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EXHIBIT 4.3
PACKAGED ICE, INC.
50,000 Units
Consisting of
$50,000,000
12% Senior Notes due 2004
and
50,000 Common Stock Purchase Warrants
PURCHASE AGREEMENT
April 11, 1997
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxx.
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Packaged Ice, Inc., a Texas corporation (the "Company"), and the
Subsidiary Guarantors (as defined below) hereby confirm their agreement with
you (the "Initial Purchaser"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
50,000 Units (as defined below) consisting of an aggregate of $50,000,000
aggregate principal amount of its 12% Senior Notes due 2004, Series A (the
"Senior Notes") and 50,000 warrants (the "Warrants") to purchase initially an
aggregate of 511,885 shares of the Company's Common Stock, par value $0.01 per
share (the "Common Stock"). The Senior Notes are to be issued under an
indenture (the "Indenture") to be dated as of April 17, 1997 by and among the
Company, the Subsidiary Guarantors and U.S. Trust Company of Texas, N.A., as
Trustee (the "Trustee"). The Senior Notes will be unconditionally guaranteed
(the "Guarantees") on a joint and several basis by Packaged Ice Leasing, Inc.,
a Nevada corporation, Southco Ice, Inc., a Texas corporation, Packaged Ice
Mission, Inc. a Texas corporation, Packaged Ice STPI, Inc., a Texas
corporation, and Packaged Ice Southwestern, Inc., a Texas corporation
(collectively, the "Subsidiary Guarantors"). The Warrants are to be issued
under a Warrant Agreement to be dated as of April 17, 1997 (the "Warrant
Agreement") of the Company for the benefit of the holders from time to time of
the Certificates evidencing the Warrants. The shares of Common Stock issuable
upon exercise of the Warrants are herein referred to as the "Warrant Shares."
The Senior Notes and the Warrants will initially be represented by 50,000 units
("Units"), each Unit consisting of $1,000 principal amount of Senior Notes and
one Warrant to purchase
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10.2377 Warrant Shares at an initial exercise price of $0.01 per Warrant Share.
The Senior Notes, the Guarantees, the Warrants and the Units are collectively
referred to herein as the "Securities."
The Securities will be offered and sold to the Initial Purchaser
without Registration under the Securities Act of 1933, as amended (the "Act"),
in reliance on an exemption pursuant to Section 4(2) under the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering circular dated March 26, 1997 (the "Preliminary
Circular"), and a final offering circular dated April 11, 1997 (the "Final
Circular"; the Preliminary Circular and the Final Circular each herein being
referred to as a "Circular"), setting forth or including a description of the
terms of the Securities, the terms of the offering of the Securities, and a
description of the business of the Company and the Subsidiary Guarantors. Any
references herein to the Preliminary Circular and the Final Circular shall be
deemed to include all amendments and supplements thereto.
The Initial Purchaser and its direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Company and the
Subsidiary Guarantors shall agree, among other things, (i) to file a
registration statement (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") registering the Senior Notes or the
Exchange Notes (as defined in the Registration Rights Agreement) under the Act
and (ii) the Securityholders' and Registration Rights Agreement, substantially
in the form attached hereto as Exhibit B (the "Securityholders' Agreement" and,
together with the Registration Rights Agreement, the "Rights Agreements").
2. Representations and Warranties. The Company and the Subsidiary
Guarantors, jointly and severally, represent and warrant to and agree with the
Initial Purchaser that:
(a) The Preliminary Circular and Final Circular with respect to
the Securities have been prepared by the Company for use by the Initial
Purchaser in connection with resales of the Securities. No order or decree
preventing the use of the Preliminary Circular or the Final Circular, or any
order asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Act, has been issued and no
proceeding for that purpose has commenced or is pending or, to the knowledge of
the Company and the Subsidiary Guarantors, is contemplated.
(b) The Preliminary Circular and the Final Circular as of their
respective dates and the Final Circular as of the Closing Date (as defined in
Section 3 below) did not or will not at any time contain an 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 2(b) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to the Initial Purchaser
furnished to the Company or the Subsidiary Guarantors in writing by the Initial
Purchaser expressly for use in the Preliminary Circular or Final Circular.
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(c) The Company has the authorized capitalization set forth in the
Final Circular; all of the outstanding shares of capital stock of the Company
and the Subsidiary Guarantors have been, and as of the Closing Date will be,
duly authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights; except as set
forth in the Final Circular, all of the outstanding shares of capital stock of
each of the Subsidiary Guarantors are, and as of the Closing Date will be,
owned, directly or indirectly, by the Company, free and clear of all liens,
encumbrances, equities and claims or restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions and except for pledged shares of Southco Ice, Inc.) or voting;
except as set forth in the Final Circular (or, if the Final Circular is not in
existence, the most recent Circular), there are no outstanding (i) options,
warrants or other rights to purchase from the Company or the Subsidiary
Guarantors, (ii) agreements or other obligations of the Company or any
Subsidiary Guarantors to issue or (iii) other rights to convert any obligation
into, or exchange any securities for, in the case of each clause (i)-(iii)
shares of capital stock of the Company or any Subsidiary Guarantor. The Company
does not have any Subsidiaries (as defined in the Indenture) except for the
Subsidiary Guarantors; except for the capital stock of the Subsidiary
Guarantors and as otherwise disclosed in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), the Company does not
own, directly or indirectly, any shares of capital stock or any other equity or
long-term debt securities or have any equity interest in any firm, partnership,
joint venture or other entity.
(d) Each of the Company and the Subsidiary Guarantors has been
duly incorporated, is validly existing and is in good standing as a corporation
under the laws of its jurisdiction of incorporation, with all requisite
corporate power and authority to own its properties and conduct its business as
now conducted, and as described in the Preliminary Circular and the Final
Circular; each of the Company and the Subsidiary Guarantors is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on the general affairs, management, business, condition (financial or
otherwise), prospects or results of operations of the Company and the
Subsidiary Guarantors, taken as a whole (any such event, a "Material Adverse
Effect").
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Senior Notes,
the Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Senior Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly 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 Senior
Notes, when delivered to and paid for by the Initial Purchaser in accordance
with the terms of this Agreement, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance 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.
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(f) Each of the Subsidiary Guarantors has all requisite corporate
power and authority to execute, deliver and perform each of its obligations
under the Guarantees. The Guarantees to be endorsed on each of the Senior
Notes, the Exchange Notes and the Private Exchange Notes have been duly and
validly authorized by each of the Subsidiary Guarantors and, when the Senior
Notes, the Exchange Notes and the Private Exchange Notes are executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Senior Notes, delivered to and paid for
by the Initial Purchaser in accordance with the terms of this Agreement, will
constitute a valid and legally binding obligation of each of the Subsidiary
Guarantors, entitled to the benefits of the Indenture and enforceable against
the Subsidiary Guarantors in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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 Company and each of the Subsidiary Guarantors have all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under the Indenture. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the "TIA").
The Indenture has been duly and validly authorized by the Company and each of
the Subsidiary Guarantors and, when executed and delivered by the Company and
each of the Subsidiary Guarantors a party thereto (assuming the due
authorization, execution and delivery by the Trustee if the Trustee is required
to execute any such document), each will constitute a valid and legally binding
agreement of the Company and each of the Subsidiary Guarantors, enforceable
against the Company and each of the Subsidiary Guarantors in accordance with
its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, 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.
(h) The Company and each of the Subsidiary Guarantors have all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under the Rights Agreements to which they are a party. Each
of the Rights Agreements has been duly and validly authorized by the Company
and each of the Subsidiary Guarantors and, when executed and delivered by the
Company and each of the Subsidiary Guarantors a party thereto (assuming the due
authorization, execution and delivery by the Initial Purchaser), will
constitute a valid and legally binding agreement of the Company and each such
Subsidiary Guarantor, enforceable against the Company and each such Subsidiary
Guarantor in accordance with its terms, except that (A) the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, 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 and (B) any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Warrant
Agreement. The Warrant Agreement has been duly and validly authorized by the
Company and, when executed and delivered by the Company, will
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constitute a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
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) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Warrants and the
Additional Warrants (as defined in Section 3 below). The Warrants and the
Additional Warrants have been duly and validly authorized by the Company and,
when executed by the Company and countersigned by the Warrant Agent in
accordance with the provisions of the Warrant Agreement and when delivered to
and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled to
the benefits of the Warrant Agreement and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, 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.
(k) The Warrant Shares have been duly and validly authorized for
issuance by the Company and when issued in accordance with the terms and
conditions contained in the Warrant Agreement upon exercise of the Warrants,
the Warrant Shares will be duly authorized, validly issued, fully paid and
non-assessable and will not be subject to any preemptive or similar rights. The
Warrant Shares have been duly reserved for issuance in accordance with the
terms of the Warrants and the Warrant Agreement.
(l) The Company and each of the Subsidiary Guarantors have all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by the Company and each of the Subsidiary Guarantors. No
consent, approval, authorization or order of any court or governmental agency
or body, or third party is required for the performance of this Agreement by
the Company or the Subsidiary Guarantors or the consummation by the Company or
the Subsidiary Guarantors of the transactions contemplated hereby, except such
as have been obtained. The execution, delivery and performance by the Company
and each of the Subsidiary Guarantors of this Agreement and the consummation by
the Company and each of the Subsidiary Guarantors of the transactions
contemplated hereby, and the fulfillment of the terms hereof, will not conflict
with or constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute as a default
under) or violation of any of (i) the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate, contract or other agreement or instrument to
which the Company or any of the Subsidiary Guarantors is a party or to which
any of them or their respective properties or assets is subject (other than the
loan agreement dated March 29, 1996 with Bank One of Texas, N.A. ("Bank One"),
as amended, and the promissory note issued by the Company thereunder and the
collateral documents ancillary thereto), (ii) the certificate of incorporation
or bylaws (or similar organizational document) of the Company or any of the
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Subsidiary Guarantors, or (iii) (assuming the accuracy of the representations
and warranties of the Initial Purchaser in Section 8 hereof) any statute,
judgment, decree, order, rule or regulation applicable to the Company or any of
the Subsidiary Guarantors or any of their respective properties or assets.
(m) None of the Company or the Subsidiary Guarantors is (i) in
violation of its certificate of incorporation or bylaws, (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation
applicable to any of them or any of their respective properties or assets,
except for any such breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect, or (iii) except as disclosed in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular), in breach of or default under (nor has any event occurred which,
with notice or passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of them is
a party or to which any of them or their respective properties or assets is
subject, except for any such breach, default, violation or event which would
not, individually or in the aggregate, have a Material Adverse Effect.
(n) The audited consolidated financial statements of the Company
and its subsidiaries included in the Final Circular (or, if the Final Circular
is not in existence, the most recent Circular) present fairly in all material
respects the consolidated financial position, the consolidated results of their
operations and their cash flows at the dates and for the periods to which they
relate and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein.
The summary and selected consolidated historical financial data in the Final
Circular (or, if the Final Circular is not in existence, the most recent
Circular) present fairly in all material respects the financial information
shown therein and have been prepared and compiled on a basis consistent with
the audited financial statements included therein, except as otherwise stated
therein. Deloitte & Touche L.L.P. and Xxxxxx Xxxxxxxx LLP (the "Independent
Accountants") are independent public accounting firms within the meaning of the
Act and the rules and regulations promulgated thereunder.
(o) The pro forma financial statements under the headings
"Unaudited Pro Forma Combined Condensed Financial Statements," "Selected
Historical and Unaudited Pro Forma Combined Financial Data," and "Unaudited Pro
Forma and Projected Combined Financial Data" (including the notes thereto) and
the other pro forma financial information (but excluding all projected or
forecasted financial information) included in the Final Circular (or, if the
Final Circular is not in existence, the most recent Circular) (i) comply as to
form in all material respects with the applicable requirements of Regulation
S-X promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (ii) have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements, and (iii)
have been properly computed on the bases described therein; the assumptions
used in the preparation of the pro forma financial data and other pro forma
financial information included in the Final Circular (or, if the Final Circular
is not in existence, the most recent Circular) are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
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(p) Except as described in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), there is not pending
or, to the best knowledge of the Company or any Subsidiary Guarantors,
threatened, any action, suit, proceeding, inquiry or investigation to which the
Company or any of the Subsidiary Guarantors is a party, or to which the
property or assets of the Company or any of the Subsidiary Guarantors are
subject, before or brought by any court or governmental agency or body which,
if determined adversely to the Company or the Subsidiary Guarantors, would
result, individually or in the aggregate, in any material adverse change in the
general affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Company and the Subsidiary
Guarantors, taken as a whole (any such event, a "Material Adverse Change"), or
which seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold hereunder or the
consummation of the other transactions described in the Final Circular (or, if
the Final Circular is not in existence, the most recent Circular).
(q) Each of the Company and the Subsidiary Guarantors owns or
possesses adequate licenses or other rights to use all trademarks, service
marks, trade names and know-how necessary to conduct the businesses now or
proposed to be operated by it as described in the Final Circular (or, if the
Final Circular is not in existence, the most recent Circular), and since
December 31, 1995, none of the company or the Subsidiary Guarantors has
received any notice of conflict with (or knows of any such conflict with)
asserted rights of others with respect to any trademarks, service marks, trade
names or know-how which, if such assertion of conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(r) Each of the Company and the Subsidiary Guarantors possesses
all licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, presently required or
necessary to own or lease, as the case may be, and to operate its respective
properties and to carry on its respective businesses as now or proposed to be
conducted as set forth in the Final Circular (or, if the Final Circular is not
in existence, the most recent Circular), except where the failure to obtain
such licenses, permits, certificates, consents, orders, approvals and other
authorizations, or to make all declarations and filings, would not,
individually or in the aggregate, have a Material Adverse Effect, and none of
the Company or any of the Subsidiary Guarantors has received any notice of any
proceeding relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) and except where such revocation or modification
would not, individually or in the aggregate, have a Material Adverse Effect.
(s) Since the respective dates as of which information is given in
the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular), except as described therein, (i) none of the Company or any
of the Subsidiary Guarantors has incurred any liabilities or obligations,
direct or contingent, or entered into or agreed to enter into any transactions
or contracts (written or oral) not in the ordinary course of business and (ii)
none of the Company or any of the Subsidiary Guarantors has purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock (other than with
respect to any such Subsidiary Guarantor, the purchase of, or dividend or
distribution on, capital stock owned by the Company).
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(t) Each of the Company and the Subsidiary Guarantors have filed
all necessary federal, state and foreign income and franchise tax returns,
except where the failure to so file such returns would not, individually or in
the aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any
Subsidiary Guarantor is contesting in good faith and for which the Company or
such Subsidiary Guarantor has provided adequate reserves, there is no tax
deficiency that has been asserted against the Company or any of the Subsidiary
Guarantors that would have, individually or in the aggregate, a Material
Adverse Effect.
(u) The projected financial and operating data included in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular) are based on assumptions which the Company and the Subsidiary
Guarantors believe to be reasonable in light of current circumstances.
(v) None of the Company, the Subsidiary Guarantors or any agent
acting on their behalf has taken or will take any action that might cause this
Agreement or the same of the Securities to violate Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, in each case as in
effect, or as the same may hereafter be in effect, on the Closing Date.
(w) Each of the Company and the Subsidiary Guarantors has good and
defensible title to all real property and good title to all personal property
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) as being owned by it and good and defensible title to
a leasehold estate in the real and personal property described in the Final
Memorandum (or, if the Final Circular is not in existence, the most recent
Circular) as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final Circular (or, if
the Final Circular is not in existence, the most recent Circular) or to the
extent the failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not, individually or in the aggregate, have
a Material Adverse Effect.
(x) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary Guarantor or any of their respective
properties or assets which would be required to be describe in a prospectus
pursuant to the Act that are not described in the Final Circular (or, if the
Final Circular is not in existence, the most recent Circular), nor are there
any material contracts or other documents which would be required to be
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) that are not so described.
(y) To the best knowledge of the Company, except as described in
the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular), each of the Company and the Subsidiary Guarantors is in
compliance in all respects with all laws, rules or regulations relating to
pollution or protection of public or employee health or the environment
("Environmental Law") and with the terms and conditions of any permit, license
or approval required thereunder in connection with the ownership, operation or
use of its business, property and assets except where the failure to be in such
compliance would not, individually or in the aggregate, have a Material Adverse
Effect;
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except as disclosed in the Final Circular (or, if the Final Circular is not in
existence, the most recent Circular), none of the Company or the Subsidiary
Guarantors is subject to any known liability, absolute or contingent, under any
Environmental Law except for any such liability which would not, individually
or in the aggregate, have a Material Adverse Effect; except as disclosed in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular), there is no civil, criminal or administrative action, suit, demand,
hearing, notice of violation or deficiency, investigation, proceeding or notice
of potential responsibility or demand letter or request for information pending
or, to their knowledge, threatened against the Company or any of the Subsidiary
Guarantors under any Environmental Law which, if determined adversely to the
Company or any such Subsidiary would, individually or in the aggregate, result
in a Material Adverse Effect.
(z) Each of the Company or 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.
(aa) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Subsidiary Guarantors which is
pending or, to the best knowledge of the Company or any Subsidiary Guarantor,
threatened.
(bb) None of the Company or the Subsidiary Guarantors has any
liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any Subsidiary Guarantor
makes or ever has made a contribution and in which any employee of the Company
or any Subsidiary Guarantor is or has ever been a participant. With respect to
such plans, the Company and each Subsidiary Guarantor is in compliance in all
material respects with all applicable provisions of ERISA.
(cc) After giving effect to the offering and sale of the
Securities neither the Company nor any of the Subsidiary Guarantors will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.
(dd) The Senior Notes, the Exchange Notes, the Warrants, the
Warrant Shares, the Common Stock, the Units, the Indenture, the Warrant
Agreement, the Additional Warrants (hereinafter defined) and the Rights
Agreements will, and this Agreement does, conform in all material respects to
the descriptions thereof in the Final Circular (or, if the Final Circular is
not in existence, the most recent Circular).
(ee) Except as disclosed in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), no holder of
securities of the Company or any Subsidiary Guarantor will be entitled to have
such securities registered under the registration statements required to be
filed by the Company pursuant to the Rights Agreements other than as expressly
permitted thereby.
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(ff) Immediately after the consummation of the transactions
contemplated by this Agreement, the Company believes that the fair value and
current fair saleable value of the assets of each of the Company and the
Subsidiary Guarantors (each on a consolidated basis) will exceed the sum of its
stated liabilities and identified contingent liabilities; neither the Company
nor any of the Subsidiary Guarantors (each on a consolidated basis) is, nor
will either the Company or any of the Subsidiary Guarantors (each on a
consolidated basis) be, after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, (a) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise insolvent.
(gg) Neither the Company nor any person acting on its behalf has
offered or sold the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as defined in
Rule 902 under the Securities Act), by means of any directed selling efforts
within the meaning of Rule 902 under the Act and the Company, any affiliate of
the Company and any person acting on its or their behalf (other than the
Initial Purchaser) has complied with and will implement the "offering
restriction" within the meaning of such Rule 902.
(hh) Within the six months preceding the date hereof, neither the
Company nor any other person acting on behalf of the Company (other than the
Initial Purchaser) has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Initial Purchaser hereunder; and the Company
will take reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act) of any Securities or any substantially similar security
issued by the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to the Company
by Xxxxxxxxx & Company, Inc.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and
sale of the Securities in the United States and to U.S. persons contemplated by
this Agreement as transactions exempt from the registration provisions of the
Act;
(ii) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchaser in
the manner contemplated by this Agreement to register any of the Securities
under the Act or to qualify the Indenture under the TIA.
(jj) No securities of the Company or any Subsidiary Guarantor are
of the same class (within the meaning of Rule 144A under the Act) as the
Securities and listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.
(kk) None of the Company or the Subsidiary Guarantors have taken,
nor will any of them take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities.
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Any certificate signed by any officer of the Company or any
Subsidiary Guarantor and delivered to the Initial Purchaser or to counsel for
the Initial Purchaser shall be deemed a joint and several representation and
warranty by the Company and each of the Subsidiary Guarantors to the Initial
Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company and the
Subsidiary Guarantors agree to issue and sell to the Initial Purchaser, and the
Initial Purchaser agrees to purchase from the Company and the Subsidiary
Guarantors 50,000 Units at a purchase price of $960.00 per Unit. One or more
certificates in definitive form for the Securities that the Initial Purchaser
has agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as Xxxxxxxxx & Company, Inc. requests upon
notice to the Company at least 24 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company and the Subsidiary Guarantors to the
Initial Purchaser, against payment by or on behalf of the Initial Purchaser of
the purchase price therefor by wire transfer (same day funds) to such account
or accounts as the Company shall specify prior to the Closing Date. Such
delivery of and payment for the Securities shall be made at 10:00 a.m., New
York time, on April 17, 1997, or at such other place, time or date as the
Initial Purchaser, on the one hand, and the Company, on the other hand, may
agree upon, such time and date of delivery against payment being herein
referred to as the "Closing Date." The Company has requested that the Closing
Date be scheduled to occur five business days after the date of this Agreement
in order to provide sufficient time to satisfy the conditions for closing set
forth in Section 7 below. With respect to Securities to be delivered in
definitive certificated form, the Company and the Subsidiary Guarantors will
make certificates for such Securities available for checking and packaging by
the Initial Purchaser at the offices of Xxxxxxxxx & Company, Inc. in New York,
New York, or at such other place as Xxxxxxxxx & Company, Inc. may designate, at
least 24 hours prior to the Closing Date. Securities to be represented by one
or more definitive global Securities in book-entry form will be deposited on
the Closing Date, by or on behalf of the Company, with The Depository Trust
Company ("DTC") or its designated custodian.
As additional compensation to the Initial Purchaser, the Company
agrees to issue to the Initial Purchaser (in such denomination or denominations
and registered in such name or names as the Initial Purchaser requests upon
notice to the Company at least 24 hours prior to the Closing Date) at the
Closing Date, for no additional consideration, warrants to purchase initially
127,972 shares of Common Stock at an initial exercise price of $.01 per share
of Common Stock (the "Additional Warrants").
4. Offering by the Initial Purchaser. The Initial Purchaser
proposes to make an offering of the Securities at the price and upon the terms
set forth in the Final Circular, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company and the Subsidiary Guarantors. Each
of the Company and the Subsidiary Guarantors jointly and severally covenants
and agrees with the Initial Purchaser that:
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(a) The Company and the Subsidiary Guarantors will not amend or
supplement the Final Circular or any amendment or supplement thereto of which
the Initial Purchaser shall not previously have been advised and furnished a
copy for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchaser shall not have given their
consent. The Company and the Subsidiary Guarantors will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Preliminary Circular or
the Final Circular that may be necessary or advisable in connection with the
resale of the Securities by the Initial Purchaser.
(b) The Company and the Subsidiary Guarantors will cooperate with
the Initial Purchaser in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the
Securities; provided, however, that in connection therewith, neither of the
Company nor any Subsidiary Guarantors shall 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 initial resale
by the Initial Purchaser of the Securities to persons other than affiliates of
the Initial Purchaser (as determined by the Initial Purchaser), any event
occurs as a result of which the Final Circular as then amended or supplemented
would include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Final Circular to
comply with applicable law, the Company and the Subsidiary Guarantors will
promptly notify the Initial Purchaser thereof and will prepare, at the expense
of the Company and the Subsidiary Guarantors, an amendment or supplement to the
Final Circular that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Circular and the Final Circular or any amendment or supplement
thereto as the Initial Purchaser may reasonable request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Circular.
(f) For and during the period ending on the date no Securities are
outstanding, the Company will furnish to the Initial Purchaser copies of all
reports and other communications (financial or otherwise) furnished by the
Company or the Subsidiary Guarantors to the Trustee, Warrant Agent or the
holders of the Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Company or the Subsidiary
Guarantors with the Commission or any national securities exchange on which any
class of securities of the Company or the Subsidiary Guarantors may be listed.
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(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared, if at all, 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 Circular.
(h) None of the Company or any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Securities in a manner which would require the registration under the Act
of the Securities.
(i) The Company and the Subsidiary Guarantors will not solicit any
offer to buy or offer to sell the Securities 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 Securities remain outstanding, the
Company and the Subsidiary Guarantors will make available, upon request, to any
seller of such Securities the information specified in Rule 144A(d)(4) under
the Act, unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(k) Each of the Company and the Subsidiary Guarantors will use its
best efforts to (i) permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in the Private Offerings, Resales and Trading through Automated
Linkages market (the "PORTAL Market") and (ii) permit the Securities to be
eligible for clearance and settlement through DTC.
(l) The Company and the Subsidiary Guarantors agree that prior to
any registration of the Securities pursuant to the Registration Rights
Agreement, or at such earlier time as may be required, the Indenture shall be
qualified under the TIA and will cause to be entered into any necessary
supplemental indentures in connection therewith.
6. Expenses. The Company and the Subsidiary Guarantors agree,
jointly and severally, 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 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Circular and the Final Circular and any amendment or
supplement thereto, (ii) all arrangements relating to the delivery to the
Initial Purchaser of copies of the foregoing documents (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the Initial
Purchaser of the Securities, (v) the qualification of the Securities under
state securities and "Blue Sky" laws, including filing fees and fees and
disbursements of counsel for the Initial Purchaser relating thereto, (vi) the
fees and expenses of counsel to the Initial Purchaser in connection with the
transactions contemplated hereby, (vii) expenses in connection with any
meetings with prospective investors in the Securities, (viii) fees and expenses
of the Trustee, the
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Warrant Agent and the transfer agent for the Common Stock including fees and
expenses of their respective counsel, (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Securities on
the PORTAL Market and (ix) any fees charged by investment rating agencies for
the rating of the Securities. The Company and the Subsidiary Guarantors agree
that they will pay in full on the Closing Date the fees and expenses referred
to in clause (vi) by delivery to counsel for the Initial Purchaser on such date
a deck payable to such counsel in the requisite amount. The Company and the
Subsidiary Guarantors shall not be liable to the Initial Purchaser for loss of
contemplated profits from the transactions covered by this Agreement.
7. Conditions of the Initial Purchaser's Obligations. The
obligation of the Initial Purchaser to purchase and pay for the Securities
shall, in its sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Company and the Subsidiary Guarantors, in form and substance satisfactory to
counsel for the Initial Purchaser, to the effect that:
(i) Each of the Company and the Subsidiary Guarantors is
duly incorporated, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Final
Circular. Each of the Company and the Subsidiary Guarantors is duly
qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect.
(ii) As of the date thereof, the Company has the
authorized, issued and outstanding capitalization set forth in the
Final Circular; all of the outstanding shares of capital stock of the
Subsidiary Guarantors are owned, directly or indirectly, by the
Company, and, to the knowledge of such counsel and except as set forth
in the Final Circular, free and clear of all liens, encumbrances,
equities and claims or restrictions on transferability or voting.
(iii) Except as set forth in the Final Circular, to the
knowledge of such counsel (A) no options, warrants or other rights to
purchase from the Company or any Subsidiary Guarantors shares of
capital stock in the Company or any Subsidiary Guarantors are
outstanding, (B) no agreements or other obligations of the Company or
any Subsidiary Guarantors to issue, or other rights to cause the
Company or any Subsidiary Guarantors to convert, any obligation into,
or exchange any securities for, shares of capital stock in the Company
or any Subsidiary Guarantors are outstanding and (C) no holder of
securities of the Company or any Subsidiary Guarantors is entitled to
have such securities registered under a registration statement filed
by the Company or any Subsidiary Guarantors under the Act with respect
to the Securities or the Warrant Shares.
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(iv) The Senior Notes have been duly and validly
authorized and executed by the Company and when delivered by the
Company (assuming the due authorization, execution, and delivery of
the Indenture by the Trustee and the due authentication of the Senior
Notes by the Trustee in accordance with the Indenture) and paid for by
the Initial Purchaser in accordance with the terms of this Agreement,
will constitute the valid and legally binding obligations of the
Company enforceable against the Company in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, 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) Each of the Subsidiary Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Guarantees. The Guarantees endorsed on each
Senior Note have been duly and validly authorized and executed by each
of the Subsidiary Guarantors and, when the Senior Notes are
authenticated by the Trustee in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will constitute the valid
and legally binding obligations of each of the Subsidiary Guarantors,
enforceable against each of the Subsidiary Guarantors 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.
(vi) Each of the Company and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute,
deliver and perform its respective obligations under the Indenture;
the Indenture is in sufficient form for qualification under the TIA;
the Indenture has been duly and validly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and
(assuming the due authorization, execution and delivery thereof by the
Trustee), constitutes the valid and legally binding agreement of the
Company and each of the Subsidiary Guarantors, enforceable against the
Company and the Subsidiary Guarantors in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, 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) Each of the Company and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Registration Rights
Agreements; the Registration Rights Agreements have been duly and
validly authorized, executed and delivered by the Company and each of
the Subsidiary Guarantors (assuming the due authorization, execution
and delivery thereof by the Initial Purchaser), constitute the valid
and legally binding agreement of the Company and each such Subsidiary
Guarantors, enforceable against the Company and each such Subsidiary
Guarantors in accordance with their terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now
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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 and (B) any rights
to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(viii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Warrant Agreement. The Warrant Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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.
(ix) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Warrants and the Additional Warrants. The Warrants and the Additional
Warrants have been duly and validly authorized and executed by the
Company and when countersigned by the Warrant Agent in accordance with
the provisions of the Warrant Agreement and delivered to and paid for
by the Initial Purchaser in accordance with the terms of this
Agreement, will have been duly issued and delivered and will
constitute the valid and legally binding obligations of the Company,
entitled to the benefits of the Warrant Agreement, and enforceable
against the Company in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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.
(x) When issued in accordance with the terms and
conditions contained in the Warrant Agreement, upon exercise of the
Warrants and upon exercise of the Additional Warrants, the Warrant
Shares and the Additional Warrant Shares, as the case may be, will be
duly authorized, validly issued, fully paid and non-assessable and
will not be subject to any preemptive or similar rights. The Warrant
Shares and the Additional Warrant Shares, as the case may be, have
been duly reserved for issuance in accordance with the terms of the
Warrants, the Warrant Agreement and the Additional Warrants, as the
case may be.
(xi) Each of the Company and the Subsidiary Guarantors has
all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby; the execution, delivery and
performance of this Agreement by the Company and the Subsidiary
Guarantors and the consummation by the Company and the Subsidiary
Guarantors of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of
the Company and each of the Subsidiary Guarantors. This Agreement has
been duly executed and delivered by the Company and the Subsidiary
Guarantors.
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(xii) The Indenture, the Senior Notes, the Guarantees, the
Warrants, the Additional Warrants, the Warrant Shares, the Common
Stock, the Registration Rights Agreements and the Warrant Agreement
conform in all material respects to the descriptions thereof contained
in the Final Circular.
(xiii) To the knowledge of such counsel, no legal or
governmental proceedings are pending or threatened to which any of the
Company or any of its Subsidiaries is a party or to which the property
or assets of the Company or any Subsidiary is subject which, if
determined adversely to the Company or the Subsidiary, would result,
individually or in the aggregate, in a Material Adverse Effect, or
which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities to be sold
hereunder or the consummation of the other transactions described in
the Final Circular under the caption "Use of Proceeds."
(xiv) The execution and delivery of the Exchange Notes and
the Private Exchange Notes by the Company have been duly authorized by
all necessary corporate action of the Company, and when the Exchange
Notes and Private Exchange Notes have been duly executed and delivered
by the Company in accordance with the terms of the Registration Rights
Agreement and the Indenture, and assuming due authentication by the
Trustee, the Exchange Notes and the Private Exchange Notes will
constitute the legal, valid, binding and enforceable obligations of
the Company, entitled to the benefits of the Indenture, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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.
(xv) The Guarantees to be endorsed on each of the Exchange
Notes and the Private Exchange Notes by the Subsidiary Guarantors have
been duly authorized by all necessary corporate action of the
Subsidiary Guarantors, and when the Exchange Notes and the Private
Exchange Notes have been duly executed and delivered by the Company
and the Subsidiary Guarantors in accordance with the terms of the
Registration Rights Agreement and the Indenture, and assuming due
authentication by the Trustee, the Guarantees will constitute the
legal, valid, binding and enforceable obligations of the Subsidiary
Guarantors, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, 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.
(xvi) The execution and delivery of this Agreement, the
Indenture, the Warrant Agreement and the Registration Rights
Agreements and the consummation of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and
sale of the Securities to the Initial Purchaser) will not, after
giving effect to the repayment of indebtedness to Bank One, conflict
with or constitute or result in a breach or violation of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any indenture, mortgage,
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deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate, contract or other agreement or
instrument known to such counsel (including in any event any of the
foregoing which have been filed by the Company with the Commission) to
which the Company or any of the Subsidiary Guarantors is a party or to
which any of them or their respective properties or assets is subject,
except for any such conflict, breach, violation, default or event
which would not, individually or in the aggregate, have a Material
Adverse Effect, (ii) the certificate of incorporation or bylaws of the
Company or any of the Subsidiary Guarantors, or (iii) (assuming the
accuracy of the representations and warranties of the Initial
Purchaser in Section 8 hereof) any statute, judgment, decree, order,
rule or regulation known to such counsel to be applicable to the
Company or any of the Subsidiary Guarantors or any of their respective
properties or assets, except for any such conflict, breach or
violation which would not, individually or in the aggregate, have a
Material Adverse Effect.
(xvii) To the knowledge of such counsel, no consent,
approval, authorization or order of any governmental authority is
required for the issuance and sale by the Company and the Subsidiary
Guarantors of the Securities to the Initial Purchaser or the other
transactions contemplated hereby.
(xviii) No registration under the Act of the Securities is
required in connection with the sale of the Securities to the Initial
Purchaser as contemplated by this Agreement and the Final Circular or
in connection with the initial resale of the Securities by the Initial
Purchaser in accordance with Section 8 of this Agreement, and prior to
the commencement of the Exchange Offer (as defined in the Registration
Rights Agreement) or the effectiveness of the Shelf Registration
Statement (as defined in the Registration Rights Agreement), the
Indenture is not required to be qualified under the TIA, in each case
assuming (i) that the purchasers who buy such Securities in the
initial resale thereof are qualified institutional buyers as defined
in Rule 144A promulgated under the Act ("QIBs" or "Qualified
Institutional Buyers"), accredited investors as defined in Rule
501(a)(1), (2), (3) or (7) promulgated under the Act ("Accredited
Investors"), or foreign purchasers (as defined in Section 8), (ii) the
accuracy of the Initial Purchaser's representations in Section 8 and
those of the Company and the Subsidiary Guarantors contained in this
Agreement regarding the absence of a general solicitation in
connection with the sale of such Securities to the Initial Purchaser
and the initial resale thereof and (iii) the due performance by the
Initial Purchaser of the agreements set forth in Section 8 hereof.
(xix) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Securities will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
(xx) Neither the Company nor any of the Subsidiary
Guarantors is an "investment company" or "promotor" or "principal
underwriter" for an "investment company" as such terms are defined in
the Investment Company Act of 1946, as amended, and the rules and
regulations thereunder.
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At the time the foregoing opinion is delivered, Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P. shall additionally state that it has participated in
conferences with officers and other representatives of the Company and the
Subsidiary Guarantors, representatives of the independent public accountants
for the Company, representatives of the Initial Purchaser and counsel for the
Initial Purchaser, at which conferences the contents of the Final Circular and
related matters were discussed, and, although it has not independently verified
and is not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Final Circular
(except to the extent specified in subsection 7(a)(ii) and (xii)), no facts
have come to its attention which lead it to believe that the Final Circular, on
the date thereof or at the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such firm need express no opinion with respect to the financial statements
and related notes thereto and the other financial or statistical data included
in the Final Circular). The opinion of Akin, Gump, Strauss, Xxxxx & Xxxx,
L.L.P. described in this subsection (a) shall be rendered to the Initial
Purchaser at the request of the Company and the Subsidiary Guarantors and shall
so state therein.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of Xxxxxx &
Xxxxxx L.L.P., counsel for the Initial Purchaser, with respect to certain legal
matters relating to this Agreement and such other related matters as the
Initial Purchaser may require. In rendering such opinion, Xxxxxx & Xxxxxx
L.L.P. shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchaser shall have received from the Independent
Accountants a comfort letter or letters dated the date hereof and the Closing
Date, in form and substance satisfactory to the Initial Purchaser, to the
effect set forth in Exhibit C hereto.
(d) The representations and warranties of each of the Company and
the Subsidiary Guarantors contained in this Agreement shall be true and correct
in all material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date; the statements of the
Company's and the Subsidiary Guarantors' officers made pursuant to any
certificate delivered in accordance with the provisions hereof shall be true
and correct in all material respects on and as of the date made and on and as
of the Closing Date; the Company and the Subsidiary Guarantors shall have
complied in all material respects with all agreements and satisfied hereunder
at or prior to the Closing Date; and, except as described in the Final Circular
(exclusive of any amendment or supplement thereto after the date hereof),
subsequent to the date of the most recent financial statements in such Final
Circular, there shall have been no Material Adverse Change or any development
that, singly or in the aggregate, is reasonably likely to cause a Material
Adverse Change.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
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(f) Subsequent to the date of the most recent financial statements
in the Final Circular (exclusive of any amendment or supplement thereto after
the date hereof), other than as described in such Final Circular, none of the
Company or the Subsidiary Guarantors shall have incurred any liabilities or
obligations, direct or contingent (other than in the ordinary course of
business), that are material to the Company or the Subsidiary Guarantors, taken
as a whole, or entered into any transactions not in the ordinary course of
business that are material to the business, condition (financial or other) or
results of operations or prospects of the Company or the Subsidiary Guarantors,
taken as a whole, and there shall not have been any adverse change in the
capital stock or long-term indebtedness of the Company or the Subsidiary
Guarantors that is material to the business, condition (financial or other) or
results of operations or prospects of the Company and the Subsidiary
Guarantors, taken as a whole.
(g) Subsequent to the date of the most recent financial statements
in the Final Circular (exclusive of any amendment or supplement thereto after
the date hereof), the conduct of the business and operations of the Company or
the Subsidiary Guarantors shall not have been interfered with by strike, fire,
flood, hurricane, accident or other calamity (whether or not insured) or by any
court or governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company or the Subsidiary Guarantors shall not
have sustained any loss or damage (whether or not insured) as a result of any
such occurrence, except any such interference, loss or damage which would not,
individually or in the aggregate, have a Material Adverse Effect.
(h) The Initial Purchaser shall have received certificates of the
Company and each of the Subsidiary Guarantors, dated the Closing Date, signed
on behalf of the Company and each of the Subsidiary Guarantors by their
respective Chairman of the Board and Chief Executive Officer and the President
and Chief Operating Officer, to the effect that:
(i) the representations and warranties of the Company and
each of the Subsidiary Guarantors contained in this Agreement are true
and correct in all material respects as of the date hereof and as of
the Closing Date, and the Company and each of the Subsidiary
Guarantors have performed all covenants and agreements and satisfied
hereunder all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date;
(ii) at the Closing Date, since the date hereof or since
the date of the most recent financial statements in the Final Circular
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, would have a Material Adverse Effect;
(iii) since the date hereof or since the date of the most
recent financial statements in the Final Circular (exclusive of any
amendment or supplement thereto after the date hereof), none of the
Company or any of the Subsidiary Guarantors has incurred any
liabilities or obligations, direct or contingent (other than in the
ordinary course of business), that are material to the Company or the
Subsidiary Guarantors or entered into any transactions not in the
ordinary course of business that are material to the business,
condition (financial or other) or results of operations or prospects
of the Company or the Subsidiary Guarantors and
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there has not been any change in the capital stock or long-term
indebtedness of the Company or the Subsidiary Guarantors that is
material to the business, condition (financial or other) or results of
operations or prospects of the Company or the Subsidiary Guarantors,
taken as a whole; and
(iv) the sale of the Securities hereunder has not been
enjoined (temporarily or permanently.
(i) On the Closing Date, the Initial Purchaser shall have received
the Rights Agreements executed by the Company and the Subsidiary Guarantors a
party thereto executed by the Company and shall have received the Additional
Warrants, and such agreements shall be in full force and effect at all times
from and after the Closing Date.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiary
Guarantors as they shall have heretofore reasonably requested from the Company
and the Subsidiary Guarantors.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchaser and counsel for the Initial Purchaser. The
Company and the Subsidiary Guarantors shall furnish to the Initial Purchaser
such conformed copies of such documents, opinions, certificates, letters,
schedules and instruments in such quantities as the Initial Purchaser shall
reasonably request.
8. Offering of Securities; Restrictions on Transfer. The Initial
Purchaser represents and agrees (as to itself only) that it is a qualified
institutional buyer as defined in Rule 144A promulgated under the Act (a
"QIB"). The Initial Purchaser agrees with the Company and the Subsidiary
Guarantors that (a) it has not and will not solicit offers for, or offer or
sell, the Securities 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 Securities only from, and will offer
the Securities only to (i) persons whom the Initial Purchaser reasonably
believes to be QIBs, if any such person is buying for one or more institutional
accounts for which such person is acting as fiduciary or agent, only when such
person has represented to the Initial Purchaser that each such account is a
QIB, to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A under the Act ("Rule 144A"), and, in each case, in
transactions under Rule 144A or (ii) a limited number of other institutional
investors reasonably believed by the Initial Purchaser to be Accredited
Investors that, prior to their purchase of the Securities, deliver to the
Initial Purchaser a letter containing the representations and agreements set
forth in Appendix A to the Final Circular (or, if the Final Circular is not in
existence, in the most recent Circular); provided, however, that, in the case
of this clause (b), in purchasing such Securities such persons are deemed to
have represented and agreed as provided under the caption "Transfer
Restrictions" contained in the Final Circular (or, if the Final Circular is not
in existence, in the most recent Circular).
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9. Indemnification and Contribution. (a) The Company and the
Subsidiary Guarantors, jointly and severally, agree to indemnify and hold
harmless the Initial Purchaser, and each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, against any losses, claims, damages or liabilities to which
any Initial Purchaser or such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of
any material fact contained in any Circular or any amendment or
supplement thereto; or
(ii) the omission or alleged omission to state, in any
Circular or any amendment or supplement thereto, a material fact
required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such
controlling person for any legal or other expenses incurred by the Initial
Purchaser or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action in respect thereof; provided,
however, the Company and the Subsidiary Guarantors will not be liable in any
such case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in any Circular or any amendment or
supplement thereto in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company or the Subsidiary
Guarantors by the Initial Purchaser specifically for use therein. This
indemnity agreement will be in addition to any liability that the Company or
the Subsidiary Guarantors may otherwise have to the indemnified parties.
Neither the Company nor the Subsidiary Guarantors shall be liable under this
Section 9 for any settlement of any claim or action effected without their
prior written consent, which shall not be unreasonably withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless
each of the Company, the Subsidiary Guarantors, their directors, their officers
and each person, if any, who controls the Company or the Subsidiary Guarantors
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company or the
Subsidiary Guarantors or any such director, officer or controlling person may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in any Circular or any amendment or supplement
thereto or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Circular or any amendment or
supplement thereto or necessary to make the statements therein no misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon an in conformity with written information concerning the Initial
Purchaser, furnished to the Company by the Initial Purchaser specifically for
use therein; and subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses incurred by
the Company or the Subsidiary Guarantors or any such director, officer or
controlling person in connection with
-22-
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investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchaser may otherwise have to the indemnified parties. The Initial
Purchaser shall not be liable under this Section 9 for any settlement of any
claim or action effected without their consent, which shall not be unreasonably
withheld. None of the Company or any of the Subsidiary Guarantors shall,
without the prior written consent of the Initial Purchaser, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which the Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by the Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to
act by or on behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 9, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof in writing; but the omission to so notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent such failure results in the forfeiture by the
indemnifying party or substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraphs (a) and
(b) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in
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addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchaser in the case
of paragraph (a) of this Section 9 or the Company or the Subsidiary Guarantors
in the case of paragraph (b) of this Section 9, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may be, who are
parties to such action or actions) or (ii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party. After such notice from the indemnifying
party to such indemnified party, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the prior written consent of the indemnifying party
(which consent shall not be unreasonably withheld), unless such indemnified
party waived in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company and
the Subsidiary Guarantors on the one hand and the Initial Purchaser on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company and the
Subsidiary Guarantors bear to the total discounts and commissions received by
the Initial Purchaser. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Subsidiary
Guarantors on the one hand, or the Initial Purchaser on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or alleged statement or omission, and any
other equitable considerations appropriate in the circumstances.
(e) The Company, the Subsidiary Guarantors and the Initial
Purchaser agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of the immediately preceding
paragraph (d). Notwithstanding the provisions of this paragraph 9, no Initial
Purchaser shall be obligated to make contributions hereunder that in the
aggregate exceed the total discounts, commissions and other compensation
received by the Initial Purchaser under this Agreement, less the aggregate
amount of any damages that the 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, and no
-24-
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person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of the immediately
preceding paragraph (d), each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribute as the Initial Purchaser,
and each director of the Company and the Subsidiary Guarantors, each officer of
the Company and the Subsidiary Guarantors and each person, if any, who controls
the Company and the Subsidiary Guarantors within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company and the Subsidiary Guarantors.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and the
Subsidiary Guarantors, their respective officers and the Initial Purchaser set
forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company and the Subsidiary
Guarantors, any of their respective officers or directors, the Initial
Purchaser or any controlling person referred to in Section 9 hereof and (ii)
delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 9 and 14
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that the Company or any of the Subsidiary Guarantors
shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on their respective part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Date:
(i) any of the Company or the Subsidiary Guarantors shall
have sustained any loss or interference with respect to its businesses
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference, in the sole judgment of the
Initial Purchaser, has had nor has a Material Adverse Effect, or there
shall have been, in the sole judgment of the Initial Purchaser, any
Material Adverse Change, or any event or development involving or
reasonably likely to cause or result in a Material Adverse Change
(including without limitation a change in management or control of the
Company or the Subsidiary Guarantors), except in each case as
described in the Final Circular (exclusive of any amendment or
supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been
established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
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(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 Purchaser, makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Final Circular;
or
(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 11
shall be without liability of any party to any other party except as provided
in Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements
set forth in the last paragraph on the front cover page and in the final two
sentences of the third paragraph under the heading "Private Placement" in the
Final Circular (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Company for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be mailed or delivered or telecopied
and confirmed in writing to (i) Xxxxxxxxx & Company, Inc.,11100 Xxxxx Xxxxxx
Xxxx., 00xx Xxxxx, Xxx Xxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx, Telecopy
No.: (000) 000-0000; and if sent to the Company or the Subsidiary Guarantors,
shall be mailed or delivered or telecopied and confirmed in writing to the
Company at 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
14. Successors. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchaser, the Company and 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 9 of this Agreement
shall also be for the benefit of any person or persons who control the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and the Subsidiary Guarantors, their respective officers and any
person or persons who control the Company
-26-
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or the Subsidiary Guarantors within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Securities from the Initial
Purchaser will be deemed a successor because of such purchase.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Subsidiary Guarantors and the Initial Purchaser.
Very truly yours,
PACKAGED ICE, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
PACKAGED ICE LEASING, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
SOUTHCO ICE, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
PACKAGED ICE MISSION, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
PACKAGED ICE STPI, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
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PACKAGED ICE SOUTHWESTERN, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXXXXX & COMPANY, INC.
By:
---------------------------------
Name:
Title:
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EXHIBIT C
Pursuant to Section 7(C) of the Purchase Agreement, Deloitte & Touche
L.L.P. shall furnish letters to the Initial Purchaser to the effect that:
(i) They are independent public accountants with respect
to the Company within the meaning of the Securities Act of 1933, as
amended (the "Act"), and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the consolidated financial
statements audited by them and included in the Offering Circular
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the related published rules
and regulations;
(iii) The unaudited summary historical financial
information with respect to the consolidated results of operations and
financial position of the Company for the five most recent fiscal
years included in the Offering Circular agrees with the corresponding
amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements of the
Company included in the Offering Circular, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited consolidated statements of
operations, consolidated balance sheets, consolidated
statements of shareholders' equity and consolidated statements
of cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles
applied on the basis substantially consistent with the basis
for the audited consolidated statements of operations,
consolidated balance sheets, consolidated statements of
shareholders' equity and consolidated statements of cash flows
included in the Offering Circular;
(B) any other unaudited income statement data and
balance sheet items of the Company included in the Offering
Circular do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent
with the basis for the corresponding
C-1
31
amounts in the audited consolidated financial statements
included in the Offering Circular;
(C) any unaudited pro forma consolidated
financial statements included in the Offering Circular do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options or
warrants, in each case which were outstanding on the date of
the latest financial statements included in the Offering
Circular) or any increase in the consolidated long-term debt
of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Initial Purchaser, or any changes
in any other items specified by the Initial Purchaser, in each
case as compared with amounts shown in the latest balance
sheet of the Company included in the Offering Circular, except
in each case for changes, increases or decreases which the
Offering Circular discloses have occurred or may occur or
which are described in such letter; and
(E) for the period from the date of the latest
financial statements included in the Offering Circular to the
specified date referred to in clause (D) there were any
decreases in consolidated net revenues or operating income or
income before income taxes or the total or per share amounts
of consolidated net income or other items specified by the
Initial Purchaser, or any increases in any items specified by
the Initial Purchaser, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the Initial
Purchaser, except in each case for decreases or increases
which the Offering Circular discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Initial Purchaser, which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Offering Circular, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
C-2
