COLEMAN CABLE, INC. (a Delaware corporation)
EXHIBIT-1.1
$120,000,000
XXXXXXX CABLE, INC.
(a Delaware corporation)
(a Delaware corporation)
9 7/8% Senior Notes due 2012
March 27, 2007
March 27, 2007
Wachovia
Capital Markets, LLC
c/o Wachovia Capital Markets, LLC
c/o Wachovia Capital Markets, LLC
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxx Cable, Inc.,
a Delaware corporation (the “Company”), proposes to issue and
sell to Wachovia Capital Markets, LLC (the “Initial Purchaser”), $120,000,000 aggregate
principal amount of its 9 7/8% Senior Notes due 2012 (the
“Notes”), which will be
unconditionally guaranteed as to principal, premium, if any, and interest (the
“Guarantees”) by the subsidiaries of the Company named in Schedule I hereto (each
individually, a “Guarantor” and collectively, the “Guarantors”).
The Notes will be issued
in connection with the Company’s acquisition of all of the equity interests of
Xxxxxxxxxxx, LLC (“Xxxxxxxxxxx”) it being understood that Xxxxxxxxxxx will be a Guarantor
as of the Closing Date and references herein to Guarantors or a Guarantor and references
herein to a subsidiary or to subsidiaries of the Company will be deemed to include
Xxxxxxxxxxx. The Notes will be issued pursuant to an Indenture (the “Indenture”) dated
September 28, 2004, among the Company, the Guarantors and Deutsche Bank National Trust
Company, as Trustee (the “Trustee”). This Agreement, the Registration Rights Agreement, to
be dated the Closing Date, between the Initial Purchaser and the Company (the
“Registration Rights Agreement”), and the Indenture are hereinafter collectively referred
to as the “Transaction Documents” and the execution and delivery of the Transaction
Documents and the transactions contemplated herein and therein are hereinafter referred to
as the “Transactions”.
The Notes
(and the related Guarantees) will be offered and sold through the Initial
Purchaser without being registered under the Securities Act of 1933, as amended (the
“Securities Act”), to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in offshore transactions
in reliance on Regulation S under the Securities Act (“Regulation S”). The Initial
Purchaser has advised the Company that they will offer and sell the Notes purchased by
them hereunder in accordance with Section 3 hereof as soon as the Initial Purchaser deems
advisable.
In connection with the sale of the Notes, the Company has prepared a preliminary
offering memorandum, dated March 21, 2007 (the “Preliminary Memorandum”), the Offering
Memorandum (as defined below) and a Final Offering Memorandum (as defined below), dated
the date hereof (the “Final Memorandum”, the Preliminary Memorandum, and the Offering
Memorandum are referred to herein as a “Memorandum”). Each Memorandum sets forth certain
information concerning the Company, the Notes, the Transaction Documents and the
Transactions. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto,
in connection with the offer and sale of the Notes by the Initial Purchaser.
Prior to
the time when the sales of the Notes were first made (the
“Time of Sale”,
which shall be deemed to be 5:00 p.m. (New York time) on March 27, 2007), the Company has
prepared and delivered to the Initial Purchasers a pricing supplement (the “Pricing
Supplement”) dated March 27, 2007. The Pricing Supplement together with the Preliminary
Memorandum is referred to herein as the “Offering Memorandum.”
Promptly after the Time of Sale and in any event no later than the second Business
Day following the Time of Sale, the Company will prepare and deliver to the Initial
Purchaser a Final Offering Memorandum (the “Final Memorandum”), which will consist of the
Preliminary Offering Memorandum with such changes therein as are required to reflect the
information contained in the Pricing Supplement, and from and after the time such Final
Memorandum is delivered to the Initial Purchaser, all references herein to the Offering
Memorandum shall be deemed to be a reference to both the Offering Memorandum and the Final
Memorandum.
The representations and warranties made herein by the Company with respect to
Copper-field are made to the knowledge of the Company and as of the Closing Date.
Xxxxxxxxxxx will become a party to this agreement as a Guarantor effective on the
Closing Date by executing a Joinder Agreement, the form of which is attached hereto as
Exhibit A (the “Joinder Agreement”).
1. Representations and Warranties of the Company and the Guarantors.
The Company and the Guarantors jointly and severally represent and warrant to, and agree
with, the Initial Purchaser that:
(a) The Preliminary Memorandum as of its date does not contain; the Offering
Memorandum at the Time of Sale and at the Closing Date; and the Final
Memorandum as
of its date and the Closing Date, and any amendment or supplement thereto does
not and
will not contain any untrue statement of a material fact or omit to state any
material fact
necessary to make the statements therein, in light of the circumstances under
which they
were made, not misleading; provided, however, that the
representations or warranties set
forth in this paragraph shall not apply to statements in or omissions from any
Memorandum made in reliance upon and in conformity with information furnished in
writing to the
Company by the Initial Purchaser expressly for use therein, as specified in
Section 10.
The statistical and industry data included in each Memorandum are based on or
derived
from sources that the Company believes to be reliable and accurate.
(b) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware. The Company
is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except where the failure to so qualify or be
in good
standing would not have a Material Adverse Effect. “Material Adverse Effect”
shall
mean a material existing or prospective adverse change in or effect on (i) the
business,
operations, properties, assets, liabilities, shareholders’ equity, earnings,
financial condition, results of operations or management of the Company and its subsidiaries,
considered
as one enterprise, whether or not in the ordinary course of business, or (ii)
the ability of
-2-
the Company and each Guarantor to perform its obligations under the Notes or the
Transaction Documents.
(c) The Company and each Guarantor has the requisite corporate power and
authority to own or lease its properties and conduct its business as described in
each
Memorandum; and the Company and Xxxxxxxxxxx have the requisite corporate power and
authority to enter into the Transaction Documents and to carry out all the terms and
provisions hereof and thereof to be carried out by them.
(d) The authorized, issued and outstanding capital stock of the Company is as
set forth in the Offering Memorandum. All of the issued shares of capital stock of
the
Company have been duly authorized and validly issued and are fully paid and
nonassessable; and none of the outstanding shares of capital stock of the Company was issued
in
violation of the preemptive or other similar rights of any security holder of the
Company.
(e) Each Guarantor has been duly organized, is validly existing and is in good
standing under the laws of the jurisdiction of its organization and is duly
qualified to
transact business and is in good standing in each jurisdiction in which the conduct
of its
business or its ownership or leasing of property requires such qualification, except
to the
extent that the failure to be so qualified or be in good standing would not have a
Material
Adverse Effect; all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable,
and are owned directly or through wholly-owned subsidiaries by the Company, free and
clear of all liens, encumbrances, equities or claims, although such shares are
pledged under the Revolving Credit Facility (as defined below).
(f) Except to the extent prohibited under the existing revolving credit facility
to be terminated in connection with the offering and the amended and restated senior
secured revolving credit facility (the “Revolving Credit Facility”) described in the
Offering
Memorandum, and except to the extent prohibited by the 9 7/8% Senior Notes due 2012
issued under an indenture with Deutsche Bank National Trust Company to be redeemed
in connection with the offering, no subsidiary of the Company is prohibited,
directly or
indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company,
except
as provided by applicable laws or regulations, by the Indenture or as disclosed in
the Offering Memorandum.
(g) Except as otherwise disclosed in the Offering Memorandum, there are no
outstanding (i) securities or obligations of the Company convertible into or
exchangeable
for any capital stock of the Company, (ii) warrants, rights or options to subscribe
for or
purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations or (iii) obligations of the Company to issue any such
capital
stock, any such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
-3-
(h) Deloitte & Touche LLP, who has certified certain of the financial
statements included in the Offering Memorandum (as specified more fully therein) and
delivered its report with respect to the audited financial statements of the Company in
the Offering Memorandum, is an independent auditor with respect to the Company within the
meaning of the Securities Act and the applicable rules and regulations thereunder.
(i) PricewaterhouseCoopers LLP, who has certified certain of the financial
statements included in the Offering Memorandum (as specified more fully therein) and
delivered its report with respect to the audited financial statements of Xxxxxxxxxxx in
the Offering Memorandum, is an independent auditor with respect to Xxxxxxxxxxx within the
meaning of the Securities Act and the applicable rules and regulations thereunder.
(j) The financial statements (including the notes thereto) of the Company and
its consolidated subsidiaries and Xxxxxxxxxxx in the Offering Memorandum fairly present
the financial position, results of operations, cash flows and changes in shareholders’
equity of the Company and its consolidated subsidiaries and Xxxxxxxxxxx as of the dates
and for the periods specified therein; since the date of the latest of such financial
statements, there has been no change nor any development or event involving a prospective
change which has had or would reasonably be expected to have a Material Adverse Effect;
such financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved (except as
otherwise expressly disclosed in the notes thereto) and comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X under the
Securities Act; and the information set forth under the captions “Management’s Discussion
and Analysis of Financial Condition and Results of Operations of Xxxxxxx”, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Xxxxxxxxxxx”,
“Selected Consolidated Financial Data for Xxxxxxx” and “Selected Financial Data for
Xxxxxxxxxxx” in the Offering Memorandum that has been extracted from the financial
statements of the Company or Xxxxxxxxxxx have been fairly extracted from the financial
statements of the Company and its consolidated subsidiaries or Xxxxxxxxxxx, respectively,
fairly presents the information included therein and has been compiled on a basis
consistent with that of the audited financial statements included in the Offering
Memorandum.
(k) Except as disclosed in the Offering Memorandum, subsequent to the
respective dates as of which information is given in the Offering Memorandum, (i) none of
the Company and its subsidiaries have incurred any material liability or obligation,
direct or contingent, or entered into any material transaction in each case not in the
ordinary course of business; (ii) the Company has not purchased any of its outstanding
capital stock, and has not declared, paid or otherwise made any dividend or distribution
of any kind on any class of its capital stock; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of the Company and its
subsidiaries.
(1) The Company and its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
-4-
generally accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(m) This Agreement has been duly authorized, executed and delivered by the
Company and each Guarantor.
(n) The Registration Rights Agreement has been duly authorized by the Company
and each Guarantor and, on the Closing Date, will have been duly executed and delivered by
the Company and each Guarantor, and will constitute the legal, valid and binding
obligations of the Company and each Guarantor, enforceable against the Company and each
Guarantor in accordance with their respective terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
enforcement of creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity; and the Registration Rights Agreement will conform to the
description thereof in the Offering Memorandum.
(o) The Indenture conforms to the requirements of the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”), and to the rules and regulations of the
Securities and Exchange Commission (the “Commission”) applicable to an indenture that
is qualified thereunder.
(p) The Notes have been duly authorized and, on the Closing Date, when executed
and authenticated in the manner provided for in the Indenture and delivered to and paid
for by the Initial Purchaser as provided in this Agreement, will constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement
of creditors’ rights generally and except as enforcement thereof is subject to general
principles of equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement; the Guarantees have been duly authorized and, on the
Closing Date, upon the due issuance and delivery of the related Notes, will have been duly
executed and delivered and will constitute valid and legally binding obligations of each
of the Guarantors, and will be entitled to the benefits of the Indenture; the Exchange
Notes (as defined in the Registration Rights Agreement) have been duly authorized and,
when executed and authenticated in the manner provided for in the Registration Rights
Agreement and the Indenture, will constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting enforcement of creditors’ rights generally and except as
enforcement thereof is subject to general principles of equity, and will be entitled to
the benefits of the Indenture and the Registration Rights Agreement; and the Notes and the
Exchange Notes will conform to the descriptions thereof in the Final Memorandum.
(q) The execution, delivery and performance by the Company and each
Guarantor of this Agreement and the other Transaction Documents, the issuance and sale
of
-5-
the Notes and the compliance by the Company and each Guarantor with all of the provisions of
the Notes, the Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions contemplated hereby and thereby (including the Revolving
Credit Facility) will not (i) conflict with, result in a breach or violation of, or constitute
a default under, any indenture, mortgage, deed of trust or loan agreement, shareholders’
agreement or any other material agreement or instrument to which the Company or any Guarantor
is a party or by which the Company or any Guarantor is bound or any of their respective
properties are subject, or with the certificate of incorporation or by-laws of the Company or
any Guarantor, or any statute, rule or regulation or any judgment, order or decree of any
governmental authority or court or any arbitrator applicable to the Company or any Guarantor,
or (ii) require the consent, approval, authorization, order, registration or filing or
qualification with, any governmental authority or court, or body or arbitrator having
jurisdiction over the Company or any Guarantor, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer or sale of the
Notes and by Federal and state securities laws with respect to the obligations of the Company
and the Guarantors under the Registration Rights Agreement, except for such conflict, breach,
violation or default would not have a Material Adverse Effect.
(r) No legal or governmental proceedings or investigations are pending or
threatened to which the Company or any Guarantor is a party or to which any of the properties
of the Company or any Guarantor is subject, other than proceedings accurately described in the
Preliminary Memorandum and the Offering Memorandum and such proceedings or investigations that
would not, individually or in the aggregate, result in a Material Adverse Effect.
(s) There are no relationships, direct or indirect, between or among the Company
or any Guarantor, on the one hand, and the respective directors, officers, shareholders,
customers or suppliers of the Company or any Guarantor, on the other hand, that would be
required by the Securities Act to be disclosed in a prospectus were the Notes being issued and
sold in a public offering registered on Form S-1 under the Securities Act that are not so
disclosed in the Offering Memorandum; and there are no contracts or other documents that would
be required by the Securities Act to be disclosed in a prospectus were the Notes being issued
and sold in a public offering registered on Form S-1 under the Securities Act that are not so
disclosed in the Offering Memorandum.
(t) Each of the Company and each Guarantor is not now nor after giving effect to
the issuance of the Notes and the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby or described in the
Preliminary Memorandum or the Offering Memorandum, will be (i) insolvent, (ii) left with
unreasonably small capital with which to engage in its anticipated business or (iii) incurring
debts or other obligations beyond its ability to pay such debts or obligations as they become
due.
(u) The Company, Xxxxxxxxxxx and their respective Affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act
(“Regulation D”)) have not distrib-
-6-
uted and, prior to the later of (i) the Closing Date and (ii) the completion of the
distribution of the Notes, will not distribute any offering material in connection with
the offering and sale of the Notes other than the Preliminary Memorandum, the Offering
Memorandum or any amendment or supplement thereto.
(v) The Company and its subsidiaries have not sustained, since the date of the
latest audited financial statements included in the Offering Memorandum (exclusive of any
amendment or supplement thereto), any loss or interference with its business or
properties from fire, explosion, flood, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or
decree (whether domestic or foreign) otherwise than as set forth in the Offering
Memorandum (exclusive of any amendment or supplement thereto); and, since such date,
there has not occurred any change or development having a Material Adverse Effect.
(w) The statements set forth in the Offering Memorandum under the captions
“Description of Certain Indebtedness”, “Description of Notes”, “Exchange Offer;
Registration Rights”, and “Notice to Investors”, insofar as such statements constitute
summaries of legal documents, fairly summarize in all material respects such documents.
(x) Except to the extent that such would not have a Material Adverse Effect,
the Company and each Guarantor have good and marketable title in fee simple to all items
of real property and good and marketable title to all personal property owned by each of
them except as set forth in the Offering Memorandum, free and clear of any pledge, lien,
encumbrance, security interest or other defect or claim of any third party. Any property
leased by the Company and each Guarantor is held under valid, subsisting and enforceable
leases, and there is no default under any such lease or any other event that with notice
or lapse of time or both would constitute a default thereunder, except to the extent that
such would not have a Material Adverse Effect.
(y) No “prohibited transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding
deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in
Section 4043(c) of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred, exists or is
reasonably expected to occur with respect to any employee benefit plan (as defined in
Section 3(3) of ERISA) which the Company or any Guarantor maintains, contributes to or
has any obligation to contribute to, or with respect to which the Company or any
Guarantor has any liability, direct or indirect, contingent or otherwise (a “Plan”); each
Plan is in compliance in all material respects with applicable law, including ERISA and
the Code; none of the Company or any Guarantor has incurred or expects to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from, any Plan;
and each Plan that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action or failure
to act, which would reasonably be expected to cause the loss of such qualification.
-7-
(z) Except as disclosed in each Memorandum, no labor dispute with the
employees of the Company or any Guarantor exists, is imminent or is threatened, and the
senior officers of the Company and each Guarantor are not aware of any existing, imminent
or threatened labor disturbance by the employees of any of their respective principal
suppliers, manufacturers, customers or contractors, which, in either case, would
reasonably be expected to result in a Material Adverse Effect.
(aa) No proceedings for the merger, consolidation, liquidation or dissolution
of the Company or any Guarantor or the sale of all or a material part of the assets of
the Company or any Guarantor is pending or contemplated.
(bb) The Company and each Guarantor owns or otherwise possesses adequate rights
to use all material patents, trademarks, service marks, trade names and copyrights, all
applications and registrations for each of the foregoing, and all other material
proprietary rights and confidential information necessary to conduct their respective
businesses as currently conducted, except where the failure to own or otherwise possess
such rights would not have a Material Adverse Effect; none of the Company or any
Guarantor has received any notice, or is otherwise aware, of any infringement of or
conflict with the rights of any third party with respect to any of the foregoing.
(cc) Except to the extent that such would not have a Material Adverse Effect,
the Company and each Guarantor is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts and with such
deductibles as are prudent in the business in which it is engaged; and none of the
Company or any Guarantor has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue their respective
businesses at a cost that would not have a Material Adverse Effect.
(dd) (i) The Company and each Guarantor has complied with all laws, ordinances,
regulations and orders applicable to the Company and (ii) each Guarantor, and their
respective businesses, and none of the Company or any Guarantor has received any notice
to the contrary; and each of the Company and each Guarantor possesses all certificates,
authorizations, permits, licenses, approvals, orders and franchises (collectively,
“Licenses”) necessary to conduct their respective businesses in the manner and to the
full extent now operated or proposed to be operated as described in the Offering
Memorandum, in each case issued by the appropriate federal, state, local or foreign
governmental or regulatory authorities (collectively, the “Agencies”), and each other
federal, state and local agency the regulations of which are applicable to the businesses
or products of the Company and each Guarantor; except in the case of (i) and (ii) where
the failure to so comply or to possess such Licenses would not have a Material Adverse
Effect.
(ee) The operation of the business of the Company and each Guarantor in the
manner and to the full extent now operated or proposed to be operated as described in the
Offering Memorandum is in accordance with the Licenses, and all orders, rules and
regulations of the Agencies, and no event has occurred which permits (nor has an event
occurred which with notice or lapse of time or both would permit) the revocation or
termi-
-8-
nation of any necessary Licenses or which might result in any other impairment of
the rights of the Company therein or thereunder except to the extent that such
revocation, termination or other impairment would not have a Material Adverse Effect, and
the Company and each Guarantor is in compliance with all statutes, orders, rules and
regulations of the Agencies relating to or affecting its operations except to the extent
that its failure to comply would not have a Material Adverse Effect.
(ff) Except as described in the Offering Memorandum:
(i) The Company and each Guarantor is and has been in compliance with all
applicable laws, statutes, ordinances, rules, regulations and requirements, and all
orders, judgments, decisions and decrees issued to the Company or the Guarantors, in each
case relating to: human health and safety; pollution; management, disposal or release of
any chemical substance, product or waste; and protection, cleanup, remediation or
corrective action relating to the environment or natural resources (“Environmental Law”),
except for any non-compliance that, individually or in the aggregate, would not result in
a Material Adverse Effect;
(ii) the Company and each Guarantor has obtained and is in compliance with the
conditions of all permits, authorizations, licenses, approvals and variances necessary
under any Environmental Law for the continued conduct in the manner now conducted of
their respective businesses (“Environmental Permits”), except for any failure to obtain
Environmental Permits or non-compliance that, individually or in the aggregate, would not
result in a Material Adverse Effect;
(iii) there are no past or present conditions or circumstances, including, to
the Company’s knowledge, pending changes in any Environmental Permits, (i) that are
likely to interfere with the conduct of the business of the Company and each Guarantor in
the manner now conducted, or (ii) which would interfere with compliance with any
Environmental Law or Environmental Permits, except for any such conditions or
circumstances that, individually or in the aggregate, would not result in a Material
Adverse Effect; and
(iv) there are no past or present conditions or circumstances at, or arising
out of, their respective businesses, assets and properties of the Company and each
Guarantor or, to the Company’s knowledge, any business, assets or properties formerly
leased, operated or owned by the Company or any Guarantor, including but not limited to
on-site or off-site disposal or release of any chemical substance, product or waste,
which may give rise to: (i) liabilities or obligations for any cleanup, remediation or
corrective action under any Environmental Law; (ii) claims arising under any
Environmental Law for personal injury, property damage, or damage to natural resources;
(iii) liabilities or obligations incurred by the Company or its any Guarantor to comply
with any Environmental Law; or (iv) fines or penalties arising under any Environmental
Law; except in each case for any that, individually or in the aggregate, would not result
in a Material Adverse Effect.
(gg) Neither the Company nor any Guarantor is in violation of its certificate of
incorporation or its bylaws, and no default or breach exists, and no event has occurred
-9-
that, with notice or lapse of time or both, would constitute a default in the due performance
and observation of any term, covenant or condition of any indenture, mortgage, deed of trust,
lease, loan agreement, shareholders’ agreement or any other material agreement or instrument
to which the Company or any Guarantor is a party or by which the Company or any Guarantor is
bound or to which any of their respective properties are subject, except where such default
would not result in a Material Adverse Effect.
(hh) Except to the extent that such would not have a Material Adverse Effect, the
Company and each Guarantor has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith and for which the Company and each Guarantor
retains adequate reserves.
(ii) Except as disclosed in the Offering Memorandum, as of the Closing Date and
after giving effect to the transactions described under the caption “Use of Proceeds” in the
Offering Memorandum, there are no contracts, agreements or understandings between the Company
or any Guarantor and any person granting such person the right to require the Company or any
Guarantor to file a registration statement under the Securities Act or to require the Company
to include any debt securities held by any person in any registration statement filed by the
Company under the Securities Act.
(jj) Neither the Company nor any Guarantor is, nor after giving effect to the
offering and sale of the Notes and the application of the proceeds thereof as described in the
Offering Memorandum will be, an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940, as amended
(the “Investment Company Act”).
(kk) Other than the 2006 Private Placement (as defined in the Offering Memorandum) or
as described in the Offering Memorandum, within the preceding six months, none of the Company,
Xxxxxxxxxxx or any of their Affiliates has, directly or through any agent, made offers or
sales of any security of the Company, or solicited offers to buy or otherwise negotiated in
respect of any securities of the Company of the same or a similar class as the Notes, other
than the Notes offered or sold to the Initial Purchaser hereunder.
(ll) None of the Company, Xxxxxxxxxxx or any of its Affiliates has, directly or
through any person acting on its or their behalf (other than the Initial Purchaser, as to
which no statement is made), offered, solicited offers to buy or sold the Notes by any form of
general solicitation or general advertising (within the meaning of Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) of the Securities Act.
(mm) None of the Company, Xxxxxxxxxxx, any of their Affiliates, nor any person acting
on their behalf (other than the Initial Purchaser, as to which no statement is made), has
engaged in any directed selling efforts with respect to the Notes, and each of them has
complied with the offering restrictions requirement of Regulation S under the Securi-
-10-
ties Act (“Regulation S”). Terms used in this paragraph have the meanings given to them
by Regulation S.
(nn) None of the Company, Xxxxxxxxxxx or any of their Affiliates has taken,
directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company or Xxxxxxxxxxx to facilitate the
sale or resale of the Notes; nor has the Company, Xxxxxxxxxxx or any of their Affiliates
paid or agreed to pay to any person any compensation for soliciting another to purchase
any securities of the Company or Xxxxxxxxxxx (except as contemplated by this Agreement).
(oo) The Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the
Securities Act.
(pp) Assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 3 hereof and compliance by the Initial Purchaser with the procedures
set forth in Section 3 hereof, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the manner contemplated by this
Agreement and disclosed in the Offering Memorandum to register the Notes or the related
Guarantees under the Securities Act or to qualify the Indenture under the Trust Indenture
Act.
(qq) None of the Transactions (including, without limitation, the use of
proceeds from the sale of the Notes) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any regulation
promulgated thereunder, including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System.
(rr) There are, and during the last 12 months there have been, no material
disputes between the Company and any of its ten largest suppliers (“Material Suppliers”)
(as measured by dollar volume of goods purchased by the Company) or ten largest customers
(“Material Customers”) (as measured by dollar volume of products sold by the Company).
The Company’s relations with its Material Suppliers and Material Customers are good, and
the Company has received no notice, and is not otherwise aware, of any anticipated
dispute with any of its Material Suppliers and Material Customers, or that (i) any
Material Supplier intends to cease or reduce its supply to the Company or (ii) any
Material Customer intends to cease or reduce its purchases from the Company.
(ss) There are, and during the last 12 months there have been, no material
disputes between Xxxxxxxxxxx and any of its five Material Suppliers (as measured by
dollar volume of goods purchased by Xxxxxxxxxxx) or five Material Customers (as measured
by dollar volume of products sold by Xxxxxxxxxxx). Xxxxxxxxxxx’x relations with its
Material Suppliers and Material Customers are good, and Xxxxxxxxxxx has received no
notice, and is not otherwise aware, of any anticipated dispute with any of its Material
Suppliers and Material Customers, or that (i) any Material Supplier intends to cease or
reduce its supply to Xxxxxxxxxxx or (ii) any Material Customer intends to cease or reduce
its purchases from Xxxxxxxxxxx, except as disclosed in the Offering Memorandum in the
section “Manage-
-11-
ment’s Discussion and Analysis of Financial Condition and Results of Operations for
Xxxxxxxxxxx—Year Ended December 31, 2006 Compared with Year Ended December 31, 2005—Net
Sales”.
(tt) Except as disclosed in the Offering Memorandum, there are no agreements,
arrangements or understandings that will require the payment of any commissions, fees or other
remuneration to any investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement.
(uu) The Company and Xxxxxxxxxxx do not intend to treat any of the transactions
contemplated by the Transaction Documents as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4). In the event the Company or Xxxxxxxxxxx
determines to take any action inconsistent with such intention, it will promptly notify the
Initial Purchaser thereof. If the Company or Xxxxxxxxxxx so notifies the Initial Purchaser,
the Company acknowledges that the Initial Purchaser may treat its purchase and resale of Notes
as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and the
Initial Purchaser will maintain the lists and other records required by such Treasury
Regulation.
(vv) The Company has been advised by the NASD’s PORTAL Market that the Notes have
been designated PORTAL-eligible securities in accordance with the rules and regulations
of the NASD.
(ww) There are no stamp or other issuance or transfer taxes or duties or other similar
fees or charges required to be paid in connection with the execution and delivery of this
Agreement or the issuance or sale by the Company of the Notes.
(xx) None of the Company, its subsidiaries, or to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company, any of its subsidiaries is
aware of or has taken any action, directly or indirectly, that would result in a violation by
such Persons of Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA; and the Company, its
subsidiaries, Xxxxxxxxxxx and, to the knowledge of the Company, their respective Affiliates
have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
(yy) The operations of the Company and its subsidiaries are and have been conducted
at all times in compliance in all material respects with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
-12-
U.S. PATRIOT Act, the rules and regulations thereunder, and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened.
(zz) None of the Company, any of its subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee or Affiliate of the Company or any of
its subsidiaries is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(aaa) The Company or Xxxxxxxxxxx has not taken any action or omitted to take any
action (such as issuing any press release relating to any Securities without an
appropriate legend) which may result in the loss by the Initial Purchaser of the ability
to rely on any stabilization safe harbor provided by the Financial Services Authority
under the Financial Services and Markets Xxx 0000 (the “FSMA”). The Company and
Xxxxxxxxxxx have been informed of the guidance relating to stabilization provided by the
Financial Services Authority, in particular in Section MAR 2 Annex 2G of the Financial
Services Handbook.
(bbb) There is no subsidiary of the Company that is not a Guarantor hereunder.
Each certificate signed by any officer of the Company or the Guarantors and delivered to the
Initial Purchaser or their counsel shall be deemed to be a representation and warranty by the
Company or the Guarantors, as the case may be, to the Initial Purchaser as to the matters
covered thereby.
2. Purchase. Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell $120,000,000
aggregate principal amount of Notes, and the Initial Purchaser, agrees to purchase from the
Company the principal amount of Notes at a purchase price equal to 100.50% of the principal
amount thereof (the “Purchase Price”). One or more certificates in definitive form or global
form, as instructed by the Initial Purchaser has, and in such denomination or denominations
and registered in such name or names as the Initial Purchaser requests upon notice to the
Company not later than one full business day prior to the Closing Date (as defined below),
shall be delivered by or on behalf of the Company to the Initial Purchaser for the account of
the Initial Purchaser, with any transfer taxes payable in connection with the transfer of the
Notes to the Initial Purchaser duly paid, against payment by or on behalf of the Initial
Purchaser of the Purchase Price therefor by wire transfer in immediately available funds to
the account of the Company. Such delivery of and payment for the Notes shall be made at the
offices of Xxxxxx Xxxxxx & Xxxxxxx LLP (“Counsel for the Initial Purchaser”), 00 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000 at 10:00 A.M., New York City time, on April
-13-
2, 2007, or at such other place, time or date as the Initial Purchaser and the Company 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 Notes
available for examination by the Initial Purchaser at the New York, NY offices of Counsel
for the Initial Purchaser not later than 10:00 A.M., New York City time on the business
day prior to the Closing Date.
3. Offering of the Notes and the Initial Purchaser’s Representations and
Warranties. The Initial Purchaser represents and warrants to and agree with the
Company that:
(a) It is a qualified institutional buyer as defined in Rule 144 A under the
Securities Act (a “QIB”).
(b) It will solicit offers for such Notes only from, and will offer such Notes
only to, persons that it reasonably believes to be (A) in the case of offers inside
the United States, QIBs, (B) in the case of offers outside the United States, to
persons other than U.S. persons (“foreign purchasers”, which term shall include
dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or trust))
in reliance upon Regulation S under the Securities Act that, in each case, in
purchasing such Notes are deemed to have represented and agreed as provided in the
Offering Memorandum under the caption “Notice to Investors”.
(c) It will not offer or sell the Notes using any form of general solicitation
or general advertising (within the meaning of Regulation D) or in any manner
involving a public offering within the meaning of Section 4(2) under the Securities
Act.
(d) With respect to offers and sales outside the United States:
(i) at or prior to the confirmation of any sale of any Notes sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchases Notes from it during the distribution compliance period (as
defined in Regulation S) a confirmation or notice substantially to the
following effect:
“The Notes covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the “Securities
Act”), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons, (i) as
part of their distribution at any time; or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Notes and April 2, 2007, except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms
used above have the meanings given to them by Regulation S.”;
and
(ii) the Initial Purchaser has offered the Notes and will offer
and sell the Notes (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering
and the Closing Date, only in
-14-
accordance with Rule 903 of Regulation S or as otherwise permitted in Section
3(b); accordingly, the Initial Purchaser has not engaged nor will engage in
any directed selling efforts (within the meaning of Regulation S) with
respect to the Notes, and the Initial Purchaser has complied and will comply
with the offering restrictions requirements of Regulation S.
Terms used in this Section 3(d) have the meanings given to them by Regulation S.
4. Covenants of the Company. The Company covenants and agrees with the Initial
Purchaser that:
(a) The Company will prepare the Offering Memorandum in the form approved by
the Initial Purchaser and prior to the completion of the distribution will not amend
or supplement the Offering Memorandum without first furnishing to the Initial
Purchaser a copy of such proposed amendment or supplement and will not use any
amendment or supplement to which the Initial Purchaser may reasonably object.
(b) The Company will furnish to the Initial Purchaser and to Counsel for the
Initial Purchaser prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period referred to in paragraph
(c) below, without charge, as many copies of the Offering Memorandum and any
amendments and supplements thereto as they reasonably may request.
(c) At any time prior to the completion of the distribution of the Notes by the
Initial Purchaser, if any event occurs or condition exists as a result of which the
Offering Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were made,
not misleading, or if it should be necessary to amend or supplement the Offering
Memorandum to comply with applicable law, the Company will promptly (i) notify the
Initial Purchaser of the same; (ii) subject to the requirements of paragraph (a) of
this Section 4, prepare and provide to the Initial Purchaser, at its own expense, an
amendment or supplement to the Offering Memorandum so that the statements in the
Offering Memorandum as so amended or supplemented will not, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser, be
misleading or so that the Offering Memorandum, as amended or supplemented, will
comply with applicable law; and (iii) supply any supplemented or amended Offering
Memorandum to the Initial Purchaser and Counsel for the Initial Purchaser, without
charge, in such quantities as may be reasonably requested.
(d) The Company will (i) qualify the Notes and the Guarantees for sale by the
Initial Purchaser under the laws of such jurisdictions as the Initial Purchaser may
designate and (ii) maintain such qualifications for so long as required for the sale
of the Notes by the Initial Purchaser. The Company will promptly advise the Initial
Purchaser of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
-15-
(e) At any time prior to the completion of the distribution of the Notes by the
Initial Purchaser, the Company will deliver to the Initial Purchaser such additional
information concerning the business and financial condition of the Company or Xxxxxxxxxxx
(to the extent available to the Company) as the Initial Purchaser may from time to time
reasonably request and whenever it or any of its subsidiaries publishes or makes
available to the public (by filing with any regulatory authority or securities exchange
or by publishing a press release or otherwise) any information that would reasonably be
expected to be material in the context of the issuance of the Notes under this Agreement,
shall promptly notify the Initial Purchaser as to the nature of such information or
event. The Company will likewise notify the Initial Purchaser of (i) any decrease in the
rating of the Notes or any other debt securities of the Company by any nationally
recognized statistical rating organization (as defined in Rule 436(g)(2) under the
Securities Act) or (ii) any notice or public announcement given of any intended or
potential decrease in any such rating or that any such securities rating agency has under
surveillance or review, with possible negative implications, its rating of the Notes, as
soon as the Company becomes aware of any such decrease, notice or public announcement.
The Company will also, for a period of five years from the Closing Date, deliver to the
Initial Purchaser, as soon as available and without request, copies of any reports and
financial statements furnished to or filed with the Commission.
(f) The Company will not, and will not permit any of its Affiliates to, resell any
of the Notes that have been acquired by any of them, other than pursuant to an effective
registration statement under the Securities Act or in accordance with Rule 144 under the
Securities Act.
(g) Except as contemplated in the Registration Rights Agreement, none of the Company
or any of its Affiliates, nor any person acting on its or their behalf (other than the
Initial Purchaser or any of its Affiliates, as to which no statement is made) will,
directly or indirectly, make offers or sales of any security, or solicit offers to buy
any security, under circumstances that would require the registration of the Notes under
the Securities Act.
(h) None of the Company or any of its Affiliates, nor any person acting on its
or their behalf (other than the Initial Purchaser or any of its Affiliates, as to which
no statement is made), will solicit any offer to buy or offer to sell the Notes by means
of any form of general solicitation or general advertising (within the meaning of
Regulation D) or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(i) None of the Company or any of its Affiliates, nor any person acting on
its or their behalf (other than the Initial Purchaser or any of its Affiliates, as to
which no statement is made), will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Notes, and each of them will comply with the
offering restrictions requirements of Regulation S.
(j) None of the Company or any of its Affiliates, nor any person acting on
its or their behalf (other than the Initial Purchaser or any of its Affiliates, as to
which no
-16-
statement is made), will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any securities of the same or a similar class as the Notes, other
than the Notes offered or sold to the Initial Purchaser hereunder in a manner which would
require the registration under the Securities Act of the Notes.
(k) So long as any of the Notes are “restricted securities” within the meaning
of Rule 144(a)(3) under the Securities Act, at any time that the Company is not then
subject to Section 13 or 15(d) of the Exchange Act, the Company will provide at its
expense to each holder of the Notes and to each prospective purchaser (as designated by
such holder) of the Notes, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act. (This
covenant is intended to be for the benefit of the holders, and the prospective purchasers
designated by such holders from time to time, of the Notes.)
(1) The Company will apply the net proceeds from the sale of the Notes as set
forth under “Use of Proceeds” in the Offering Memorandum.
(m) Until completion of the distribution, neither the Company nor any of its
Affiliates will take, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Notes.
(n) For so long as any Notes are outstanding, the Company and its subsidiaries will
conduct its operations in a manner that will not subject the Company or any subsidiary
to registration as an investment company under the Investment Company Act.
(o) Each Note will bear a legend substantially to the following effect until
such legend shall no longer be necessary or advisable because the Notes are no longer
subject to the restrictions on transfer described therein:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER JURISDICTION AND IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS CONTAINED IN THE INDENTURE UNDER WHICH THIS NOTE WAS
ISSUED.
(p) The Company will not, directly or indirectly, offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company or warrants to purchase
debt se-
-17-
curities of the Company substantially similar to the Notes (other than the Notes
offered pursuant to this Agreement) for a period of 30 days after the date hereof,
without the prior written consent of Wachovia Capital Markets, LLC.
(q) The Company will, promptly after it has notified the Initial
Purchaser of any intention by the Company to treat the Transactions as being a
“reportable transaction” (within the meaning of Treasury Regulation Section
1.6011-4), deliver a duly completed copy of IRS Form 8886 or any successor form to
the Initial Purchaser.
(r) The Company acknowledges and agrees that the Initial Purchasers are
acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of the Notes and the Guarantees contemplated
hereby (including in connection with determining the terms of the offering) and not
as a financial advisor or a fiduciary to, or an agent of, the Company or any other
person. Additionally, the Initial Purchaser is not advising the Company as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction. The
Company shall consult with its own advisors concerning such matters and shall be
responsible for making their own independent investigation and appraisal of the
transactions contemplated hereby, and the Initial Purchaser shall have no
responsibility or liability to the Company with respect thereto. Any review by the
Initial Purchaser of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit of
the Initial Purchaser and shall not be on behalf of the Company, except to the
extent that the Initial Purchaser or an affiliate thereof has provided merger and
acquisition advisory services to the Company pursuant to the engagement letter dated
March 11, 2007.
5. Expenses.
(a) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company and the Guarantors will pay or
cause to be paid all expenses incident to the performance of their obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel
and the Company’s accountants in connection with the issuance and sale of the Notes and
all other fees or expenses in connection with the preparation of each Memorandum and all
amendments and supplements thereto, including all printing costs associated therewith, and
the delivering of copies thereof to the Initial Purchaser, in the quantities requested,
(ii) all costs and expenses related to the transfer and delivery of the Notes to the
Initial Purchaser, including any transfer or other taxes payable thereon, (iii) the cost
of producing any Blue Sky or legal investment memorandum in connection with the offer and
sale of the Notes under state securities laws and all expenses in connection with the
qualification of the Notes for offer and sale under state securities laws as provided in
Section 4(d) hereof, including filing fees and the reasonable fees and disbursements of
Counsel for the Initial Purchaser in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, (iv) any fees charged by rating agencies
for the rating of the Notes, (v) the fees and expenses, if any, incurred in connection
with the admission of the Notes for trading in PORTAL or any appropriate market system,
(vi) the costs and charges of the Trustee and any transfer agent, registrar or depositary,
(vii) the cost of the preparation, issuance
-18-
and delivery of the Notes, (viii) all costs and expenses relating to investor
presentations, including any “road show” presentations undertaken in connection with the
marketing of the offering of the Notes, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations, travel and lodging expenses of the
representatives (including of the Initial Purchaser) and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the road show,
and (x) all other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.
(b) If the sale of the Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchaser set forth in Section 6 hereof is not
satisfied because of any failure, refusal or inability on the part of the Company to
perform all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by any of the Initial Purchaser, the
Company will reimburse the Initial Purchaser upon demand for all reasonable out-of-pocket
expenses (including counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Notes.
6. Conditions to the Initial Purchaser’s Obligations. The obligations
of the Initial Purchaser to purchase and pay for the Notes shall be subject to the
accuracy of the representations and warranties of the Company in Section 1 hereof, in each
case as of the date hereof and as of the Closing Date, as if made on and as of the Closing
Date, to the accuracy of the statements of the Company’s officers made pursuant to the
provisions hereof, to the performance by the Company of its covenants and agreements
hereunder and to the following additional conditions:
(a) The Initial Purchaser shall have received (i) an opinion, dated the
Closing Date, of Mayer, Brown, Xxxx & Maw LLP, counsel for the Company, in form and
substance satisfactory to the Initial Purchaser, to the effect set forth in
Exhibit B hereto.
(b) The Initial Purchaser shall have received an opinion, dated the Closing
Date, of Xxxxxx Xxxxxx & Xxxxxxx LLP, Counsel for the Initial Purchaser, with
respect to the issuance and sale of the Notes and such other related matters as the
Initial Purchaser may reasonably require, and the Company shall have furnished to
such counsel such documents as it may reasonably request for the purpose of
enabling it to pass upon such matters. In rendering such opinion, such counsel may
rely as to certain matters of law upon the opinion of Xxxxx Xxxxx, Xxxx & Maw LLP
referred to in Section 6(a).
(c) The Initial Purchaser shall have received on each of the date hereof and
the Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Initial Purchaser and Counsel for
the Initial Purchaser, from Deloitte & Touche LLP, independent auditors of the
Company, and from PricewaterhouseCoopers LLP, independent auditors for Xxxxxxxxxxx,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Offering Memorandum;
provided that the letter shall use a “cut-off date”
-19-
within three days of the date of such letter and that their procedures shall extend to
financial information in the Final Memorandum not contained in the Preliminary
Memorandum. References to the Offering Memorandum in this paragraph (c) with respect to
either letter referred to above shall include any amendment or supplement thereto at the
date of such letter.
(d) (i) None of the Company, Xxxxxxxxxxx nor any Guarantor, shall have sustained,
since the date of the latest audited financial statements included in the Final
Memorandum (exclusive of any amendment or supplement thereto), any loss or interference
with their respective businesses or properties from fire, explosion, flood, accident or
other calamity, whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree (whether domestic or foreign) otherwise than as
set forth in the Offering Memorandum (exclusive of any amendment or supplement thereto);
and (ii) since the respective dates as of which information is given in the Preliminary
Memorandum or the Offering Memorandum, there shall not have been any change in the
long-term debt of the Company, Xxxxxxxxxxx or any Guarantor, or any change in or effect
on or any development having a prospective change in or effect on the business,
operations, properties, assets, liabilities, shareholders’ equity, earnings, condition
(financial or otherwise), results of operations or management of the Company, Xxxxxxxxxxx
or any Guarantor, whether or not in the ordinary course of business, otherwise than as
set forth in each such Memorandum (exclusive of any amendment or supplement thereto), the
effect of which, in any such case described in clause (i) or (ii), is, in the sole
judgment of the Initial Purchaser, so material and adverse as to make it impracticable or
inadvisable to market the Notes on the terms and in the manner described in the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(e) The Initial Purchaser shall have received a certificate, dated the Closing Date
and in form and substance satisfactory to the Initial Purchaser, of the Chief Executive
Officer and the Chief Financial Officer of the Company as to the accuracy of the
representations and warranties of the Company in this Agreement at and as of the Closing
Date; that the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing Date; and
as to the matters set forth in Sections 6(d) and (e).
(f) There shall not have been any decrease in the rating of the Notes or any of the
Company’s other debt securities by any “nationally recognized statistical rating agency”,
as that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and no such organization shall have publicly announced that it has under
surveillance or review its ratings of the Securities or any of the Company’s other debt
securities or any notice or public announcement given of any intended or potential decrease in any such rating or that any such securities rating agency has under
surveillance or review, with possible negative implications, its rating of the Notes.
(g) The Notes shall have been designated for trading on PORTAL.
-20-
(h) The Notes shall be eligible for clearance and settlement
through The Depository Trust Company (“DTC”), and Clearstream Banking and the
Euroclear System as indirect participants of DTC.
(i) On or before the Closing Date, the Initial Purchaser and Counsel for the
Initial Purchaser shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company or
Xxxxxxxxxxx.
(j) The acquisition of Xxxxxxxxxxx shall have been consummated
simultaneously on the Closing Date.
(k) The Company’s Revolving Credit Facility has been executed by all
parties and is in full force and effect.
7. Indemnification and Contribution.
(a) The Company and each Guarantor, jointly and severally, agrees to indemnify and
hold harmless the Initial Purchaser, its affiliates, directors and officers and each
person, if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any Initial Purchaser against any losses, claims, damages
or liabilities, joint or several, to which the Initial Purchaser or such other person may
become subject, 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 the Preliminary Memorandum or the Offering
Memorandum or any amendment or supplement thereto; or (ii) the omission or alleged
omission to state in the Preliminary Memorandum or the Offering Memorandum or any
amendment or supplement thereto a material fact necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading, and will
reimburse, as incurred, the Initial Purchaser and each such other person for any legal or
other expenses reasonably incurred by such Initial Purchaser or such other 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, that the Company and the Guarantors will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Memorandum, the Offering Memorandum or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished to the
Company by the Initial Purchaser specifically for use therein as set forth in Section 10
hereof.
(b) The Initial Purchaser will indemnify and hold harmless the Company and the
Guarantors and their respective affiliates, directors, officers, and each person, if any,
who controls any of the Company or the Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company, the Guarantors, any such affiliates, directors or
officers or such controlling person may become subject, 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 the
Preliminary Memorandum or the Offering Memorandum or any amendment or supplement thereto,
or (ii) the omission or alleged omission to state in
-21-
the Preliminary Memorandum or the Offering Memorandum or any amendment or supplement
thereto a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, 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
furnished to the Company by the Initial Purchaser specifically for use therein as set
forth in Section 10 hereof and, subject to the limitation set forth immediately preceding
this clause, will reimburse as incurred, any legal or other expenses reasonably incurred
by the Company or the Guarantors or any such affiliates, directors or officers or such
controlling person in connection with investigating, defending against or appearing as a
third-party witness in connection with, any such loss, claim, damage, liability or action
in respect thereof.
(c) Promptly after receipt by any person to whom indemnity may be available
under this Section 7 (the “indemnified party”) of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made against
any person from whom indemnity may be sought under this Section 7 (the “indemnifying
party”), notify such indemnifying party of the commencement thereof; but the failure so to
notify such indemnifying party will not relieve such indemnifying party from any liability
which it may have to such indemnified party otherwise than under this Section 7. In case
any such action is brought against any indemnified party, and such indemnified party
notifies the relevant indemnifying party of the commencement thereof, such indemnifying
party will be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof, jointly with any other indemnifying party similarly notified,
with counsel satisfactory to such indemnified party; provided, however,
that if the named parties in any such action (including impleaded parties) include both
the indemnified party and the indemnifying party and the indemnified party shall have
concluded, based on advice of outside counsel, that representation of both parties by the
same counsel would present such counsel with a conflict of interest, 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 an indemnifying party to an indemnified party of its election
so to assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, such indemnifying party will not be liable to such
indemnified party under this Section 7 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) such indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding sentence or
(ii) such indemnifying party does not promptly retain counsel satisfactory to such
indemnified party or (iii) such indemnifying party has authorized the employment of
counsel for such indemnified party at the expense of the indemnifying party. After such
notice from an indemnifying party to an indemnified party, such indemnifying party will
not be liable for the costs and expenses of any settlement of such action effected by such
indemnified party without the written consent of such indemnifying party. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by (i), (ii) or (iii) of the third sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (x) such settlement is entered into more than 30
days after receipt by such indemnifying
-22-
party of the aforesaid request and (y) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. An indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the indemnified party or any other
person that may be entitled to indemnification hereunder is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes an
unconditional release of the indemnified party and such other persons from all liability
arising out of such claim, action, suit or proceeding.
(d) (i) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 7 is unavailable or insufficient, for any reason, to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (including, without limitation, any legal or other expenses incurred in
connection with defending or investigating any action or claim) (or actions in respect
thereof) (“Losses”), the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other, in order to provide for just and equitable contribution, agree to
contribute to the amount paid or payable by such indemnified party as a result of such
Losses to which the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other, may be subject, in such proportion as is appropriate to reflect
(i) the relative benefits received by the Company and the Guarantors, on the one hand, and
the Initial Purchaser, on the other, from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is unavailable for any reason, not only
such relative benefits but also the relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchaser, on the other, in connection with the statements
or omissions or alleged statements or omissions that resulted in such Losses. The relative
benefits received by the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other, shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting expenses) received by the Company bear to the
total discounts and commissions received by the Initial Purchaser from the Company in
connection with the purchase of the Notes hereunder as set forth in the Final Memorandum.
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,
the Guarantors or the Initial Purchaser, the parties’ intent, relative knowledge, access
to information and opportunity to correct or prevent such statement or omission, and any
other equitable considerations appropriate in the circumstances. The Company, the
Guarantors and the Initial Purchaser agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to above.
Notwithstanding any other provision of this paragraph (d), the Initial Purchaser shall not
be obligated to make contributions hereunder that in the aggregate exceed the total
underwriting discounts and commissions received by the Initial Purchaser from the Company
in connection with the purchase of the Notes hereunder, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and each other person listed in Section 7(a) hereof shall have the
same rights to contribution as the Initial Pur-
-23-
chaser, and each affiliate, director or officer of the Company or any Guarantor and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company and the Guarantors.
(e) The obligations of the Company and the Guarantors under this Section 7 shall be
in addition to any obligations or liabilities which the Company and the Guarantors may
otherwise have and the obligations of the Initial Purchaser under this Section 7 shall
be in addition to any obligations or liabilities which the Initial Purchaser may
otherwise have.
8. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Guarantors, their
respective officers, and the Initial Purchaser set forth in this Agreement or made by or
on behalf of them, respectively, 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
Guarantors, their respective officers or directors or any controlling person referred to
in Section 7 hereof or the Initial Purchaser and (ii) delivery of and payment for the
Notes. The respective agreements, covenants, indemnities and other statements set forth in
Sections 5 and 7 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
9. Termination.
(a) The Initial Purchaser may terminate this Agreement with respect to the Notes by
notice to the Company at any time on or prior to the Closing Date in the event that the
Company shall have failed, refused or been unable to perform in any material respect all
obligations and satisfy in any material respect 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)
trading in securities generally on the New York Stock Exchange, the NASDAQ Global Market
or in the over-the-counter market shall have been suspended or minimum or maximum prices
shall have been established on any such exchange or market; (ii) there has been a material
disruption in commercial banking or securities settlement, payment or clearance services
in the United States; (iii) a banking moratorium shall have been declared by New York,
North Carolina or United States authorities or (iv) there shall have been (A) an outbreak
or escalation of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict involving the United
States, (C) the occurrence of any other calamity or crisis involving the United States or
(D) any change in general economic, political or financial conditions which has an effect
on the U.S. financial markets, currency exchange rates or controls or the international
financial markets that, in the case of any event described in this clause (iv), in the
sole judgment of the Initial Purchaser, makes it impracticable or inadvisable to proceed
with the offer, sale and delivery of the Notes as disclosed in the Preliminary Memorandum
or the Offering Memorandum, exclusive of any amendment or supplement thereto.
(b) Termination of this Agreement pursuant to this Section 9 shall be without
liability of any party to any other party except as provided in Sections 5 and 7 hereof.
10. Information Supplied by Initial Purchaser. The statements set forth under
the heading “Plan of Distribution” in the Preliminary Memorandum and the Offering
Memorandum,
-24-
to the extent such statements relate to the Initial Purchaser, constitute the only
information furnished by the Initial Purchaser to the Company for the purposes of
Sections l(a) and 7 hereof.
11. Notices. All communications hereunder shall be in writing and, if sent to
the Initial Purchaser, shall be delivered or sent by mail, telex or facsimile transmission
and confirmed in writing to Wachovia Capital Markets, LLC, One Wachovia Center, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: General Counsel, with a
copy to Xxxxxx Xxxxxx & Xxxxxxx, LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx
Xxxxxxxx, Esq. and if sent to the Company, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to the Company at Xxxxxxx Cable, Inc.,
0000 Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx with a copy to
Xxxxx Xxxxx, Xxxx & Maw LLP, 000 X. XxXxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxxx, Esq.
12. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Initial Purchaser, the Company and the Guarantors and their respective
successors and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and being for
the sole and exclusive benefit of the Initial Purchaser, the Company and the Guarantors
and their respective successors and legal representatives, and for the benefit of no other
person, except that (i) the indemnities of the Company contained in Section 7 of this
Agreement shall also be for the benefit of any person or persons who control the Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in Section 7 of
this Agreement shall also be for the benefit of the affiliates, directors and officers of
the Company and the Guarantors, and any person or persons who control the Company or the
Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act. No purchaser of Notes from the Initial Purchaser shall be deemed a successor
to the Initial Purchaser because of such purchase.
13. Applicable Law. This Agreement shall be governed by the laws of the State
of New York.
14. Consent to Jurisdiction and Service of Process.
(a) All judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of New York,
which jurisdiction is non-exclusive.
(b) Each party agrees that any service of process or other legal summons in
connection with any Proceeding may be served on it by mailing a copy thereof by registered
mail, or a form of mail substantially equivalent thereto, postage prepaid, addressed to
the served party at its address as provided for in Section 11 hereof. Nothing in this
Section shall affect the right of the parties to serve process in any other manner
permitted by law.
-25-
15. 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.
[The remainder of this page is intentionally left blank.]
-26-
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 an agreement binding the Company, the Guarantors and the
Initial Purchaser.
| Very truly yours, XXXXXXX CABLE, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | EVP/CFO | |||
| GUARANTORS: CCI ENTERPRISES, INC. CCI INTERNATIONAL, INC. OSWEGO WIRE INCORPORATED |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | VP/Secretary | |||
Accepted as of the date hereof.
WACHOVIA CAPITAL MARKETS, LLC
WACHOVIA CAPITAL MARKETS, LLC
| By: | /s/ W. A. Luther | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Managing Director | |||
EXHIBIT
A
[Form of Joinder Agreement]
WHEREAS, Xxxxxxx Cable, Inc. (the “Company”) and the Initial Purchaser named therein
(the “Initial Purchasers”) heretofore executed and delivered a Purchase Agreement,
dated March [__], 2007 (the “Purchase Agreement”), providing for the issuance and
sale of the Securities (as defined therein); and
WHEREAS, as a condition to the consummation of the offering of the Securities,
Xxxxxxxxxxx LLC (“Xxxxxxxxxxx”) has agreed to join in the Purchase Agreement on the
Closing Date.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, Xxxxxxxxxxx hereby agrees for the benefit of the Initial Purchaser,
as follows:
1. Joinder. Xxxxxxxxxxx hereby acknowledges that it has received and
reviewed a copy of the Purchase Agreement and all other documents it deems fit to enter
into this Joinder Agreement (the “Joinder Agreement”), and acknowledges and agrees
to (i) join and become a party to the Purchase Agreement as indicated by its signature
below; (ii) be bound by all covenants, agreements, representations, warranties and
acknowledgments attributable to Xxxxxxxxxxx in the Purchase Agreement as if made by, and
with respect to, Xxxxxxxxxxx; and (iii) perform all obligations and duties required of
Xxxxxxxxxxx pursuant to the Purchase Agreement.
2. Representations and Warranties and Agreements of Xxxxxxxxxxx. Xxxxxxxxxxx
hereby represents and warrants to and agrees with the Initial Purchasers that it has all
the requisite limited liability company power and authority to execute, deliver and
perform its obligations under this Joinder Agreement, that this Joinder Agreement has been
duly authorized, executed and delivered and that the consummation of the transaction
contemplated hereby has been duly and validly authorized.
3. Counterparts. This Joinder Agreement may be signed in one or more
counterparts (which may be delivered in original form or facsimile or
“pdf” file thereof),
each of which shall constitute an original when so executed and all of which together
shall constitute one and the same agreement.
4. Amendments. No amendment or waiver of any provision of this Joinder
Agreement, nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties thereto.
5. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
6. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
JOINDER 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.
IN WITNESS WHEREOF, the undersigned has executed this agreement this day of
April, 2007.
| XXXXXXXXXXX, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT B
FORM OF OPINION OF XXXXX XXXXX, XXXX & MAW LLP
[To be provided.]
SCHEDULE I
GUARANTORS
S-1
