L&W DRAFT 7/29/97
$150,000,000
DecisionOne Corporation
____% Senior Subordinated Notes due 2007
UNDERWRITING AGREEMENT
July 31, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
DecisionOne Corporation, a Delaware corporation (the
"COMPANY"), proposes to issue and sell $150,000,000 principal amount of its
___% Senior Subordinated Notes due 2007 (the "NOTES") to Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation ("YOU" or the "UNDERWRITER"). The Notes are to
be issued pursuant to the provisions of an Indenture to be dated as of August
7, 1997 (the "INDENTURE") between the Company and State Street Bank and Trust
Company, as Trustee (the "TRUSTEE").
The Notes are being issued and sold in connection with the
merger of the Company's parent, DecisionOne Holdings Corp., a Delaware
corporation ("HOLDINGS"), with Quaker Holding Co., a Delaware corporation
("QUAKER"), pursuant to an Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of May 4, 1997. The Merger Agreement provides, among
other things, for the merger of Quaker with and into Holdings (the "MERGER").
In order to fund the payment of the cash portion of the
Merger Consideration (as defined in the Prospectus), the Option Cash Proceeds
(as defined in the Prospectus) and the Warrant Cash Proceeds (as defined in the
Prospectus), to refinance $____ million of outstanding indebtedness of the
Company (the "REFINANCING"), and to pay expenses incurred in connection with
the Merger, (i) the Company (A) is issuing the Notes and (B) will enter into a
syndicated senior secured loan facility (the "NEW CREDIT FACILITY") providing
for term loan borrowings in
the aggregate principal amount of approximately $470 million and revolving loan
borrowings of approximately $105 million, (ii) Quaker will issue units (the
"UNITS"), each consisting of $1,000 principal amount at maturity of ___% Senior
Discount Debentures due 2008 (the "DEBENTURES") and warrants (the "WARRANTS")
to purchase common stock of Quaker for aggregate gross proceeds of $85 million
and (iii) the DLJMB Funds (as defined in the Prospectus) and the Institutional
Investors (as defined in the Prospectus) will purchase 9,782,508 shares of
common stock of Quaker and may acquire up to 1,417,180 DLJMB Warrants (as
defined in the Prospectus) for an aggregate of approximately [$225] million
(the "Equity Investment"). At the effective time of the Merger (the "EFFECTIVE
TIME"), the Company will borrow all term loans available under the New Credit
Facility and [$8.3 million] of revolving loans available thereunder.
Approximately $___ million of the proceeds of such borrowings and the proceeds
from the sale of Notes hereunder will be distributed to Holdings in the form of
a dividend and the remaining $____ million will be loaned to Holdings pursuant
to an intercompany note (the "INTERCOMPANY NOTE"). In addition, at the
Effective Time, each share of common stock of Quaker will become one share of
common stock of Holdings ("Holdings Common Stock"), each warrant to acquire
common stock of Quaker will by its terms become exercisable for an equal number
of shares of Holdings Common Stock and Holdings will assume and succeed to the
obligations of Quaker with respect to the Debentures, the Warrants and the
DLJMB Warrants.
SECTION 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Notes. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Act, is hereinafter referred to as the "REGISTRATION
STATEMENT;" and the prospectus in the form first used to confirm sales of the
Notes is hereinafter referred to as the "PROSPECTUS." If the Company has filed
or is required pursuant to the terms hereof to file a registration statement
pursuant to Rule 462(b) under the Act registering additional ___% Senior
Subordinated Notes due 2007 (a "RULE 462(B) REGISTRATION STATEMENT"), then,
unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase. On the basis of
the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to issue and sell, and the
Underwriter agrees to purchase from the Company all of the Notes at a price
equal to ___% of the principal amount thereof (the "PURCHASE PRICE") plus
accrued interest thereon, if any, from ______, 1997 to the date of payment and
delivery.
SECTION 3. Terms of Public Offering. The Company is advised
by you that you propose (1) to make a public offering of the Notes as soon
after the execution and delivery of this Agreement as in your judgment is
advisable and (2) initially to offer the Notes upon the terms set forth in the
Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriter
of and payment for the Notes shall be made at 10:00 A.M., New York City time,
on August 7, 1997 (the
"CLOSING DATE") at such place as you shall designate. The Closing Date and the
location of delivery of and payment for the Notes may be varied by agreement
between you and the Company.
Certificates for the Notes shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day prior to the Closing Date. Certificates in definitive
form evidencing the Notes will be delivered to you on the Closing Date with any
transfer taxes thereon duly paid by the Company, for your account, against
payment to the Company of the Purchase Price therefor by wire transfer of
Federal or other funds immediately available in New York City.
SECTION 5. Agreements of the Company. The Company agrees with
you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (1) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (2) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (3) when
any amendment to the Registration Statement becomes effective, (4) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement
has become effective and (5) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you such number of conformed copies
of the Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(c) To prepare the Prospectus in a form approved by you and
to file the Prospectus in such form with the Commission within the applicable
period specified in Rule 424(b) under the Act; not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and to
prepare and file with the Commission, promptly upon your reasonable request,
any amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Notes by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
3
(d) Prior to 4:00 P.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriter a prospectus
is required by law to be delivered in connection with sales by the Underwriter
or a dealer, to furnish in New York City to the Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as the Underwriter or any such dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriter, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriter, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare and file with the Commission an appropriate amendment or supplement to
the Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to the Underwriter and to any dealer as many copies thereof
as the Underwriter or any such dealer may reasonably request.
(f) Prior to any public offering of the Notes, to cooperate
with you and counsel for the Underwriter in connection with the registration or
qualification of the Notes for offer and sale by you and by dealers under the
state securities or Blue Sky laws of such jurisdictions as you may request, to
continue such qualification in effect so long as required for distribution of
the Notes and to file such consents to service of process or other documents as
may be necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be required in connection
therewith to register or qualify as a foreign corporation in any jurisdiction
in which it is not now so qualified or to take any action that would subject it
to general consent to service of process or taxation other than as to matters
and transactions relating to the Prospectus, the Registration Statement, any
preliminary prospectus or the offering or sale of the Notes, in any
jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its security
holders as soon as practicable an earnings statement covering the twelve-month
period ending ______________, that shall satisfy the provisions of Section
11(a) of the Act, and to advise you in writing when such statement has been so
made available.
(h) So long as the Notes are outstanding and so long as the
Indenture so requires to mail and make generally available as soon as
practicable after the end of each fiscal year to the record holders of the
Notes (1) all documents filed with the Commission by the Company pursuant to
Sections 13, 14 and 15 of the Securities Exchange Act of 1934, as amended (the
"REPORTS"), which requirement to furnish shall be deemed satisfied upon the
filing of such Reports with the Commission and (2) for any period during which
the Company no longer files such Reports with the Commission, to mail and make
generally available to the record holders of the Notes the information that
would otherwise be included in Reports as soon as reasonably available.
4
(i) So long as the Notes are outstanding, to furnish to you
as soon as available copies of all reports furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to
be paid all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Notes under the Act and all other fees or expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to
any of the foregoing prior to or during the period specified in Section 5(d),
including the mailing and delivering of copies thereof to the Underwriter and
dealers in the quantities specified herein, (ii) all costs and expenses related
to the transfer and delivery of the Notes to the Underwriter, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Notes, (iv) all expenses
in connection with the registration or qualification of the Notes for offer and
sale under the securities or Blue Sky laws of the several states and all costs
of printing or producing any Preliminary and Supplemental Blue Sky Memoranda in
connection therewith (including the filing fees and fees and disbursements of
counsel for the Underwriter in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriter in connection with the review and
clearance of the offering of the Notes by the National Association of
Securities Dealers, Inc., (vi) the cost of printing certificates representing
the Notes, (vii) the costs and charges of any transfer agent, registrar and/or
depositary (including the Depository Trust Company), (viii) the fees and
expenses of the qualified independent underwriter (the "QIU") (including the
fees and disbursements of counsel to the QIU), (ix) any fees charged by rating
agencies for the rating of the Notes, (x) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture and the Notes and
(xi) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section.
(k) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company or
any warrants, rights or options to purchase or otherwise acquire debt
securities of the Company substantially similar to the Notes (other than (1)
the Notes and (2) commercial paper issued in the ordinary course of business),
without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.
(l) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of the
Notes.
5
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Notes.
(n) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Notes, to file a Rule
462(b) Registration Statement with the Commission registering the Notes not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement and to pay to the Commission the filing fee for such
Rule 462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
(o) The Company will, for so long as any of the Notes are
outstanding and if, in the reasonable judgment of the Underwriter or its
counsel, the Underwriter or any of its affiliates (as defined in the rules and
regulations under the Act) is required to deliver a prospectus (any such
prospectus, a "MARKET MAKING PROSPECTUS") in connection with sales of the
Notes, to (i) provide the Underwriter, without charge, as many copies of the
Market Making Prospectus as the Underwriter may reasonably request, (ii)
periodically amend the Registration Statement so that the information contained
in the Registration Statement complies with the requirements of Section 10(a)
of the Act, (iii) amend the Registration Statement or amend or supplement the
Market Making Prospectus when necessary to reflect any material changes in the
information provided therein and promptly file such amendment or supplement
with the Commission, (iv) provide the Underwriter with copies of each amendment
or supplement so filed and such other documents, including opinions of counsel
and "comfort" letters, as the Underwriter may reasonably request and (iv)
indemnify the Underwriter with respect to the Market Making Prospectus and if
applicable, contribute to any amount paid or payable by the Underwriter in a
manner substantially identical to that specified in Section 7 hereof (with
appropriate modifications). The Company consents to the use, subject to the
provisions of the Act and the state securities or Blue Sky laws of the
jurisdictions in which the Notes are offered by the Underwriter, of each Market
Making Prospectus.
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to the Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after
the effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no later
than 10:00 P.M., New York City time, on the date of this Agreement; and no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it became effective, did not contain
and, as amended, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Registration
Statement (other than any Rule
6
462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (B) will comply in all material respects with the Act and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Underwriter furnished to the
Company in writing expressly for use therein nor to that part of the
Registration Statement that constitutes the Statement of Eligibility (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT").
The Company hereby acknowledges that the only information furnished to the
Company by the Underwriter for use in the Registration Statement and the
Prospectus is the information contained under the caption "Underwriting."
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon information
relating to the Underwriter furnished to the Company in writing by you
expressly for use therein. The Company hereby acknowledges that the only
information furnished to the Company by the Underwriter for use in the
Registration Statement, the Prospectus and each preliminary prospectus filed as
part of the Registration Statement is the information contained under the
caption "Underwriting."
(d) Each of the Company and its Subsidiaries, (as defined
below) has been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not reasonably be expected to (i) have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole or
(ii) in any manner draw into question the validity of (I) this Agreement, the
Indenture or the Notes or (II) the New Credit Facility, the Intercompany Note
or the Tax Sharing Agreement (as defined in the Indenture) (each of the
documents referred to in this clause II, the "OPERATIVE DOCUMENTS") (the events
referred to in clauses (i) and (ii), a "MATERIAL ADVERSE EFFECT").
7
(e) The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(f) Except as otherwise set forth in the Prospectus, all of
the outstanding shares of capital stock of each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through
one or more subsidiary, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "LIEN"). No subsidiary
listed on Schedule I hereto, other than [LIST THE MATERIAL SUBSIDIARIES]
(collectively, the "Subsidiaries"), has (i) contributed in the last three
fiscal years or in the three-month period ended March 31, 1997 greater than 10%
of the Company's revenues, EBITDA (as defined in the Registration Statement and
Prospectus) or net income or (ii) at any of December 31, 1996 or March 31, 1997
constituted greater than 10% of the total assets of the Company.
(g) The Indenture has been duly qualified under the Trust
Indenture Act and, on the Closing Date, will have been duly authorized,
executed and delivered by the Company and will be a valid and binding agreement
of the Company, enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(h) The Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Notes have been executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriter in accordance
with the terms of this Agreement, the Notes will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(i) The Notes conform as to legal matters to the description
thereof contained in the Prospectus.
(j) All of the indebtedness represented by the Notes, is
being incurred, and all of the indebtedness being repaid in the Refinancing was
incurred, for proper purposes and in good faith and the Company was, at the
time of the incurrence of the indebtedness being repaid in the Refinancing, and
that both as of the date hereof and, immediately subsequent to the Effective
Time and the transactions contemplated hereby and by each of the Operative
Documents, (a) the fair value and present fair saleable value of the Company's
assets exceeds and would exceed its stated liabilities and identified
contingent liabilities, (b) the Company should be able to pay its debts as they
become absolute and matured and (c) the capital of the Company is not and would
not be unreasonably small for the business in which it is engaged and for the
business proposed to be conducted after consummation of the Merger.
8
(k) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which such
entity is a party or by which any such person or its respective property is
bound.
(l) The execution, delivery and performance of this
Agreement, the Indenture, the Notes and the Operative Documents by the Company,
compliance by the Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
of its subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, or violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over the Company, any of its subsidiaries or their
respective property.
(m) When executed and delivered by the Company and the other
parties thereto, each of the Operative Documents will be the valid and legally
binding obligation of the Company enforceable against the Company, and to the
best of the Company's knowledge, each of the other parties thereto, in
accordance with its respective terms, except as (a) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting the
creditors' rights generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(n) No action has been taken and no law, statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency or body which prevents the execution, delivery and performance of any of
this Agreement, the Indenture, the Notes or any of the Operative Documents or
the issuance of the Notes or the Units, or suspends the sale of the Notes or
the Units in any jurisdiction referred to in Section 5(f); and no injunction,
restraining order or other order or relief of any nature by a federal or state
court or other tribunal of competent jurisdiction has been issued with respect
to the Company or any of its Subsidiaries which would prevent or suspend the
issuance or sale of the Notes or the Units in any jurisdiction referred to in
Section 5(f).
(o) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its Subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus
and are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
9
(p) Neither the Company nor any of its Subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect or
except as otherwise set forth in the Prospectus.
(q) Except as otherwise set forth in the Prospectus, there
are no costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(r) Each of the Company and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and other
approvals (each an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without
limitation, under any applicable Environmental Laws, as are necessary to own,
lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make
any such filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect. Each such Authorization is valid and in full force and
effect and each of the Company and its Subsidiaries is in compliance with all
the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto; and
no event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its Subsidiaries; except, in both
circumstances, where such failure to be valid and in full force and effect or
to be in compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(s) this Agreement has been duly authorized, executed and
delivered by the Company.
(t) Deloitte & Touche LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(u) The consolidated historical financial statements,
together with related schedules and notes forming part of the Registration
Statement and the Prospectus (and any amendment or supplement thereto), present
fairly in all material respects the consolidated historical financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the
10
respective periods to which they apply; such historical statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other historical financial information and
data set forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company, except as otherwise disclosed therein.
(v) The Company is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(w) Except (a) as otherwise set forth in the Prospectus and
(b) for the registration rights agreement, dated as of January 27, 1994, among
Onset Corporation and the security holders party thereto, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Notes registered
pursuant to the Registration Statement.
(x) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company or
any of its Subsidiaries and (iii) neither the Company nor any of its
Subsidiaries has incurred any material liability or obligation, direct or
contingent which are material to the Company and its Subsidiaries, taken as a
whole.
(y) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(z) The pro forma financial statements of the Company and its
subsidiaries and the related notes thereto set forth in the Registration
Statement and the Prospectus (and any supplement or amendment thereto) have
been prepared on a basis consistent with the historical financial statements of
the Company and its subsidiaries, give effect to the assumptions used in the
preparation thereof on a reasonable basis and in good faith and present fairly
in all material respects the historical and proposed transactions contemplated
by the Registration Statement and the Prospectus as and to the extent set forth
in the notes thereto. Such pro forma financial statements have been prepared in
accordance with the applicable requirements of Rule 11-02 of Regulation S-X
promulgated by the Commission. The other pro forma financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any supplement or amendment thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with the pro forma
financial statements, except as otherwise disclosed therein.
11
(aa) There is no (i) material unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against
the Company or any of its Subsidiaries before the National Labor Relations
Board or any state or local labor relations board or (ii) strike, labor
dispute, slowdown or stoppage pending or threatened against the Company or any
of its Subsidiaries, except for such actions specified in clause (i) or (ii)
above, which, singly or in the aggregate, would not have a Material Adverse
Effect. To the best of the Company's knowledge, no collective bargaining
organizing activities are taking place with respect to the Company or any of
its Subsidiaries.
(ab) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(ac) Except as otherwise set forth in the Prospectus, the
Company and its subsidiaries own or possess, or can acquire on reasonabl terms,
all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks, service marks
and trade names ("intellectual property") currently employed by them in
connection with the business now operated by them except where the failure to
own or possess or otherwise be able to acquire such intellectual property would
not, singly or in the aggregate, have a Material Adverse Effect; and, to the
best of the Company's knowledge, neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(ad) Each certificate signed by any officer of the Company
and delivered to the Underwriter or counsel for the Underwriter shall be deemed
to be a representation and warranty by the Company to the Underwriter as to the
matters covered thereby.
SECTION 7. Indemnification. (a) The Company agrees to
indemnify and hold harmless the Underwriter, its directors, its officers and
each person, if any, who controls the Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not
12
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission (i) based upon information relating to the Underwriter
furnished in writing to the Company by the Underwriter expressly for use
therein or (ii) that is contained in that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act. The foregoing indemnity agreement with respect to any untrue
statement contained in or omission from a preliminary prospectus shall not
inure to the benefit of an Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Notes, or any
director or officer of or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented, if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Notes to such person and
the untrue statement contained in or omission from such preliminary prospectus
was corrected in the Prospectus (or the Prospectus as amended or supplemented).
(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by or on behalf of the Underwriter expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to Section 7(a) or
7(b) (the "Indemnified Party"), the Indemnified Party shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall
not be required to assume the defense of such action pursuant to this Section
7(c), but may employ separate counsel and participate in the defense thereof,
but the fees and expenses of such counsel, except as provided below, shall be
at the expense of the Underwriter) subject to repayment to the Indemnifying
Party if it is finally judicially determined by a court of competent
jurisdiction that such Indemnified Party is not entitled to indemnification.
Any Indemnified Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Party unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the Indemnifying Party, (ii) the Indemnifying Party shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the Indemnified Party or (iii) the named parties to any such action (including
any impleaded parties) include both the Indemnified Party and the Indemnifying
Party, and the Indemnified Party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party (in which case
13
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of the Indemnified Party). In any such case, the Indemnifying
Party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, in the case of parties
indemnified pursuant to Section 7(a), and by the Company, in the case of
parties indemnified pursuant to Section 7(b). The Indemnifying Party shall
indemnify and hold harmless the Indemnified Party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without
its written consent if the settlement is entered into more than twenty business
days after the Indemnifying Party shall have received a request from the
Indemnified Party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the Indemnifying
Party) and, prior to the date of such settlement, the Indemnifying Party shall
have failed to comply with such reimbursement request. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the Indemnified Party
is or could have been a party and indemnity or contribution may be or could
have been sought hereunder by the Indemnified Party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the Indemnified
Party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
Indemnified Party.
(d) To the extent the indemnification provided for in this
Section 7 is unavailable to an Indemnified Party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the offering
of the Notes or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriter on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company, and the total underwriting
discounts and commissions received by the Underwriter, bear to the total price
to the public of the Notes, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company on the one hand and
the Underwriter on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter and the parties'
relative intent,
14
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
incurred by such Indemnified Party in connection with investigating or
defending any matter, including any action, that could have given rise to such
losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Party at law or in equity.
SECTION 8. Conditions of Underwriter's Obligations. The
obligation of the Underwriter to purchase the Notes under this Agreement is
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) On or after the date hereof there shall not have occurred
any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating of the Company, or
any securities of the Company or in the rating outlook for the Company
(including, without limitation, the placing of any of the foregoing ratings on
creditwatch with negative or developing implications or under review with an
uncertain direction) by any
15
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxxxxx and
Xxxxxx X. Xxxxxxx, in their capacities as Chairman and Chief Executive Officer,
Vice President and Chief Financial Officer and General Counsel and Corporate
Secretary of the Company, confirming to the best of their respective knowledge
on behalf of the Company the matters set forth in Sections 8(a), 8(b), 8(c) and
8(e).
(e) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or
any development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market
the Notes on the terms and in the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the Closing Date,
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Company, to the effect that:
(i) each of the Company and its Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriter in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except (a) as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies
generally and (b) as such enforcement may be limited by general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except (a) as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or
16
similar laws affecting creditor's rights and remedies generally and
(b) as such enforcement may be limited by general principles of
equity, regardless of whether enforcement is sought in a proceeding at
law or in equity;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) each of the Operative Documents is the valid and legally
binding obligation of the Company enforceable against the Company, in
accordance with its respective terms, except as (a) as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditor's rights and remedies
generally, (b) as such enforcement may be limited by general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity and (c) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi) such counsel has been advised by the Commission that the
Registration Statement has become effective under the Act, no stop
order suspending its effectiveness has been issued and no proceedings
for that purpose are, to the best of such counsel's knowledge after
due inquiry, pending before or contemplated by the Commission;
(vii) the statements under the captions "The Merger and
Merger Financing," "Risk Factors--Fraudulent Transfer Statutes," "Risk
Factors--Restrictions Imposed by Terms of the Company's Indebtedness,"
"Risk Factors--Subordination; Asset Encumbrance," "Certain
Relationships and Related Transactions," "Description of the New
Credit Facility," "Description of the Senior Subordinated Notes,"
"Underwriting" and the description of the existing employment and
severance agreements under the caption "Executive
Compensation--Existing Employment and Severance Agreements" in the
Prospectus and Items 14 and 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings;
(viii) the execution, delivery and performance of this
Agreement, the Indenture and the Notes by the Company, will not (A)
require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body (except as may be required under the Act or other securities or
Blue Sky laws of various states or by the National Association of
Security Dealers, Inc. ("NASD"); (B) conflict with or constitute a
breach of any of the terms or provisions of, or default under, the
certificate of incorporation or by-laws of the Company or any of its
subsidiaries; (C) require any consent or approval (which has not been
obtained) of parties to, or conflict with or constitute a breach of
any of the terms or provisions of, or default under, any of the
agreements filed as an exhibit to the Registration Statement (which
has not been waived); (D) violate or conflict with any laws or rules
or regulations, rulings or court decrees as applicable to the Company
or any of its subsidiaries or their respective
17
properties; or (E) result in the creation or imposition of any Lien on
any material asset of the Company or any of its subsidiaries under any
of its agreements filed as an exhibit to the Registration Statement,
except as, with respect to clauses (C) and (E) above, would not have a
Material Adverse Effect;
(ix) the Company is not and, after giving effect to the
Merger, the offering and sale of the Notes and the application of the
proceeds thereof and the other transactions contemplated by this
Agreement and the Operative Documents in each case, as described in
the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended; and
(x) (A) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial data included therein as to which no opinion need
be expressed) comply as to form with the Act, (B) such counsel has no
reason to believe that at the time the Registration Statement became
effective or on the date of this Agreement, the Registration Statement
and the prospectus included therein (except for the financial
statements and other financial data as to which such counsel need not
express any belief and except for that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1)
under the Trust Indenture Act) contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) such counsel has no reason to believe that the
Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data and the Form T-1, as
aforesaid) contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The opinion of Xxxxx Xxxx & Xxxxxxxx described in
Section 8(f) above shall be rendered to you at the request of the
Company and shall so state therein.
(g) You shall have received on the Closing Date, an opinion
(satisfactory to you and counsel for the Underwriter), dated the Closing Date,
of Xxxxxx X. Xxxxxxx, General Counsel and Corporate Secretary of the Company,
to the effect that:
(i) the entities listed on Schedule I hereto are the only
direct or indirect subsidiaries of the Company;
(ii) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described;
(iii) to his knowledge, neither the Company nor any of its
subsidiaries has violated any Environmental Law or any provisions of
the Employee Retirement Income Security Act of 1974, as amended, or
the rules and regulations promulgated thereunder,
18
except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect or except as otherwise set forth in
the Prospectus;
(iv) to his knowledge: each of the Company and its
subsidiaries has such Authorizations of, and has made all filings with
and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse
Effect; each such Authorization is valid and in full force and effect
and each of the Company and its subsidiaries is in material compliance
with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its
subsidiaries; except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or
the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect;
(v) each of the Company and its Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect;
(vi) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights;
(vii) all of the outstanding shares of capital stock of each
of the Company's Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free
and clear of any Lien;
(viii) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best of
such counsel's knowledge, neither the Company nor any of its
subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party
19
or by which the Company or any of its subsidiaries or their respective
property is bound; and
(ix) to the best of such counsel's knowledge, except (a) as
otherwise set forth in the Prospectus and (b) for the registration
rights agreement, dated as of January 27, 1994, among Onset
Corporation and the security holders party thereto, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with
the Notes registered pursuant to the Registration Statement.
The opinion of Xxxxxx X. Xxxxxxx described in Section 8(g)
above shall be rendered to you at the request of the Company and shall so state
therein.
In giving such opinions with respect to the matters covered
by Section 8(f)(xv), counsel for the Company and counsel for the Underwriters
may state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification except as specified.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxx & Xxxxxxx, counsel for the Underwriter in
form and substance reasonably satisfactory to the Underwriter.
(i) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Deloitte & Touche
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(j) The Equity Investment shall have been consummated as
described in the Registration Statement and the Prospectus.
(k) The Company shall have entered into the Indenture and the
Underwriter shall have received counterparts, as executed, thereof.
(l) The Company shall have entered into each of the Operative
Documents (the form and substance of which shall be reasonably acceptable to
the Underwriter) and the Underwriter shall have received counterparts,
conformed as executed, of each thereof and of all other documents and
agreements entered into in connection therewith.
(m) Each condition to closing contemplated by the
underwriting agreement relating to the offering of the Units by Quaker (other
than the issuance and sale of the Notes pursuant hereto) shall have been
satisfied or waived. On the Closing Date, the closing under the
20
underwriting agreement relating to the offering of the Units by Quaker shall
have been consummated on terms that conform in all material respects to the
description thereof in the Registration Statement and the Prospectus and the
Underwriter shall have received evidence satisfactory to it of the consummation
thereof.
(n) A registration statement on an appropriate form under the
Act containing a Market Making Prospectus in connection with sales of the
Securities shall have become effective under the Act, no stop order suspending
the effectiveness of such registration statement shall have been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge after
due inquiry, pending before or contemplated by the Commission.
(o) Each condition to closing contemplated by the New Credit
Facility (other than the issuance and sale of the Notes pursuant hereto) shall
have been satisfied or waived. There shall exist at and as of the Closing Date
(after giving effect to the transactions contemplated by this Agreement and the
other Operative Documents) no conditions that would constitute a default (or an
event that with notice or the lapse of time, or both, would constitute a
default) under the New Credit Facility. On the Closing Date, the closing under
the New Credit Facility shall have been consummated on terms that conform in
all material respects to the description thereof in the Registration Statement
and the Prospectus and the Underwriter shall have received evidence
satisfactory to it of the consummation thereof.
(p) Each condition to closing contemplated by each of the
other Operative Documents (other than the issuance and sale of the Notes
pursuant hereto) shall have been satisfied or waived. There shall exist at and
as of the Closing Date (after giving effect to the transactions contemplated by
this Agreement and the other Operative Documents) no conditions that would
constitute a default (or an event that with notice or the lapse of time, or
both, would constitute a default), breach or violation of any of the Operative
Documents. On the Closing Date, each of the Operative Documents shall have been
entered into on terms that conform in all material respects to the description
thereof in the Registration Statement and the Prospectus and the Underwriter
shall have received evidence satisfactory to it of the execution thereof and
the consummation of the transactions contemplated thereby.
(q) Each condition to closing contemplated by the Merger
Agreement (other than the issuance and sale of the Notes pursuant hereto) shall
have been satisfied or waived. There shall exist at and as of the Closing Date
(after giving effect to the transactions contemplated by this Agreement and the
other Operative Documents) no conditions that would constitute a default (or an
event that with notice or the lapse of time, or both, would constitute a
default) under the Merger Agreement. On the Closing Date, the Merger shall have
been consummated on terms that conform in all material respects to the
description thereof in the Registration Statement and the Prospectus and the
Underwriter shall have received evidence satisfactory to it of the consummation
thereof. The Company shall deliver to the Underwriter copies of the certificate
of merger required under Delaware law to be filed in order to effect the
Merger, as certified by the Secretary of State of Delaware on the Closing Date.
21
(r) On the Closing Date, you shall have received a copy of
the solvency opinion by an independent third party addressed to the Boards of
Directors of the Company and Holdings as to the solvency of the Company and its
subsidiaries following the consummation of the transactions contemplated herein
and by the Merger Agreement.
(s) On the Closing Date, the existing revolving credit
facility will be prepaid in full and the Underwriter shall have received
evidence of such repayment.
(t) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company at or prior to the
Closing Date.
SECTION 9. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Company if any of the following
has occurred: (1) any outbreak or escalation of hostilities or other national
or international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market
the Notes on the terms and in the manner contemplated in the Prospectus, (2)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (3) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (4) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, (5) the declaration of a
banking moratorium by either federal or New York State authorities or (6) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
SECTION 10. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to DecisionOne Corporation, 00 Xxxx Xxxxxxxxxx Xxxx, Xxxxxx, XX 00000,
Attention: General Counsel, with a copy to Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000; Attention: Xxxxxxx X. Xxxxxxxxx, Esq. and (ii) if
to the Underwriter, to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Syndicate Department, with a copy
to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000; Attention: Xxxx X.
Xxxxx, Esq., or in any case to such other address as the person to be notified
may have requested in writing.
22
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the
Underwriter set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and
payment for the Notes, regardless of (1) any investigation, or statement as to
the results thereof, made by or on behalf of the Underwriter, the officers or
directors of the Underwriter, any person controlling the Underwriter, the
Company, the officers or directors of the Company or any person controlling the
Company, (2) acceptance of the Notes and payment for them hereunder and (3)
termination of this Agreement.
If for any reason the Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Underwriter for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by it. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has
agreed to pay pursuant to Section 5(i) hereof. The Company also agrees to
reimburse the Underwriter, its directors and officers and any persons
controlling the Underwriter for any and all fees and expenses (including,
without limitation, the fees disbursements of counsel) incurred by it in
connection with enforcing its rights hereunder (including, without limitation,
pursuant to Section 7 or 8 hereof).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Underwriter, the Underwriter's directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include a purchaser of any of the Notes from the
Underwriter merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
23
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Underwriter.
Very truly yours,
DECISIONONE CORPORATION
By:
-----------------------------------------
Name:
Title:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
24
SCHEDULE I
Subsidiaries of DecisionOne Corporation
Properties Holding Corporation
Properties Development Corporation
International Computers Properties Corporation
DecisionOne (Canada) Corporation
DecisionOne Supplies, Inc.
Decision Data Computer International, S.A.
Decision Data Investment Corporation
Decision Data International Corporation
