EXHIBIT 4.12
JOSTENS, INC.
225,000 Units Consisting of
$225,000,000 12 3/4% Senior Subordinated Notes due 2010
and Warrants to Purchase 425,060 Shares
of Class E Common Stock
PURCHASE AGREEMENT
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May 5, 2000
DEUTSCHE BANK SECURITIES INC.
UBS WARBURG LLC
XXXXXXX, XXXXX & CO.
c/o Deutsche Bank Securities Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Jostens, Inc., a Minnesota corporation (the "Company"), and American
Yearbook Company, Inc., a Kansas corporation (the "Guarantor"), hereby confirm
their agreement with you (the "Initial Purchasers"), as set forth below.
1. The Securities. The Company proposes to issue and sell to the Initial
Purchasers 225,000 Units (the "Units") consisting of $225,000,000 aggregate
principal amount of its 12 3/4% Senior Subordinated Notes due 2010 (the "Notes")
and Warrants (the "Warrants") to purchase 425,060 shares of the Company's Class
E Common Stock, par value $0.01 per share (the "Warrant Shares"), determined on
a fully diluted basis as of the Closing Date (as defined herein). The Notes will
be unconditionally guaranteed (the "Guarantee") on a senior subordinated basis
by the Guarantor. The Units, the Notes, the Guarantee and the Warrants are
collectively referred to herein as the "Initial Securities." The Initial
Securities and the Warrant Shares are collectively referred to herein as the
"Securities."
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The Notes and Guarantee are to be issued under an indenture (the
"Indenture") to be dated as of the Closing Date by and among the Company, the
Guarantor and The Bank of New York, as Trustee (the "Trustee"). The Warrants
will be issued pursuant to a warrant agreement (the "Warrant Agreement") to be
dated as of the Closing Date by and between the Company and The Bank of New
York, as warrant agent (the "Warrant Agent").
The Units will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
In connection with the sale of the Units, the Company has prepared a
preliminary offering memorandum dated April 17, 2000 (the "Preliminary
Memorandum") and a final offering memorandum dated May 5, 2000 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Units, the terms of the offering of the Units, a description of
the Company and any material developments relating to the Company occurring
after the date of the most recent historical financial statements included
therein.
The Initial Purchasers and their direct and indirect transferees of the
Notes and Guarantee 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
Guarantor will agree, among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Notes and/or the Exchange Notes (as defined in the
Registration Rights Agreement) under the Act.
Holders (including subsequent transferees) of Warrants and Warrant Shares
will have the registration rights with respect to the Warrants and Warrant
Shares set forth in a registration rights agreement (the "Warrant Registration
Rights Agreement") between the Company and the Initial Purchasers to be dated as
of the Closing Date, and in form and substance satisfactory to the Initial
Purchasers and conforming to the description thereof in the Final Memorandum.
This Agreement, the Securities, the Exchange Notes, the Indenture, the
Registration Rights Agreement, the Warrant Agreement and the Warrant
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Unit Documents."
The Units are being sold in connection with (i) the consummation of a
merger (the "Merger") of Saturn Acquisition Corporation with and into the
Company, pursuant to an Agreement and Plan of Merger dated as of December 27,
1999 (the "Merger Agreement"), and (ii) the repayment of all of the Company's
existing debt (the "Debt Refinancing"). In addition, the Company will (i) enter
into a credit agreement (the "Credit Agreement") with
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The Chase Manhattan Bank, as administrative agent, and certain lenders thereto
whereby the Company will borrow $485 million in term loans in connection with
the Merger and related transactions and have available a $150 million revolving
credit facility and (ii) issue and sell redeemable preferred stock and warrants
to purchase common stock of the Company, for aggregate gross proceeds of $60
million (the "Preferred Stock Investment").
The offering of the Units, the Merger, the Debt Refinancing, the borrowings
under the Credit Agreement on the Closing Date (as defined below) and the
Preferred Stock Investment are collectively referred to as the
"Recapitalization."
The Unit Documents, the Credit Agreement and the Credit Documents (as
defined in the Credit Agreement), the Merger Agreement and the certificate of
designation, warrant agreement, purchase agreement, preferred stock registration
rights agreement and common stock registration rights agreement relating to the
Preferred Stock Investment (the "Preferred Stock Investment Documents") are
collectively referred to herein as the "Recapitalization Documents."
2. Representations and Warranties. The Company and the Guarantor, jointly
and severally, represent and warrant to and agree with each of the Initial
Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating
to any of the Initial Purchasers furnished to the Company and the Guarantor
in writing by the Initial Purchasers expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto, as
the case may be.
(b) The Company has prepared and filed with the Commission in
accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), a proxy statement and form of proxy relating to a special
meeting of the Company's stockholders (the "Stockholders Meeting") at which
the Company's stockholders will be asked to approve the Merger Agreement.
As used in this Agreement, the term "Proxy Statement" means the definitive
proxy statement and form of proxy, including any annexes, financial
statements and schedules, and any amendments or supplements thereto in the
form filed with the Commission pursuant to Rule 14a-6(b) under the Exchange
Act.
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(c) The Proxy Statement complied and will comply, on the date that the
Proxy Statement was mailed to the Company's stockholders and on the date of
the Stockholders Meeting, in all material respects with the provisions of
the Exchange Act, and the Proxy Statement at such times and on the Closing
Date did not and will not, as the case may be, contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(d) After giving effect to the Recapitalization, the Company will have
the authorized, issued and outstanding capitalization set forth in the
Final Memorandum under the heading "Capitalization" and "Description of
Capital Stock"; all of the subsidiaries of the Company are listed in
Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the
"Subsidiaries"); all of the outstanding shares of capital stock of the
Company and the Subsidiaries 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
disclosed in the Final Memorandum, all of the outstanding shares of capital
stock of each of the Subsidiaries are owned 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 the Credit Agreement) or
voting; except as set forth in the Final Memorandum and except for certain
warrants in favor of Investcorp S.A. or its affiliates that will be
exercisable for Class B common stock of the Company to the extent an equal
number of shares of such Class B common stock is being redeemed
contemporaneously, there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other
rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in the Company or any of
the Subsidiaries outstanding. Except for the Subsidiaries or as disclosed
in the Final Memorandum, 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.
(e) Each of the Company and the Subsidiaries 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 its properties and conduct its business as now conducted
and as described in the Final Memorandum; each of the Company and the
Subsidiaries 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 (i) a material adverse effect on the business,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, or (ii) an
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adverse effect on the ability of the Company or any Subsidiary to perform
any of its material obligations under any of the Recapitalization Documents
to which it is or will be a party or to consummate the Recapitalization
(any such event, a "Material Adverse Effect").
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, the Exchange Notes and the
Private Exchange Notes, when issued, will be in the form contemplated by
the Indenture. The 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 Notes, when
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, 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 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 Guarantor has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Guarantee
and the guarantee of the Exchange Notes and Private Exchange Notes. The
Guarantee and the guarantee of the Exchange Notes and the Private Exchange
Notes, when issued, will be in the form contemplated by the Indenture. The
Guarantee and the guarantee of the Exchange Notes and Private Exchange
Notes have been duly and validly authorized by the Guarantor and, when
executed by the Guarantor and delivered in accordance with the provisions
of the Indenture, will constitute valid and legally binding obligations of
the Guarantor, entitled to the benefits of the Indenture and enforceable
against the Guarantor 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.
(h) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its 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 the Guarantor and, when
executed and
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delivered by the Company and the Guarantor (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and legally
binding agreement of the Company and the Guarantor, enforceable against the
Company and the Guarantor 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.
(i) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Company and the Guarantor and, when
executed and delivered by the Company and the Guarantor, will constitute a
valid and legally binding agreement of the Company and the Guarantor
enforceable against the Company and the 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.
(j) 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 by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Warrant Agent), will
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 proceedings
therefor may be brought.
(k) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Warrants and the
Warrant Shares. The Warrants and the Warrant Shares have been duly and
validly authorized for issuance and sale by the Company. The Warrants, when
issued, authenticated and delivered by the Company against payment by the
Initial Purchasers in accordance with the terms of this Agreement and the
Warrant Agreement, 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,
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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 proceedings therefor may be brought. 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 nonassessable 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 has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Warrant Registration
Rights Agreement. The Warrant Registration Rights Agreement has been duly
and validly authorized by the Company and, when duly executed and delivered
by the Company, will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except that (A) the enforceability 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 proceedings 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.
(m) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Credit Agreement. The Credit Agreement has been duly and validly
authorized by the Company and the Guarantor and, when executed and
delivered by the Company and the Guarantor (assuming the due authorization,
execution and delivery by the other parties thereto), will constitute a
valid and legally binding agreement of the Company and the Guarantor,
enforceable against the Company and the Guarantor 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.
(n) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
this Agreement and to consummate the Recapitalization. This Agreement and
the consummation by the Company and the Guarantor of the Recapitalization
have been duly and validly authorized by the Company and the Guarantor.
This Agreement has been duly executed and delivered by the Company and the
Guarantor.
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(o) Assuming the accuracy of the representations and warranties of the
Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof, no consent, approval,
authorization or order of any court or governmental agency or body, or
third party is required for the issuance and sale by the Company and the
Guarantor of the Initial Securities to the Initial Purchasers or the
consummation by the Company and the Guarantor of the Recapitalization,
except such as have been obtained and such as may be required under state
securities or "Blue Sky" laws in connection with the purchase and resale of
the Initial Securities by the Initial Purchasers and except for approval by
the Company's stockholders of the Merger. None of the Company or the
Subsidiaries is (i) in violation of its certificate of incorporation or
bylaws (or similar organizational document), (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) 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,
merger agreement, 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
(collectively, "Contracts"), except for any such breach, default, violation
or event which would not, individually or in the aggregate, have a Material
Adverse Effect.
(p) The execution, delivery and performance by the Company and the
Guarantor of the Recapitalization Documents and the consummation by the
Company and the Guarantor of the transactions contemplated thereby
(including, without limitation, the issuance and sale of the Initial
Securities to the Initial Purchasers and the other components of the
Recapitalization) will not 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 a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such 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 (or similar
organizational document) of the Company or any of the Subsidiaries, or
(iii) (assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and warranties
of the Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of the
Subsidiaries 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.
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(q) The consolidated financial statements of the Company and the
Subsidiaries included in the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of the Company and the Subsidiaries at the dates and for the periods
to which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all material
respects the information shown therein and have been prepared and compiled
on a basis consistent with the consolidated financial statements included
therein, except as otherwise stated therein. Ernst & Young LLP (the
"Independent Accountants") is an independent public accounting firm within
the meaning of the Act and the rules and regulations promulgated
thereunder.
(r) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under 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 Memorandum are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(s) Except as set forth in the Final Memorandum, there is not pending
or, to the knowledge of the Company, threatened any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property or assets of the Company
or any of the Subsidiaries is subject, before or brought by any court,
arbitrator or governmental agency or body which would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Initial Securities to be
sold hereunder or the consummation of any other component of the
Recapitalization.
(t) Each of the Company and the Subsidiaries 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 Memorandum ("Permits"), except where the failure to
obtain such Permits would not, individually or in the aggregate,
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reasonably be expected to have a Material Adverse Effect. Each of the
Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, and none of the Company or the
Subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such Permit, except, in each case, (i) as
described in the Final Memorandum and (ii) where any nonfulfillment or
nonperformance of such revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect.
(u) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the
Company or the Subsidiaries 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 which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the business, financial
condition or results of operations of the Company and its Subsidiaries,
taken as a whole, (ii) none of the Company or the Subsidiaries 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 (a) with respect to any of such Subsidiaries, the
purchase of, or dividend or distribution on, capital stock owned by the
Company and (b) the dividend paid on March 1, 2000) and (iii) there shall
not have been any material change in the capital stock or long-term
indebtedness of the Company and the Subsidiaries taken as a whole.
(v) Each of the Company and the Subsidiaries has 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 is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves, there is no tax deficiency that
has been asserted against the Company or any of the Subsidiaries that would
have, individually or in the aggregate, a Material Adverse Effect.
(w) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries believe to be reliable and accurate.
(x) None of the Company, the Subsidiaries or any agent acting on their
behalf has taken or will take any action that might cause this Agreement or
the sale of the Units to violate Regulation T, U or X of the Board of
Governors of the Federal
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Reserve System, in each case as in effect, or as the same may hereafter be
in effect, on the Closing Date.
(y) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property
described in the Final Memorandum as being owned by it and good and
marketable title to a leasehold estate in the real and personal property
described in the Final Memorandum as being leased by it free and clear of
all liens, charges, encumbrances or restrictions, except as described in
the Final Memorandum 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, reasonably be expected to have a Material
Adverse Effect. All leases, contracts and agreements to which the Company
or any of the Subsidiaries is a party or by which any of them is bound are
valid and enforceable against the Company or such Subsidiary, and are valid
and enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company and the Subsidiaries own or possess adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or proposed
to be operated by them as described in the Final Memorandum, except where
the failure to so own or possess any of the foregoing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and none of the Company or the Subsidiaries has received any
notice of infringement of, or conflict with (or knows of any such
infringement of or conflict with), asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights or
know-how which, if such assertion of infringement or conflict were
sustained, would reasonably be expected to have a Material Adverse Effect.
(z) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective
properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents which
would be required to be described in a prospectus pursuant to the Act that
are not described in the Final Memorandum.
(aa) Except as set forth in the Final Memorandum or except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (A) each of the Company and the Subsidiaries is in
compliance with and not subject to liability under applicable Environmental
Laws (as defined below), (B) each of the Company and the Subsidiaries has
made all filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in
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full force and effect, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or,
to the knowledge of the Company or any of the Subsidiaries, threatened
against the Company or any of the Subsidiaries under any Environmental Law,
(D) no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or any of the Subsidiaries,
(E) none of the Company or the Subsidiaries has received notice that it has
been identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law, (F) no property or facility of the
Company or any of the Subsidiaries is (i) listed or proposed for listing on
the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information
System List promulgated pursuant to CERCLA, or on any comparable list
maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state, local and foreign laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of the environment, including, without limitation, laws relating
to (i) emissions, discharges, releases or threatened releases of hazardous
materials into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii)
underground and aboveground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(bb) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries, threatened.
(cc) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is consistent with industry
practice to protect the Company and its Subsidiaries and their respective
businesses.
(dd) None of the Company or the Subsidiaries has any material
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 of the Subsidiaries makes (or within the preceding six years has made)
a contribution and in which any employee of the Company or of any
Subsidiary
-13-
is or has ever been a participant. With respect to such plans, the Company
and each Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(ee) Except as stated in the Final Memorandum, the Company knows of no
outstanding claims for service in the nature of a finder's fee, financial
advisory fee, origination fee or similar fee, with respect to the
Recapitalization.
(ff) As of the Closing Date, each of the representations and
warranties of the Company and the Subsidiaries set forth in the Credit
Agreement will be true and correct as if made at and as of such date (other
than to the extent any such representation or warranty is expressly made as
to only a certain other date).
(gg) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(hh) None of the Company or the Subsidiaries is now, or after giving
effect to the Recapitalization will be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.
(ii) Each of the Recapitalization Documents conforms or will conform
in all material respects to the description thereof in the Final
Memorandum.
(jj) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration
statements required to be filed by the Company and the Guarantor pursuant
to the Registration Rights Agreement or the Warrant Registration Rights
Agreement other than as expressly permitted thereby.
(kk) Immediately after the consummation of the Recapitalization, the
fair value and present fair saleable value of the assets of each of the
Company and the Guarantor (each on a consolidated basis) will exceed the
sum of its stated liabilities and identified contingent liabilities; none
of the Company or the Guarantor (each on a consolidated basis) is, nor will
any of the Company or the Guarantor (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,
-14-
(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.
(ll) None of the Company, the Subsidiaries or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Act) which is or could be integrated with the sale of the
Initial Securities in a manner that would require the registration under
the Act of any of the Initial Securities or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Initial
Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. Assuming the accuracy of the representations
and warranties of the Initial Purchasers and compliance by the Initial
Purchasers with the covenants set forth in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the Initial
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Initial Securities under the Act or to
qualify the Indenture under the TIA.
(mm) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as any of the Initial
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.
(nn) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of any of the Initial Securities.
(oo) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("Regulation S")) with
respect to the Initial Securities; the Company, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
(pp) As of the Closing Date, the Company will have delivered to the
Initial Purchasers a true and correct copy of each of the Recapitalization
Documents, together with all related agreements and all schedules and
exhibits thereto, and there shall have been no material amendments,
alterations, modifications and waivers as to which the Initial Purchasers
have not been advised in writing; and there exists as of the Closing
-15-
Date (after giving effect to the Recapitalization) no event or condition
which would constitute a default or an event of default (in each case as
defined in each of the Recapitalization Documents) under any of the
Recapitalization Documents which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company or any Subsidiary and
delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. Purchase, Sale and Delivery of the Units. On the basis of the
representations, warranties, agreements and covenants herein contained, the
Company agrees to issue and sell to the Initial Purchasers and, on the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Initial Purchasers,
acting severally and not jointly, agree to purchase the number of Units set
forth opposite such Initial Purchaser's name on Schedule 1 hereto from the
Company at a price of $930.6471 per Unit. One or more certificates in definitive
form for the Initial Securities that the Initial Purchasers have agreed to
purchase hereunder, and in such denomination or denominations and registered in
such name or names as the Initial Purchasers request upon notice to the Company
at least 36 hours prior to the Closing Date, shall be delivered by or on behalf
of the Company to the Initial Purchasers, against payment by or on behalf of the
Initial Purchasers of the purchase price therefor by wire transfer (same day
funds), to such account or accounts as the Company shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Units shall be made at the
offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at
10:00 A.M., New York time, on May 10, 2000, or at such other place, time or date
as the Initial Purchasers, 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 will make such certificate or
certificates for the Initial Securities available for checking and packaging by
the Initial Purchasers at the offices of Deutsche Bank Securities Inc. in New
York, New York, or at such other place as Deutsche Bank Securities Inc. may
designate, at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers propose to
make an offering of the Units at the price, upon the terms and in the manner set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company and the Guarantor. The Company and the
Guarantor, jointly and severally, covenant and agree with each of the Initial
Purchasers that:
-16-
(a) The Company and the Guarantor will not amend or supplement the
Final Memorandum or any amendment or supplement thereto of which the
Initial Purchasers 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 Purchasers shall not have given
their consent. The Company and the Guarantor will promptly, upon the
reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable in
connection with the resale of the Securities by the Initial Purchasers.
(b) The Company and the Guarantor will cooperate with the Initial
Purchasers in arranging for the qualification of the Initial Securities for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to complete
the resale of the Initial Securities; provided, however, that in connection
therewith, neither the Company nor the Guarantor 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 now so
subject.
(c) If, at any time prior to the completion of the distribution by the
Initial Purchasers of the Initial Securities or the Private Exchange Notes,
any event occurs or information becomes known as a result of which the
Final Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if for any other reason it is necessary
at any time to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly notify the Initial Purchasers
thereof and will prepare, at the expense of the Company, an amendment or
supplement to the Final Memorandum that corrects such statement or omission
or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the Units
as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Initial Securities or the Exchange Notes
remain outstanding, the Company will furnish to the Initial Purchasers
copies of all reports and other communications (financial or otherwise)
furnished by the Company
-17-
to the Trustee or the Warrant Agent or to the holders of any of the Initial
Securities or the Exchange Notes and, as soon as available and upon the
reasonable request in writing by any Initial Purchaser, copies of any
reports or financial statements furnished to or filed by the Company with
the Commission or any national securities exchange on which any class of
securities of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course by
the Company, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
(h) None of the Company or any of its Affiliates (as defined in the
Act) 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 will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) in connection with the
offering of the Securities 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 and are
"restricted securities" within the meaning of Rule 144 under the Act, the
Company will make available at its expense, upon request, to any holder of
such Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its reasonable best efforts to (i) permit the
Units (and following separation of the Units, the Notes and the Warrants)
to be designated as PORTAL-eligible securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the NASD's
Portal Market (the "Portal Market") and (ii) permit the Units (and
following separation of the Units, the Notes and the Warrants) to be
eligible for clearance and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S) the Company and the Guarantor will
not register any transfer of such Securities not made in accordance with
the provisions of
-18-
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of
definitive securities.
6. Expenses. Each of the Company and the Guarantor, jointly and severally,
agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11 or
12 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 Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers 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 or the Guarantor, (iv) preparation (including printing),
issuance and delivery to the Initial Purchasers 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
Purchasers relating thereto, (vi) expenses in connection with the "roadshow" and
any other meetings with prospective investors in the Units, (vii) fees and
expenses of the Trustee including fees and expenses of counsel, (viii) all
expenses and listing fees incurred in connection with the application for
quotation of the Initial Securities on the Portal Market and (ix) any fees
charged by investment rating agencies for the rating of the Notes; provided,
however, that except as expressly provided in this Section 6, the Initial
Purchasers shall pay their own costs and expenses, including the costs and
expenses of their counsel. If the sale of the Units provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Company or the Guarantor to perform all obligations and satisfy all conditions
on their part to be performed or satisfied hereunder (other than solely by
reason of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance herewith), the
Company and the Guarantor, jointly and severally, agree to promptly reimburse
the Initial Purchasers upon demand for all out-of-pocket expenses (including
reasonable fees, disbursements and charges of Xxxxxx Xxxxxx & Xxxxxxx, counsel
for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Units.
7. Conditions of the Initial Purchasers' Obligations. The obligation of the
Initial Purchasers to purchase and pay for the Units shall, in their 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 Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxxx X. Xxxxxx, Vice President, General Counsel and
Corporate Secretary of the
-19-
Company, in form and substance reasonably satisfactory to counsel for the
Initial Purchasers, substantially to the effect that:
(i) Each of the Company and the Guarantor is duly qualified to do
business as a foreign corporation in good standing in all
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, reasonably be expected to have a Material Adverse Effect.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum under the heading
"Capitalization" and "Description of Capital Stock"; all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and to
the knowledge of such counsel were not issued in violation of any
preemptive or similar rights; all of the outstanding shares of capital
stock of the Subsidiaries are owned, directly or indirectly, by the
Company, free and clear of all perfected security interests and, to
the knowledge of such counsel, free and clear of all other liens,
encumbrances, equities and claims or restrictions on transferability
(other than those imposed by the Act, the securities or "Blue Sky"
laws of certain jurisdictions and the Credit Agreement) or voting;
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
nonassessable and to the knowledge of such counsel will not be subject
to any preemptive or similar rights.
(iii) Except as set forth in the Final Memorandum and except for
certain warrants in favor of Investcorp S.A. or its affiliates that
will be exercisable for Class B common stock of the Company to the
extent an equal number of shares of such Class B common stock is being
redeemed contemporaneously, to the knowledge of such counsel (A) no
options, warrants or other rights to purchase from the Company or any
Subsidiary shares of capital stock or ownership interests in the
Company or any Subsidiary are outstanding, (B) no agreements or other
obligations to issue, or other rights to convert, any obligation into,
or exchange any securities for, shares of capital stock or ownership
interests in the Company or any Subsidiary are outstanding and (C) no
holder of securities of the Company or any Subsidiary is entitled to
have such securities registered under a registration statement filed
by the Company pursuant to the Registration Rights Agreement or the
Warrant Registration Rights Agreement.
-20-
(iv) Except as set forth in the Final Memorandum, no legal or
governmental proceedings are pending or, to the knowledge of such
counsel, threatened to which any of the Company or the Subsidiaries is
a party or to which the property or assets of the Company or any
Subsidiary are subject which would reasonably be expected to 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 Units to be sold
hereunder or the consummation of the other transactions described in
the Final Memorandum under the caption "Use of Proceeds."
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach 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
the terms or provisions of any Contract known to such counsel
(including in any event any of the foregoing which have been filed by
the Company with the Commission), except for any such breach,
violation, default or event which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(vi) Each of the Recapitalization Documents has been duly and
validly executed and delivered by the Company and the Guarantor to the
extent a party thereto.
(vii) The Company and the Guarantor have obtained all Permits
necessary to conduct the businesses now or proposed to be conducted by
them as described in the Final Memorandum, the lack of which would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; each of the Company and the Guarantor has
fulfilled and performed all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder
of any such Permit.
(viii) To the knowledge of such counsel, the Company and the
Guarantor own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and
know-how necessary to conduct the businesses now or proposed to be
operated by them as described in the Final Memorandum, and neither the
Company nor the Guarantor has received any notice of infringement of
or conflict with asserted rights of others
-21-
with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how which, if such assertion of infringement or
conflict were sustained, would reasonably be expected to have a
Material Adverse Effect.
(ix) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting the Company or the
Subsidiaries or any of their respective properties or assets which
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, nor are there any
material contracts or other documents which would be required to be
described in a prospectus pursuant to the Act that are not described
in the Final Memorandum.
At the time the foregoing opinion is delivered, Xxxxxxx X. Xxxxxx
shall additionally state that he has participated in conferences with
officers and other representatives of the Company and the Guarantor,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum and
related matters were discussed, and, although he 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
Memorandum, no facts have come to his attention which lead him to believe
that the Final Memorandum, 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 he need express no
opinion with respect to the financial statements and related notes thereto
and the other financial, statistical and accounting data included in the
Final Memorandum). The opinion of Xxxxxxx X. Xxxxxx described in this
Section shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxx Xxxx & Xxxxxxxx LLP, counsel for the Company and the
Guarantor, in form and substance reasonably satisfactory to counsel for the
Initial Purchasers, substantially to the effect that:
(i) The Indenture meets the requirements for qualification under
the TIA. The Indenture (assuming the due authorization, execution and
-22-
delivery thereof by the parties thereto) constitutes the valid and
legally binding agreement of the Company and the Guarantor,
enforceable against the Company and the Guarantor in accordance with
its terms.
(ii) The Warrant Agreement (assuming the due authorization,
execution and delivery thereof by the parties thereto) constitutes the
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(iii) The Notes and the Guarantee are each in the form
contemplated by the Indenture. The Notes and the Guarantee, when paid
for by the Initial Purchasers in accordance with the terms of this
Agreement (assuming the due authorization, execution and delivery of
the Indenture, the Notes and the Guarantee by the parties thereto and
due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the valid and legally
binding obligations of the Company and the Guarantor, entitled to the
benefits of the Indenture, and enforceable against the Company and the
Guarantor in accordance with their terms.
(iv) The Warrants are in the form contemplated by the Warrant
Agreement. The Warrants, when paid for by the Initial Purchasers in
accordance with the terms of this Agreement and the Warrant Agreement
(assuming the due authorization, execution and delivery of the Warrant
Agreement by the parties thereto) 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.
(v) The Exchange Notes and the Private Exchange Notes and the
guarantee thereof, when duly executed and delivered by the Company and
the Guarantor, as applicable, in accordance with the terms of the
Registration Rights Agreement and the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the parties
thereto and due authentication and delivery of the Exchange Notes and
the Private Exchange Notes by the parties thereto in accordance with
the Indenture), will constitute the valid and legally binding
obligations of the Company and the Guarantor, entitled to the benefits
of the Indenture, and enforceable against the Company and the
Guarantor in accordance with their terms.
(vi) The Registration Rights Agreement (assuming due
authorization, execution and delivery thereof by the parties thereto)
constitutes the valid and legally binding agreement of the Company and
the Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms.
-23-
(vii) The Warrant Registration Rights Agreement (assuming due
authorization, execution and delivery thereof by the parties thereto)
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(viii) The Indenture, the Warrant Agreement, the Notes, the
Guarantee, the Warrants, the Registration Rights Agreement, the
Warrant Registration Rights Agreement, the Preferred Stock Investment
Documents, the Merger Agreement and the Credit Agreement conform in
all material respects to the descriptions thereof contained in the
Final Memorandum.
(ix) Except as set forth in the Final Memorandum, to the
knowledge of such counsel, no legal or governmental proceedings are
pending or threatened to which any of the Company or the Subsidiaries
is a party or to which the property or assets of the Company or any
Subsidiary is subject which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Initial Securities to be sold hereunder or the consummation of the
other transactions described in the Final Memorandum under the caption
"Use of Proceeds."
(x) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Initial Securities to the Initial Purchasers
and the other components of the Recapitalization) will not constitute
or result in a breach 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
Recapitalization Document, except for any such breach, violation,
default or event which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or (ii)
(assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers and compliance by the Initial
Purchasers with the covenants set forth 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 Subsidiaries 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.
(xi) No consent, approval, authorization or order of any
governmental authority of the United States or the State of New York
is required for the issuance and sale by the Company and the Guarantor
of the Initial Securities to the Initial Purchasers or the
consummation by the
-24-
Company and the Guarantor of the Recapitalization, except such as may
be required under Blue Sky laws, as to which such counsel need express
no opinion, or the Act or the TIA (which are addressed in subparagraph
(xiii) below) and those which have previously been obtained.
(xii) Neither the Company nor the Guarantor is, or immediately
after the sale of the Initial Securities to be sold hereunder and the
application of the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") will be, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(xiii) Assuming the accuracy of the representations and
warranties by the Initial Purchasers under, and compliance by the
Initial Purchasers with the provisions in, this Agreement, no
registration under the Act of the Securities is required in connection
with the sale of the Initial Securities to the Initial Purchasers as
contemplated by this Agreement and the Final Memorandum or in
connection with the initial resale of the Initial Securities by the
Initial Purchasers in accordance with Section 8 of this Agreement, and
prior to the effectiveness of the Exchange Registration Statement (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) (A) that the purchasers who buy
such Initial Securities in the initial resale thereof are qualified
institutional buyers as defined in Rule 144A promulgated under the Act
("QIBs") or (B) that the offer or sale of the Initial Securities is
made in an offshore transaction as defined in Regulation S, (ii) the
accuracy of the Initial Purchasers' representations in Section 8 and
those of the Company and the Guarantor contained in this Agreement
regarding the absence of a general solicitation in connection with the
sale of such Initial Securities to the Initial Purchasers and the
initial resale thereof and (iii) the due performance by the Initial
Purchasers of the agreements set forth in Section 8 hereof.
(xiv) Neither the consummation of the transactions contemplated
by this Agreement nor the sale, issuance, execution or delivery of the
Units will violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System.
(xv) The statements set forth under the caption "Description of
Capital Stock" and "Certain United States Federal Tax Consequences" in
the Final Memorandum, insofar as such statements are summaries of
matters of law or legal conclusions, are accurate summaries in all
material respects and
-25-
insofar as such statements purport to summarize provisions of legal
documents or of statutes, laws, rules or regulations, fairly summarize
such provisions.
The foregoing opinions as to enforceability and the legal, valid and
binding nature of obligations may be subject to (i) the effect of any
bankruptcy, insolvency, reorganization, moratorium, arrangement or similar
laws affecting the rights and remedies of creditors generally (including,
without limitation, the effect of statutory or other laws regarding
fraudulent transfers or preferential transfers) and (ii) general principles
of equity, including without limitation concepts or materiality,
reasonableness, good faith and fair dealing and the possible unavailability
of specific performance, injunctive relief or other equitable remedies
regardless of whether enforceability is considered in a proceeding in
equity or at law. The opinion of Xxxxxx Xxxx & Xxxxxxxx LLP may be subject
to other customary exceptions, assumptions and qualifications reasonably
acceptable to the Initial Purchasers and substantially to the effect as
previously delivered to the Initial Purchasers in draft form.
At the time the foregoing opinion is delivered, Xxxxxx Xxxx & Xxxxxxxx
LLP shall additionally state that it has participated in conferences with
officers and other representatives of the Company and the Guarantor,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum 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
Memorandum (except to the extent specified in subsections 7(b)(viii) and
7(b)(xv), no facts have come to its attention which lead it to believe that
the Final Memorandum, 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, statistical and accounting data included in the Final
Memorandum).
The opinion of Xxxxxx Xxxx & Xxxxxxxx LLP described in this Section
shall be rendered to the Initial Purchasers at the request of the Company
and shall so state therein. In addition, such opinion shall also state that
the Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
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References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Faegre & Xxxxxx LLP, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Initial Purchasers,
substantially to the effect that:
(i) The Company is duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota and has all
requisite corporate power and authority to own its properties and to
conduct its business as described in the Final Memorandum.
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive
or similar rights expressly created by law or the articles of
incorporation or bylaws (or similar organizational documents) of the
Company. 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
nonassessable and will not be subject to any preemptive or similar
rights expressly created by law or the articles of incorporation or
bylaws (or similar organizational documents) of the Company. The
Warrant Shares have been duly reserved for issuance in accordance with
the terms of the Warrants and the Warrant Agreement.
(iii) The Company has all requisite corporate power and authority
to execute, deliver and perform each of its obligations under the
Recapitalization Documents and to consummate the Recapitalization;
each of the Recapitalization Documents has been duly and validly
authorized by the Company.
(iv) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company.
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach 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 certificate of incorporation or bylaws (or similar
-27-
organizational document) of the Company, or (ii) (assuming compliance
with all applicable state securities or "Blue Sky" laws and assuming
the accuracy of the representations and warranties of the Initial
Purchasers and compliance by the Initial Purchasers with the covenants
set forth in Section 8 hereof) any Minnesota statute, judgment,
decree, order, rule or regulation known to such counsel to be
applicable to the Company or the Guarantor 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.
(vi) No consent, approval, authorization or order of any
Minnesota governmental authority is required for the issuance and sale
by the Company and the Guarantor of the Initial Securities to the
Initial Purchasers or the consummation by the Company and the
Guarantor of the Recapitalization, except such as may be required
under Blue Sky laws, as to which such counsel need express no opinion,
and those which have previously been obtained.
(vii) The Certificate of Xxxxxx has been duly filed with the
Secretary of State of the State of Minnesota and the Merger has become
effective in accordance with Minnesota law.
For the purposes of this opinion, the term "Recapitalization
Documents" shall not include the Credit Agreement, the Credit Documents or
the Preferred Stock Investment Documents. Such excluded documents shall be
covered by the opinions referenced in the last sentence of this paragraph.
The opinion of Xxxxxx & Xxxxxx LLP described in this Section shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein. In addition, such opinion shall also state that the
Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
References to the Final Memorandum in this subsection (c) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(d) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Husch & Eppenberger, LLC, counsel for the Guarantor in form
and substance reasonably satisfactory to counsel for the Initial
Purchasers, substantially to the effect that:
(i) The Guarantor is duly incorporated, validly existing and in
good standing under the laws of the State of Kansas and has all
requisite corporate power and authority to own its properties and to
conduct its business as described in the Final Memorandum.
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(ii) All of the outstanding shares of capital stock of the
Guarantor have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive
or similar rights expressly created by law or the certificate of
incorporation or bylaws (or similar organizational document) of the
Guarantor; all of the outstanding shares of capital stock of the
Guarantor are owned, directly or indirectly, by the Company, free and
clear of all perfected security interests and, to the knowledge of
such counsel, free and clear of all other 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) or voting.
(iii) The Guarantor has all requisite corporate power and
authority to execute, deliver and perform each of its obligations
under the Recapitalization Documents to which it is a party and to
consummate the Recapitalization; each of the Recapitalization
Documents to which the Guarantor is a party has been duly and validly
authorized by the Guarantor.
(iv) The guarantee of the Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by the Guarantor.
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach 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 certificate of incorporation or bylaws (or similar
organizational document) of the Guarantor, or (ii) (assuming
compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the
Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof) any Kansas statute, judgment,
decree, order, rule or regulation known to such counsel to be
applicable to the Company or the Guarantor 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.
(vi) No consent, approval, authorization or order of any Kansas
governmental authority is required for the issuance and sale by the
Company and the Guarantor of the Initial Securities to the Initial
Purchasers or the consummation by the Company and the Guarantor of the
Recapitalization,
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except such as may be required under Blue Sky laws, as to which such
counsel need express no opinion, and those which have previously been
obtained.
For the purposes of this opinion, the term "Recapitalization
Documents" shall not include the Credit Agreement, the Credit Documents or
the Preferred Stock Investment Documents. Such excluded documents shall be
covered by the opinions referenced in the last sentence of this paragraph.
The opinion of Husch & Eppenberger, LLC described in this Section shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein. In addition, such opinion shall also state that the
Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
References to the Final Memorandum in this subsection (d) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(e) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers,
dated as of the Closing Date and addressed to the Initial Purchasers, of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, with respect
to certain legal matters relating to this Agreement and such other related
matters as the Initial Purchasers may reasonably require. In rendering such
opinion, Xxxxxx Xxxxxx & Xxxxxxx shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
(f) The Initial Purchasers shall have received from the Independent
Accountants comfort letters dated the date hereof and the Closing Date, in
form and substance reasonably satisfactory to counsel for the Initial
Purchasers.
(g) The representations and warranties of the Company and the
Guarantor contained in this Agreement shall be true and correct 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 Guarantor's
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
Guarantor shall have performed all covenants and agreements in all material
respects and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no
event or development, and no information
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shall have become known, that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect.
(h) Neither the sale of the Units hereunder nor any other component of
the Recapitalization shall be enjoined (temporarily or permanently) on the
Closing Date.
(i) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or any of the Subsidiaries
shall have sustained any loss or interference with respect to its business
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or from any legal or governmental proceeding,
order or decree, which loss or interference, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(j) The Initial Purchasers shall have received a certificate of the
Company and the Guarantor, dated the Closing Date, signed on behalf of the
Company and the Guarantor by its respective Chairman of the Board,
President or any Senior Vice President and the Chief Financial Officer, to
the effect that:
(i) The representations and warranties of the Company and the
Guarantor contained in this Agreement are true and correct on and as
of the date hereof and on and as of the Closing Date, and each of the
Company and the Guarantor has performed all covenants and agreements
in all material respects and satisfied all conditions on its 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 Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or development has occurred, and no information has
become known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect;
(iii) Neither the sale of the Units hereunder nor any other
component of the Recapitalization has been enjoined (temporarily or
permanently);
(iv) There have been no material amendments, alterations,
modifications, or waivers of any provisions of any of the
Recapitalization Documents since the date of the execution and
delivery thereof by the parties thereto (other than amendments,
alterations, modifications or waivers copies of which have previously
been distributed to the Initial Purchasers prior to the date of this
Agreement); and
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(v) The Company and the Subsidiaries, to the extent each is a
party thereto, have complied in all material respects with all
agreements and covenants in the Recapitalization Documents and
performed in all material respects all conditions specified therein to
be complied with or performed by them at or prior the Closing Date.
(k) On the Closing Date, the Company and the Subsidiaries shall have,
to the extent each is a party thereto, complied in all material respects
with all agreements and covenants in the Recapitalization Documents and
performed all conditions specified therein (other than agreements or
covenants which have been waived but only if copies of such waivers have
previously been distributed to the Initial Purchasers prior to the date of
this Agreement) to be complied with or performed at or prior to the Closing
Date, and each of the Recapitalization Documents shall be in full force and
effect.
(l) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and the Guarantor
and such agreement shall be in full force and effect at all times from and
after the Closing Date.
(m) On the Closing Date, the Initial Purchasers shall have received
the Warrant Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times from and after the
Closing Date.
(n) All of the Recapitalization (other than the offering of the Units)
shall have been consummated, or shall be consummated simultaneously with
the offering of the Units, on the terms and conditions set forth in the
Recapitalization Documents in the forms previously delivered to the Initial
Purchasers and to which they shall not have reasonably objected.
(o) On the Closing Date, the Certificate of Merger with respect to the
Merger shall be in form and substance satisfactory to the Initial
Purchasers and shall have been filed with the Secretary of State of the
State of Minnesota.
On or before the Closing Date, the Initial Purchasers and counsel for the
Initial Purchasers 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 Subsidiaries as
they shall have heretofore reasonably requested from the Company.
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 Purchasers and counsel for the Initial Purchasers. The Company and the
Guarantor shall furnish to the Initial Purchasers
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such conformed copies of such documents, opinions, certificates, letters,
schedules and instruments in such quantities as the Initial Purchasers shall
reasonably request.
8. Offering of Units; Restrictions on Transfer. (a) Each of the Initial
Purchasers agrees with the Company and the Guarantor (as to itself only) that
(i) it has not and will not solicit offers for, or offer or sell, the Initial
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 (ii) it has
and will solicit offers for the Initial Securities only from, and will offer the
Initial Securities only to (A) in the case of offers inside the United States,
persons whom the Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchasers that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("non-U.S. purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for non-U.S. beneficial owners (other
than an estate or trust)); provided, however, that, in the case of this clause
(B), in purchasing such Initial Securities such persons are deemed to have
represented and agreed as provided under the caption "Transfer Restrictions"
contained in the Final Memorandum (or, if the Final Memorandum is not in
existence, in the most recent Memorandum). Each of the Initial Purchasers
represents and warrants (as to itself only) that such Initial Purchaser is a
QIB.
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States
that (i) it has and will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers Initial
Securities or has in its possession or distributes any Memorandum or any
such other material, in all cases at its own expense; (ii) the Initial
Securities have not been and will not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from
the registration requirements of the Act; and (iii) it has offered the
Initial Securities and will offer and sell the Initial Securities (A) as
part of its distribution at any time and (B) otherwise during the relevant
distribution compliance period, only in accordance with Rule 903 of
Regulation S and, accordingly, neither it nor any persons acting on its
behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Initial Securities, and
any such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
Terms used in this Section 8 and not defined in this Agreement have the
meanings given to them in Regulation S.
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9. Indemnification and Contribution. (a) Each of the Company and the
Guarantor, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any 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 made by the
Company or the Guarantor in Section 2 hereof;
(ii) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto; or
(iii) the omission or alleged omission to state, in any Memorandum 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 Purchasers and each such
controlling person for any reasonable legal or other expenses incurred by the
Initial Purchasers 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; provided, however, the Company
and the Guarantor 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 Memorandum or any amendment or supplement thereto in reliance upon and in
conformity with written information concerning the Initial Purchasers furnished
to the Company and the Guarantor by the Initial Purchasers through Deutsche Bank
Securities Inc. specifically for use therein. The indemnity provided for in this
Section 9 will be in addition to any liability that the Company and the
Guarantor may otherwise have to the indemnified parties. The Company and the
Guarantor shall not be liable under this Section 9 for any settlement of any
claim or action effected without its prior written consent, which shall not be
unreasonably withheld; provided further, however, that the Company and the
Guarantor will not be liable to any Initial Purchaser or any person controlling
such Initial Purchaser with respect to any such untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Memorandum that is corrected in the Final Memorandum (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Initial Securities from such Initial Purchaser but was not
sent or given a copy of the Final Memorandum (as amended or supplemented) in any
case where such delivery of the Final Memorandum (as amended or supplemented)
was required by the Act, unless such failure to deliver the Final Memorandum (as
amended or supplemented) was a result of noncompliance by the Company or the
Guarantor with Section 5 hereof.
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(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless each of the Company and the Guarantor, its
directors, its officers and each person, if any, who controls the Company
or the Guarantor 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 Guarantor 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
Memorandum 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 Memorandum or any amendment or supplement thereto, or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Initial Purchaser, furnished to
the Company and the Guarantor by the Initial Purchasers through Deutsche
Bank Securities Inc. 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
Guarantor or any such director, officer or controlling person in connection
with 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. The indemnity provided for in this Section 9
will be in addition to any liability that the Initial Purchasers may
otherwise have to the indemnified parties. The Initial Purchasers 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.
The Company and the Guarantor shall not, without the prior written consent
of the Initial Purchasers, effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Initial Purchaser
is or could have been a party, or indemnity could have been sought
hereunder by any Initial Purchaser, unless such settlement (A) includes an
unconditional written release of the Initial Purchasers, in form and
substance reasonably satisfactory to the Initial Purchasers, 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 any 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 of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such
action is brought against any indemnified
-35-
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 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
Purchasers in the case of paragraph (a) of this Section 9 or by the Company
and the Guarantor 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. All
reasonable fees and expenses reimbursed pursuant to this paragraph (c)
shall be reimbursed as they are incurred. 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
-36-
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 Initial 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 Guarantor on the one hand and any
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 bear to the total discounts and commissions
received by such 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 and the Guarantor on the one hand, or such 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. The Company, the Guarantor and the Initial Purchasers
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 this paragraph (d). Notwithstanding
any other provision of this paragraph (d), no Initial Purchaser shall be
obligated to make contributions hereunder that in the aggregate exceed the
total discounts, commissions and other compensation received by such
Initial Purchaser under this Agreement, less the aggregate amount of any
damages that such Initial Purchaser has otherwise been required to pay by
reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls an Initial Purchaser 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 Initial Purchasers, and each director of
the Company or the Guarantor, each officer of the Company or the Guarantor
and each person, if any, who controls the Company or the Guarantor 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 or such
Guarantor, as applicable.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, the
Guarantor, their respective officers and the Initial Purchasers set forth in
this Agreement or made by or on
-37-
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, the
Guarantor, any of their respective officers or directors, the Initial Purchasers
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 16 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Default by an Initial Purchaser. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Units agreed to be purchased by
such Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement, the
remaining Initial Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the number of Units set forth opposite
their names in Schedule 1 hereto bears to the total number of Units set forth
opposite the names of all the remaining Initial Purchasers) the Units which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the number of Units which
the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase shall exceed 10% of the total number of Units set forth in Schedule 1
hereto, the remaining Initial Purchasers shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Units, and if such
nondefaulting Initial Purchasers do not purchase all the Units, this Agreement
will terminate without liability to any nondefaulting Initial Purchaser or the
Company except as provided in Section 10 hereof. In the event of a default by
any Initial Purchaser as set forth in this Section 11, the Closing Date shall be
postponed for such period, not exceeding five business days, as the
nondefaulting Initial Purchasers shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
12. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company or the Guarantor shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its 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 Subsidiaries 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 reasonable judgment of the Initial Purchasers,
has had or has a Material Adverse Effect, or there shall have been, in
the reasonable
-38-
judgment of the Initial Purchasers, any event or development that,
individually or in the aggregate, has or could be reasonably likely to
have a Material Adverse Effect (including without limitation a change
in control of the Company or the Subsidiaries), except in each case as
described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the Nasdaq National Market shall have been suspended or materially
limited 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;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any debt of the Company or the Guarantor 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 Section 11 or this
Section 12 shall be without liability of any party to any other party
except as provided in Section 10 hereof.
13. Information Supplied by the Initial Purchasers. The statements set
forth (i) in the last paragraph on the front cover page and (ii) in the third
paragraph, the third and fourth sentences of the fifth paragraph, the seventh
paragraph and, with respect to affiliations of the Initial Purchasers only, the
eighth paragraph, in each case, under the heading "Private Placement" in the
Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Company and the Guarantor for the purposes of Sections 2(a) and 9 hereof.
14. Notices. All communications hereunder shall be in writing and, if sent
to the Initial Purchasers, shall be mailed or delivered to (i) Deutsche Bank
Securities Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
-39-
Xxxxxxx Xxxxxxxx, Esq.; if sent to the Company or the Guarantor, shall be mailed
or delivered to the Company at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: General Counsel; with a copy to Xxxxxx Xxxx & Xxxxxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx, Esq.
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; and one business day
after being timely delivered to a next-day air courier.
15. Successors. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company, the Guarantor 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 Guarantor contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and the Guarantor, their officers and any person or persons who
control the Company or the Guarantor within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Securities from the Initial
Purchasers will be deemed a successor because of such purchase.
16. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF ANY
OTHER LAW.
17. 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.
S-1
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
Guarantor and the Initial Purchasers.
Very truly yours,
JOSTENS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman, President & CEO
AMERICAN YEARBOOK COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
S-2
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
UBS WARBURG LLC
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
Leveraged Finance
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Managing Director
Leveraged Finance
XXXXXXX, XXXXX & CO.
/s/ [Signature Illegible]
----------------------------------
SCHEDULE 1
----------
Initial Purchaser Number of Units
----------------- ---------------
Deutsche Bank Securities Inc. ............................... 105,750
UBS Warburg LLC.............................................. 79,875
Xxxxxxx, Xxxxx & Co. ........................................ 39,375
-------
Total.............................................. 225,000
SCHEDULE 2
----------
Subsidiaries of the Company
---------------------------
Jurisdiction of
Name Incorporation
---- -------------
American Yearbook Company, Inc. Kansas
Jostens Canada, Ltd. Canada
Balfirm Canada, Inc. Canada
Jostens Can Investments B.V. The Netherlands
Jostens International Holding B.V. The Netherlands
C.V. Jostens Global Trading The Netherlands
JC Trading, Inc. Puerto Rico
Conceptos Jostens, S.A. de C.V. Mexico
Reconocimientos E Incentivos, S.A. de C.V. Mexico
JostFer S.A. de C.V. Mexico
Reconocimientos, S.A. Colombia
