right, exercisable by giving written notice to an Indemnified Party promptly
after the receipt of written notice from such Indemnified Party of such
Proceeding, to assume, at the Indemnifying Parties' expense, the defense of any
such Proceeding, with counsel reasonably satisfactory to such Indemnified Party;
provided, however, that an Indemnified Party or parties (if more than one such
Indemnified Party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or parties unless: (1) the Indemnifying Parties agree to
pay such fees and expenses; or (2) the Indemnifying Parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party or parties and the Indemnifying Party or an Affiliate of the
Indemnifying Party and such Indemnified Parties, and the Indemnified Parties
shall have been advised in writing by counsel that there may be one or more
legal defenses available to such Indemnified Party or parties that are different
from or additional to those available to the Indemnifying Parties, in which
case, if such Indemnified Party or parties notifies the Indemnifying Parties in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Parties, the Indemnifying Parties shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Parties, it being understood, however, that, unless there exists a
conflict among Indemnified Parties, the Indemnifying Parties shall not, in
connection with any one such Proceeding or separate but substantially similar or
related Proceedings in the same Jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such Indemnified Party or Parties. No Indemnified Party or Parties will
settle any Proceeding without the consent of the Indemnifying Party
-19-
or Parties (but such consent shall not be unreasonably withheld). No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, 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, from all liability
or claims that are the subject of such Proceeding.
Section 7.2. Contribution. If for any reason the
indemnification provided for in Section 7.1 of this Agreement is unavailable to
an Indemnified Party, or insufficient to hold it harmless, in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnifying and Indemnified Parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Indemnifying and
Indemnified Parties shall be deemed to be in the same proportion as the total
proceeds from the offering of the Notes (before deducting expenses) received by
the Company bear to the total discounts and commissions received by each Initial
Purchaser. The relative fault of the Indemnifying and Indemnified Parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying or
Indemnified Parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with investigating or
defending any such claim.
The Company and the Subsidiary Guarantors and each of the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to the immediately preceding paragraph were determined pro rata or per
capita or by any other method of allocation which does not take into account the
equitable considerations referred to in such paragraph. Notwithstanding any
other provision of this Section 7.2, no Initial Purchaser shall be obligated to
make contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact. 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.
Section 7.3. Registration Rights Agreement. Notwithstanding
anything to the contrary in this Article 7, the indemnification and contribution
provisions of the Registration Rights Agreement shall govern any claim with
respect thereto.
-20-
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions. The representations,
warranties and covenants of the Company, the Subsidiary Guarantors, their
respective officers and the Initial Purchasers made herein, the indemnity and
contribution agreements contained herein and each of the provisions of Articles
VI, VII and VIII shall remain operative and in full force and effect regardless
of (a) any investigation made by or on behalf of the Company, the Subsidiary
Guarantors, any Initial Purchaser or any Indemnified Party, (b) acceptance of
any of the Notes and payment therefor, (c) any termination of this Agreement, or
(d) disposition of the Notes by the Initial Purchasers whether by redemption,
exchange, sale or otherwise.
Section 8.2. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Time of Purchase in the event that the Company shall have failed, refused
or been unable to perform all obligations and satisfy all conditions on their
part to be performed or satisfied hereunder at or prior thereto at or prior to
the Closing or if any of the following shall have occurred:
(i) the Company or any of its Subsidiaries shall have
sustained any loss or interference with respect to its business or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding,
which loss or interference, in the sole judgment of the Initial
Purchasers, has had or has a Material Adverse Effect, or there shall
have been, in the sole judgment of the Initial Purchasers, any event or
development that, individually or in the aggregate, has or could be
reasonably likely to have a Material Adverse Effect (including without
limitation a Change of Control (as defined in the Indenture) of the
Company or any of its Subsidiaries), except in each case as described
in the Final Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the Nasdaq National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared by New
York, South Carolina or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum; or
-21-
(v) any securities of the Company shall have been downgraded
or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 8.2
shall be without liability of any party to any other party except as provided in
Section 8.1 hereof.
Section 8.3. No Waiver; Modifications in Writing. No failure or delay
on the part of the Company, the Subsidiary Guarantors or any Initial Purchaser
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
the Subsidiary Guarantors or any Initial Purchaser at law or in equity or
otherwise. No waiver of or consent to any departure by the Company or the
Subsidiary Guarantors from any provision of this Agreement shall be effective
unless signed in writing by the party entitled to the benefit thereof, provided
that notice of any such waiver shall be given to each party hereto as set forth
below. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of each of the Company, the Subsidiary Guarantors and
each Initial Purchaser. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Subsidiary Guarantors from
the terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on the Company or the Subsidiary Guarantors in any case shall entitle the
Company or the Subsidiary Guarantors to any other or further notice or demand in
similar or other circumstances.
Section 8.4. Information Supplied by the Initial Purchasers.
The statements set forth in the last two sentences of the third paragraph under
the caption "Plan of Distribution" and the fourth sentence of the fifth
paragraph under the caption "Plan of Distribution" in the Final Memorandum (to
the extent such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to the Company for the purposes
of Sections 3.1(a) and 7.1(a) and (b) hereof.
Section 8.5. Communications. All notices, demands and other
communications provided for hereunder shall be in writing, and, (a) if to the
Initial Purchasers, shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service or personal
delivery, addressed to it in care of First Union Capital Markets Corp., 000
Xxxxx Xxxxxxx Xxxxxx XX-00, Xxxxxxxxx, XX 00000 and (b) if to the Company or any
Subsidiary Guarantor, shall be given by similar means to it in care of the
Company, 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
attn: Chief Financial Officer. In each case notices, demands and other
communications shall be deemed given when received.
Section 8.6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
-22-
Section 8.7. Successors. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchasers, the Company, the
Subsidiary Guarantors and their respective successors and legal representatives,
and nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other Person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained; this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such Persons and for the benefit of
no other Person except that (i) the indemnities of the Company and the
Subsidiary Guarantors contained in Section 7.1(a) of this Agreement shall also
be for the benefit of the directors, officers, employees and agents of the
Initial Purchasers and any Person or Persons who control the Initial Purchasers
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Initial Purchasers contained in Section 7.1(b)
of this Agreement shall also be for the benefit of the directors of the Company
and the Subsidiary Guarantors, their officers and any Person or Persons who
control the Company or the Subsidiary Guarantors within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the
Initial Purchasers will be deemed a successor because of such purchase.
Section 8.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 8.9. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Headings. The Article and Section headings and
Table of Contents used or contained in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.
-23-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
EMERGENT GROUP, INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: VP, CFO & Treasurer
CAROLINA INVESTORS, INC.
EMERGENT BUSINESS CAPITAL, INC.
EMERGENT COMMERCIAL MORTGAGE, INC.
EMERGENT EQUITY ADVISORS, INC.
EMERGENT FINANCIAL CORP.
EMERGENT MORTGAGE CORP.
EMERGENT MORTGAGE COPR. OF TENESSEE
PREMIER FINANCIAL SERVICES, INC.
STERLING LENDING CORPORATION
STERLING LENDING CORPORATION
INSURANCE AGENCY, INC.
THE LOAN PRO$, INC.,
as Subsidiary Guarantors
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: VP & Treasurer
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Director
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
Name:
Title: VP
WHEAT, FIRST SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
-24-
SCHEDULE I
Principal Amount
Initial Purchaser of Notes
----------------- ---------
First Union Capital Markets Corp.......................................... $68,750,000
X.X. Xxxxxx Securities Inc................................................ 43,750,000
Wheat, First Securities, Inc.............................................. 12,500,000
Total $125,000,000
-----------
-25-
EXHIBIT A
Opinion of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of South Carolina with power and authority (corporate and other) to own
its properties and conduct its business as described in the Memorandum,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each Subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(ii) Except as set forth in the Final Memorandum, all of the
issued shares in the capital 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 Company,
free and clear of all Liens.
(iii) The Securities Purchase Agreement has been duly
authorized, executed and delivered by each of the Company and the
Subsidiary Guarantors.
(iv) The Indenture has been duly authorized by each of the
Company and the Subsidiary Guarantors and (assuming the due
authorization, execution and delivery by the Trustee) constitutes a
valid and legally binding agreement of each of the Company and the
Subsidiary Guarantors, enforceable against each of them in accordance
with its terms except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(v) The Registration Rights Agreement has been duly authorized
by each of the Company and the Subsidiary Guarantors and constitutes a
valid and legally binding agreement of each of the Company and the
Subsidiary Guarantors, enforceable against each of them in accordance
with its terms except (i) that the enforcement thereof may be subject
to bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and to general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought and (ii) as any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations.
A-1
(vi) The Notes have been duly authorized by the Company, are
entitled to the benefits of the Indenture and constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(vii) The Subsidiary Guarantees have been duly authorized by
each of the Subsidiary Guarantors, are entitled to the benefits of the
Indenture and constitute valid and legally binding obligations of each
of the Subsidiary Guarantors enforceable in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(viii) To the knowledge of such counsel, except as set forth
in the Final Memorandum, there is no action, suit, investigation or
proceeding, governmental or otherwise, pending or, to the best
knowledge of the Company, threatened to which the Company or any of its
Subsidiaries is or would be a party or of which the properties or
assets of the Company or any of its Subsidiaries are or may be subject
that (i) seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance and sale of the Notes by the Company
or the making of the Subsidiary Guarantees by any Subsidiary Guarantor
or any of the other transactions contemplated by the Securities
Purchase Agreement or any of the Basic Documents, (ii) questions the
legality or validity of any such transactions or seeks to recover
damages or obtain other relief in connection with any such transactions
or (iii) could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(ix) The execution, delivery and performance by the Company
and the Subsidiary Guarantors (to the extent a party thereto) of the
Securities Purchase Agreement and the Basic Documents, and the issuance
and sale by the Company of the Notes, the making of the Subsidiary
Guarantees by the Subsidiary Guarantors, and the execution, delivery
and performance by the Company and the Subsidiary Guarantors (to the
extent a party thereto) of all other agreements and instruments to be
executed and delivered by the Company and the Subsidiary Guarantors
pursuant thereto or in connection therewith, and compliance by the
Company and the Subsidiary Guarantors (to the extent a party thereto)
with the terms and provisions thereof, and the consummation of the
transactions contemplated thereby do not and will not (i) violate any
provision of any law, rule or regulation (including, without
limitation, Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, decree, determination
or award presently in effect or in effect at the Time of Purchase
having applicability to the Company or any of its Subsidiaries or (ii)
conflict with or result in a breach of or constitute a default under
the organizational documents of the Company or any of its Subsidiaries
or any indenture or loan or credit agreement, or any other agreement or
instrument, known to such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries, or any of their respective properties or assets, may be
bound or affected, or (iii) except as contemplated by the Securities
Purchase Agreement and the Basic Documents, result in, or require the
creation
A-2
or imposition of, any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Company or any of its
Subsidiaries, except, in each case, where such violation, conflict,
default or creation or imposition of any Lien would not (individually
or in the aggregate) reasonably be expected to have a Material Adverse
Effect.
(x) To the knowledge of such counsel, neither the Company nor
any of its Subsidiaries is currently or, after giving effect to the
consummation of the transactions contemplated by the Securities
Purchase Agreement and the Basic Documents, will be (i) in violation of
its respective organizational documents, (ii) in default (nor will an
event occur which with notice or passage of time or both would
constitute such a default) under or in violation of any indenture or
loan or credit agreement or any other material agreement or instrument
to which it is a party or by which it or any of its properties or
assets may be bound or affected (except as set forth in the
Memorandum), (iii) in violation of any order of any court, arbitrator
or governmental body or (iv) in violation of or will have violated any
statute, rule or regulation of any governmental authority, which
default or violation (individually or in the aggregate) could
reasonably be expected to (x) affect the legality, validity or
enforceability of this Agreement or any of the Basic Documents or (y)
have a Material Adverse Effect.
(xi) No authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory
authority or any securities exchange is required in connection with the
execution, delivery or performance by the Company or the Subsidiary
Guarantors of the Securities Purchase Agreement or any of the Basic
Document, the compliance by the Company or the Subsidiary Guarantors
with the terms and provisions thereof or the consummation of the
transactions contemplated thereby, except (i) as may be required under
State securities or "blue sky" laws or the laws of any foreign
jurisdiction in connection with the offer and sale of the Notes (ii) as
may be required under the Act, the Trust Indenture Act, and State
securities or "blue sky" laws or the laws of any foreign jurisdiction
in connection with the exchange offer or resale registration statement
described in the Memorandum and contemplated by the Registration Rights
Agreement or (iii) as would not (individually or in the aggregate) have
a Material Adverse Effect.
(xii) Neither the Company nor any Subsidiary Guarantor is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(xiii) To the knowledge of such counsel, the Company and its
Subsidiaries have good and valid title to, or valid and enforceable
leasehold interests in, all properties and assets identified in the
Memorandum as owned or leased, respectively, by them which are material
to the business of the Company, free and clear of all Liens, except (i)
such Liens as are described in the Memorandum or (ii) Liens created in
the ordinary course of business which are Permitted Liens (as defined
in the Indenture). To the knowledge of such counsel, all of the leases
material to the business of the Company and under which the Company or
any of its Subsidiaries holds properties described in the Memorandum
are valid and binding as leased by them, with such exceptions as are
not material and do not interfere with the use made and proposed to be
made of such properties by the Company and its Subsidiaries.
A-3
(xiv) The Notes, the Subsidiary Guarantees, the Indenture, and
the Registration Rights Agreement conform in all material respects to
the description thereof in the Final Memorandum.
(xv) Assuming the accuracy of the Initial Purchasers'
representation and warranties set forth in Section 3.2 of the
Securities Purchase Agreement, and the due performance by the Initial
Purchasers of the covenants and agreements set forth in Section 3.2 of
the Securities Purchase Agreement, the offer and sale of the Notes to
the Initial Purchasers and the initial resale of the Notes by the
Initial Purchasers, in ease case in the manner contemplated by the
Securities Purchase Agreement and the Memorandum, do not require
registration under the Act and the Indenture does not require
qualification under the Trust Indenture Act.
(xvi) The statements under the caption "Business-Regulation"
in the Memorandum, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein, are
accurate, fair and complete.
(xvii) The Company and each of its Subsidiaries has such
Permits as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the
Memorandum; to the best of such counsel's knowledge, after due inquiry,
the Company and each of its Subsidiaries has fulfilled and performed
all of its material obligations with respect to such Permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the
Memorandum, such Permits contain no restriction that are materially
burdensome to the Company or any of its Subsidiaries.
(xviii) Such counsel have no reason to believe that any of the
Exchange Act Reports (other than the financial statements therein, as
to which such counsel need express no opinion), when they were filed
under the Exchange Act, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and such
counsel have no reason to believe that the Memorandum and any further
amendments or supplements thereto made by the Company prior to the Time
of Purchase (other than the financial statements therein, as to which
such counsel need express no opinion) contained as of its date or
contains as of the Time of Purchase an untrue statement of a material
fact or omitted or omits, as the case may be, to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
A-4
