EXHIBIT 1.1
EXECUTION COPY
$100,000,000
X'XXXXXXXX INDUSTRIES, INC.
10.63% Senior Secured Notes due 2008
PURCHASE AGREEMENT
September 25, 2003
CREDIT SUISSE FIRST BOSTON LLC
Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, X.X. 10010-3629
Dear Sirs:
1. Introductory. X'Xxxxxxxx Industries, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to Credit Suisse First Boston LLC (the
"Initial Purchaser") U.S.$100,000,000 principal amount of its 10.63% Senior Secured Notes due 2008 (the "Notes")
to be issued under an indenture to be dated as of September 29, 2003 (the "Indenture"), between the Company, the
Guarantors (as defined below) and The Bank of New York, as trustee (the "Trustee"), on a private placement basis
pursuant to an exemption under Section 4(2) of the United States Securities Act of 1933, as amended (the
"Securities Act").
The Company's obligations under the Notes, including the due and punctual payment of interest on the
Notes, will be unconditionally guaranteed (the "Guarantees") by X'Xxxxxxxx Industries Holdings, Inc., a Delaware
corporation ("Parent"), and X'Xxxxxxxx Industries - Virginia, Inc., a Virginia corporation, X'Xxxxxxxx Furniture
Factory Outlet, Inc., a Missouri corporation, and each of the Company's future domestic restricted subsidiaries
(the "Subsidiary Guarantors" and, together with Parent, the "Guarantors"). As used herein, the term "Offered
Securities" shall mean the Notes and the Guarantees thereof by the Guarantors, unless the context otherwise
requires.
The Offered Securities will be secured by (a) a first-priority lien on all property and assets now owned
or hereafter acquired by the Company and the Guarantors (including the capital stock of the Company), other than
Credit Agreement Priority Lien Collateral (as defined below), capital stock of the Subsidiary Guarantors and
Excluded Assets (as defined in the Indenture)(the "Note Priority Lien Collateral"), and (b) a second-priority
lien on all accounts receivable, inventory, deposit accounts (except any Asset Sales Proceeds Account (as defined
in the Indenture)) and proceeds thereof at any time owned or acquired by the Company or any Guarantor, (the
"Credit Agreement Priority Lien Collateral" and, together with the Note Priority Lien Collateral, the
"Collateral"). The Collateral securing the Offered Securities will be governed by the Indenture, a security
agreement to be dated September 29, 2003 (the "Security Agreement"), by the Company and the Guarantors in favor
of the Trustee, an intercreditor agreement to be dated September 29, 2003 (the "Intercreditor Agreement"), by and
among the Company, the Guarantors, the Trustee and General Electric Capital Corporation, the administrative agent
(the "Administrative Agent") under the Company's New Senior Credit Facility (as defined below), a control
agreement to be dated September 29, 2003 (the "Control Agreement"), by and between the Company and the Trustee,
and the Mortgages (the "Mortgages") by the Company and the Guarantors in favor of the Trustee. The Security
Agreement, the Intercreditor Agreement, the Control Agreement and the Mortgages are collectively referred to
herein as the "Security Documents". As used herein, the term "Operative Documents" refers to this Agreement, the
Indenture, the Registration Rights Agreement, the Security Agreement, the Intercreditor Agreement, the Control
Agreement and the Mortgages.
The holders of the Offered Securities will be entitled to the benefits of a Registration Rights
Agreement of even date herewith (the "Registration Rights Agreement") among the Company, the Guarantors and the
Initial Purchaser, for so long as such Offered Securities constitute "Transfer Restricted Securities" (as defined
in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities Exchange Commission (the "Commission") under the circumstances
set forth therein, (i) a registration statement under the Securities Act (the "Exchange Offer Registration
Statement") relating to the Notes in a like aggregate principal amount as the Offered Securities originally
issued under the Indenture, identical in all material respects to the Notes and the Guarantees and registered
under the Securities Act (the "Exchange Notes" and the "Exchange Guarantees," and together, the "Exchange
Securities") to be offered in exchange for the Offered Securities (such offer to exchange being referred to as
the "Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Offered Securities and to use their respective
commercially reasonable efforts to cause such Registration Statements to be declared and remain effective and
usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. The
Offered Securities and the Exchange Securities are referred to collectively as the "Securities."
2. 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) A preliminary offering circular and an offering circular relating to the Offered Securities has been
prepared by the Company and the Guarantors. Such preliminary offering circular (the "Preliminary
Offering Circular") and offering circular (the "Offering Circular"), as supplemented as of the date of
this Agreement, are hereinafter collectively referred to as the "Offering Document". On the date of this
Agreement, the Offering Document does not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon written information furnished to the
Company by Credit Suisse First Boston LLC ("the Initial Purchaser") specifically for use therein, it
being understood and agreed that the only such information is that described as such in Section 7(b)
hereof. Except as disclosed in the Offering Document, on the date of this Agreement, the Company's
Annual Report on Form 10-K most recently filed with the Securities and Exchange Commission (the
"Commission") and all subsequent reports, in each case as amended (collectively, the "Exchange Act
Reports"), which have been filed by the Company with the Commission or sent to shareholders pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act") do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading. The Exchange Act Reports, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(b) No order or decree preventing the use of the Offering Document, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration requirements of the
Securities Act has been issued and no proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company or the Guarantors, is contemplated.
(c) The market-related and customer-related data and estimates included in the Offering Document are based
on or derived from sources which the Company believes to be reliable.
(d) The Company has been duly incorporated and is an existing corporation in good standing under the laws of
the State of Delaware, with power and authority to own its properties and conduct its business as
described in the Offering Document; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where the failure to so qualify would
not have a Material Adverse Effect (as defined herein).
(e) The Parent has been duly incorporated and is an existing corporation in good standing under the laws of
the State of Delaware, with power and authority to own its properties and conduct its business as
described in the Offering Document; and Parent is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification (except where the failure to so qualify would not have a
Material Adverse Effect); all of the issued and outstanding capital stock of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the capital stock of the Company
owned by the Parent is owned free from liens, encumbrances and defects or any preemptive or similar
rights, other than (i) liens in favor of the Trustee and the Administrative Agreement pursuant to the
Indenture and the Security Documents and (ii) liens in favor of the administrative agent under the
Company's existing senior credit facility to be released on the Closing Date.
(f) Each Subsidiary Guarantor has been duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and authority to own its properties
and conduct its business as described in the Offering Document; and each Subsidiary Guarantor is duly
qualified to do business as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such qualification (except
where the failure to so qualify would not have a Material Adverse Effect); all of the issued and
outstanding capital stock of each Subsidiary Guarantor has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of each Subsidiary Guarantor, directly or through
subsidiaries, is owned free from liens, encumbrances and defects or any preemptive or similar rights,
other than liens in favor of the Trustee and the Administrative Agreement pursuant to the Indenture and
the Security Documents.
(g) The entities listed on Schedule II hereto are the only subsidiaries, direct or indirect, of the Company.
(h) This Agreement has been duly authorized, executed and delivered by the Company and each of the
Guarantors.
(i) The Company and the Guarantors have all requisite power and authority to enter into the Indenture. The
Indenture has been duly and validly authorized by the Company and the Guarantors, and upon its execution
and delivery and, assuming due authorization, execution and delivery by the Trustee, will constitute the
valid and legally binding obligations of the Company and the Guarantors, enforceable in accordance with
its terms, subject to the qualification that the enforceability of the Company's and the Guarantors'
obligations thereunder may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting creditors' rights and to
general equity principles. On the Closing Date, the Indenture will conform in all material respects
with the requirements of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules and regulations of the Commission applicable to an indenture which is qualified thereunder. The
Indenture will conform in all material respects to the description thereof in the Offering Document.
(j) The Company and the Guarantors have all requisite power and authority to enter into the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Company
and the Guarantors, and upon its execution and delivery and, assuming due authorization, execution and
delivery by the Initial Purchaser, will constitute the valid and legally binding obligations of the
Company and the Guarantors, enforceable in accordance with its terms, subject to the qualification that
the enforceability of the Company's and the Guarantors' obligations thereunder may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law), and, as to rights of
indemnification and contribution, by principles of public policy. The Registration Rights Agreement
conforms in all material respects to the description thereof in the Offering Document.
(k) The Company and the Guarantors have all requisite power and authority to enter into the Security
Documents. Each of the Security Documents has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery, will constitute the valid and legally binding
obligations of the Company and the Guarantors, enforceable in accordance with its terms, subject to the
qualification that the enforceability of the Company's and the Guarantors' obligations thereunder may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law), and, as
to rights of indemnification and contribution, by principles of public policy. Each of the Security
Documents will conform in all material respects to the description thereof in the Offering Document.
(l) The Notes have been duly and validly authorized by the Company and when duly executed by the Company in
accordance with the terms of the Indenture and, assuming due authentication of the Notes by the Trustee,
upon delivery to the Initial Purchaser against payment therefor in accordance with the terms hereof,
will have been validly issued and delivered, and will constitute valid and legally binding obligations
of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance
with their terms, subject to the qualification that the enforceability of the Company's obligations
thereunder may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights and to general equity
principles. The Notes will conform in all material respects to the description thereof in the Offering
Document.
(m) The Exchange Notes have been duly and validly authorized by the Company and if and when duly issued and
authenticated in accordance with the terms of the Indenture and delivered in accordance with the
Registration Rights Agreement, will constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in accordance with their
terms, subject to the qualification that the enforceability of the Company's obligations thereunder may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to general equity principles.
(n) The Guarantees have been duly and validly authorized by the Guarantors and when duly executed and
delivered by the Guarantors in accordance with the terms of the Indenture and upon the due execution,
authentication and delivery of the Notes in accordance with the Indenture and the issuance of the Notes
in the sale to the Initial Purchaser contemplated by this Agreement, will constitute valid and legally
binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their
terms, subject to the qualification that the enforceability of the Guarantors' obligations thereunder
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to general equity
principles. The Guarantees will conform in all material respects to the description thereof in the
Offering Document.
(o) The Exchange Guarantees have been duly and validly authorized by the Guarantors and if and when duly
executed and delivered by the Guarantors in accordance with the terms of the Indenture and upon the due
execution and authentication of the Exchange Notes in accordance with the Indenture and the issuance and
delivery of the Exchange Notes contemplated by the Registration Rights Agreement, will constitute valid
and legally binding obligations of the Guarantors, entitled to the benefits of the Indenture,
enforceable against the Guarantors in accordance with their terms, subject to the qualification that the
enforceability of the Guarantors' obligations thereunder may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(p) The execution, delivery and performance of this Agreement, the Indenture, the Registration Rights
Agreement and the Security Documents and the issuance and sale of the Offered Securities and compliance
with the terms and provisions thereof do not and will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (i) any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the
Company or the Guarantors or their respective properties, or (ii) any agreement or instrument to which
the Company or the Guarantors are a party or by which the Company or the Guarantors are bound or to
which any of the properties of the Company or the Guarantors is subject, or (iii) the charter or by-laws
of the Company or the Guarantors, except in the case of clauses (i) and (ii), any breach, violation or
default that would not, individually or in the aggregate, have a Material Adverse Effect.
(q) Except as disclosed in the Offering Document, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim against the Company, any
Guarantor or the Initial Purchaser for a brokerage commission, finder's fee or other like payment.
(r) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions contemplated by the Operative Documents in
connection with the issuance and sale of the Offered Securities by the Company and the Guarantors,
except for the order of the Commission declaring the Exchange Offer Registration Statement or the Shelf
Registration Statement effective and such consents, approvals, authorizations, orders or filings (i) as
may be required to perfect upon the security interests described in the Indenture and the Security
Documents, (ii) as may be required to release any existing Liens and (iii) under state securities or
Blue Sky laws.
(s) Except as disclosed in the Offering Document and except for liens in favor of the administrative agent
under the Company's existing senior credit facility, the Company and the Guarantors have good and
marketable title in fee simple to all real properties and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects except such as do not materially affect the value
thereof or materially interfere with the use made and proposed to be made thereof by the Company and the
Guarantors; and except as disclosed in the Offering Document, the Company and the Guarantors hold any
leased real or personal property under valid, subsisting and enforceable leases with no exceptions that
would materially interfere with the use made and proposed to be made thereof by them.
(t) The Company and the Guarantors possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business now operated by them and
have not received any notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or Guarantor, would
individually or in the aggregate have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company and its subsidiaries taken as a whole
("Material Adverse Effect").
(u) No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent that might have a Material Adverse Effect.
(v) The Company and the Guarantors own, possess or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any Guarantor, would individually or in the
aggregate have a Material Adverse Effect.
(w) Except as disclosed in the Offering Document, neither the Company nor any Guarantor is in violation of
any statute, any rule, regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is, to the Company's knowledge, subject to any
claim relating to any environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and neither the Company nor any
Guarantor is not aware of any pending investigation which might lead to such a claim.
(x) Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against
or affecting the Company, any Guarantor or any of their respective properties that, if determined
adversely to the Company or any Guarantor, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of the Company or any Guarantor to
perform its respective obligations under the Operative Documents or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(y) The financial statements included in the Offering Document present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and, except as otherwise disclosed in the
Offering Document, such financial statements have been prepared in all material respects in conformity
with the generally accepted accounting principles in the United States applied on a consistent basis.
(z) Except as disclosed in the Offering Document, since the date of the latest audited financial statements
included in the Offering Document neither the Company nor any Guarantor has sustained any material loss
or interference with its business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order or decree, and there has
been no material adverse change, nor, to the knowledge of the Company and the Subsidiary Guarantors, any
development or event involving a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and its subsidiaries taken as a
whole, and, except as disclosed in or contemplated by the Offering Document, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any class of its capital stock.
(aa) The Parent is subject to the reporting requirements of either Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, and the Parent and the Company file reports with the Commission on the
Electronic Data Gathering, Analysis, and Retrieval (XXXXX) system.
(bb) None of the Company or any of the Guarantors is an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under Section 8 of the United
States Investment Company Act of 1940 (the "Investment Company Act"); and none of the Company nor any of
the Guarantors is, and after giving effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the Offering Document will be, an "investment
company" as defined in the Investment Company Act.
(cc) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the
Offered Securities are listed on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
(dd) The offer and sale of the Offered Securities by the Company and the Guarantors to the Initial Purchaser
in the manner contemplated by this Agreement will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof and Regulation S; and it is not necessary to qualify
the Indenture in respect of the Offered Securities under the Trust Indenture Act in connection with the
offer and sale of the Offered Securities.
(ee) Neither the Company, nor the Guarantors, nor any of their respective affiliates, nor any person acting
on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in
the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities
Act) the Offered Securities or any security of the same class or series as the Offered Securities or
(ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any
form of general solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act or (B) with respect to any securities sold in reliance on Rule 903 of Regulation S, by
means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company,
the Guarantors, its affiliates and any person acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S and the sale of the Offered Securities
pursuant to Regulation S is not part of a plan or scheme to evade the registration provisions of the
Securities Act. The Company and the Guarantors have not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except for this Agreement.
(ff) Except as disclosed in the Offering Document, 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 or any Guarantor to include such securities with the Offered Securities registered pursuant to
any Registration Statement.
(gg) None of the Company, any Guarantor, nor any agent thereof acting on the behalf of them has taken, and
none of them will take, any action that might cause this Agreement or the issuance or sale of the
Offered Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System.
(hh) Each of the Company and the Guarantors carry, or are covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar businesses in similar
industries.
(ii) No "nationally recognized statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act, (i) has imposed (or has informed the Company or any Guarantor that
it is considering imposing) any condition (financial or otherwise) on the Company's or any Guarantor's
retaining any rating assigned to the Company or any Guarantor or any securities of the Company or any
Guarantor or (ii) has indicated to the Company or any Guarantor that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate
the direction of the possible change in, any rating so assigned or (b) any change in the outlook for any
rating of the Company, any Guarantor or any securities of the Company or any Guarantor; except that
Xxxxx'x Investors Service, Inc. has announced that its rating of the debt securities of the Company is
under surveillance with a negative outlook.
(jj) Neither the Company nor the Guarantors, nor, to the knowledge of the Company or any of the Guarantors,
any director, officer, agent, employee or other person associated with or acting on behalf of the
Company or the Guarantors, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any
unlawful bribe, rebate payoff, influence payment, kickback or other unlawful payment.
(kk) The Company is in compliance in all material respects with all presently applicable provisions of ERISA;
no "reportable event" (as defined in ERISA), has occurred with respect to any "pension plan" (as defined
in ERISA), for which the Company would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability 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 by
failure to act, which would cause the loss of such qualification.
(ll) Since the date as of which information is given in the Preliminary Offering Circular through the date
hereof, and except as may otherwise be disclosed or contemplated in the Offering Document, neither the
Company nor the Guarantors have (i) issued or granted any securities (other than pursuant to the
exercise of outstanding options or warrants), (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(mm) Each of the Company and the Guarantors (i) makes and keeps accurate books and records and (ii) maintains
internal accounting controls that 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.
(nn) Except as described in the Offering Document, neither the Company nor the Guarantors (i) is in violation
of its charter or by-laws, (ii) is in default in any respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any respect of any applicable law,
ordinance, governmental rule, regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the conduct of its business,
except, with regard to (ii) and (iii) of this paragraph, for such defaults, violations or failures that
would not reasonably be expected to have a Material Adverse Effect on the Company and the Guarantors.
(oo) Except for tax returns in the State of Arkansas, each of the Company and the Guarantors has filed all
federal, state and local income and franchise tax returns required to be filed through the date hereof
and have paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company
or the Guarantors which has had (nor does the Company or the Guarantors have any knowledge of any tax
deficiency which, if determined adversely to the Company or the Guarantors, might have) a Material
Adverse Effect on the Company and the Guarantors.
(pp) Prior to the date hereof, neither the Company nor any of its affiliates has taken any action which is
designed to or which has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in connection with the
offering of the Offered Securities.
(qq) The Offering Document contains all the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Securities Act.
(rr) No relationship, direct or indirect, required to be described under Item 404 of Regulation S-K, exists
between or among the Company on the one hand, and the directors, officers or stockholders of the Company
on the other hand, which is not described in the Offering Document.
(ss) The statements set forth in the Offering Circular under the caption "Description of the Notes," insofar
as they purport to constitute a summary of the terms of the Offered Securities, and under the captions
"Certain Relationships and Related Transactions," "Description of Senior Credit Facility," "Description
of Other Indebtedness," "Certain U.S. Federal Income Tax Considerations," and "Plan of Distribution,"
insofar as they purport to describe the provisions of the laws and documents referred to therein, are
accurate descriptions or summaries thereof in all material respects.
(tt) The Credit Agreement, to be dated September 29, 2003 (the "New Senior Credit Facility"), by and among
the Company, the Guarantors and the Administrative Agent, will be duly and validly authorized by the
Company and the Guarantors and, upon its execution and delivery, will constitute the valid and legally
binding obligations of the Company and the Guarantors, enforceable in accordance with its terms, subject
to the qualification that the enforceability of the Company's and the Guarantors' obligations thereunder
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether such enforceability is considered in a proceeding in equity or at
law), and, as to rights of indemnification and contribution, by principles of public policy. The New
Senior Credit Facility will conform in all material respects to the description thereof in the Offering
Document.
(uu) As of the Closing Date, the Company and the Guarantors will own the Collateral free and clear of all
Liens (other than Permitted Liens (as defined in the Indenture)), and no Financing Statements (as
defined herein) in respect of any property or assets of the Company or any Guarantor will be on file in
favor of any person other than those (i) in respect of Permitted Liens, (ii) in favor of the
Administrative Agent in respect of the New Senior Credit Facility and (iii) those to be terminated with
respect to existing indebtedness.
(vv) When executed and delivered to the Trustee on the Closing Date, the Indenture and the Security Documents
grant and create, in favor of the Trustee for the benefit of the Trustee and the holders of Offered
Securities (the "Secured Parties") as security for all of the Note Obligations, a valid and enforceable
security interest in the Collateral, and when the filings referred to in the following sentences are
made, such security interests will be perfected first priority security interests, with respect to the
Note Priority Lien Collateral and second priority security interests, with respect to the Credit
Agreement Priority Lien Collateral (in each case subject to Permitted Prior Liens). When delivered on
the Closing Date, each Mortgage will be delivered, duly acknowledged and, if required for recordation,
attested and otherwise will be in recordable form, and when such Mortgage is filed for record and
recorded in the filing office identified therein, the security interest of the Trustee in the real
property described therein will be duly perfected. Each of the Company and Guarantors is a "registered
organization" (as defined in Article 9 of the New York Uniform Commercial Code) under the law of the
state in which it is identified in the Indenture, as being organized, and on the Closing Date all
security interests granted under the Indenture and the Security Documents in Collateral consisting of
personal property or fixtures will be duly perfected to the extent such security interests may be
perfected by filing upon the filing of the financing statements referred to in Section 6(i) hereof. On
the Closing Date, (i) all Collateral consisting of Capital Stock of the Company will be represented by
certificated securities and (ii) such certificated securities and all promissory notes and other
instruments then evidencing or representing any Collateral will be delivered to the Trustee in pledge
for the benefit of the Secured Parties as security for all of the Note Obligations, duly endorsed by an
effective endorsement (unless such certificated securities, promissory notes and instruments are
Excluded Assets).
(ww) All Obligations under or in respect of the Offered Securities constitute "Senior Debt" as such term is
defined in, and for the purposes of, the indenture governing the Company's outstanding 13 3/8% senior
subordinated notes due 2009.
(xx) On the Closing Date, the Liens on the Note Priority Lien Collateral will not be subject in priority to
any other Liens, except Permitted Prior Liens and the Liens on the Credit Agreement Priority Lien
Collateral will not be subject in priority to any other Liens, except Liens securing Obligations under
the New Senior Credit Facility and Permitted Prior Liens and liens securing Obligations under the
Company's existing senior credit facility to be released on the Closing Date.
(yy) On the Closing date, the representations and warranties contained in the Security Documents will be true
and correct in all material respects.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein set forth, the Company and the
Guarantors agree to sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Company
and the Guarantors, at a purchase price of 92.25% of the principal amount at maturity thereof plus accrued
interest from September 29, 2003 to the Closing Date (as hereinafter defined) the principal amount of Offered
Securities set forth opposite its names in Schedule I hereto.
The Company and the Guarantors will deliver against payment of the purchase price the Offered Securities
in the form of one or more permanent global Securities in definitive form (the "Global Securities") deposited
with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co.,
as nominee for DTC. Interests in any permanent global Securities will be held only in book-entry form through
DTC, except in the limited circumstances described in the Offering Document. Payment for the Offered Securities
shall be made by the Initial Purchaser in Federal (same day) funds by wire transfer to an account at a bank
acceptable to the Initial Purchaser drawn to the order of the Company at the office of Xxxxxx & Xxxxxxx LLP, 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M. (New York time), on September 29, 2003 or at
such other time not later than seven full business days thereafter as the Initial Purchaser and the Company
determine, such time being herein referred to as the "Closing Date", against delivery to the Trustee as custodian
for DTC of the Global Securities representing all of the Offered Securities. The Global Securities will be made
available for checking at the above office of Xxxxxx & Xxxxxxx LLP at least 24 hours prior to the Closing Date.
4. Representations by Initial Purchaser; Resale by Initial Purchaser.
(a) The Initial Purchaser represents and warrants to the Company and the Guarantors that it is an
"accredited investor" within the meaning of Regulation D under the Securities Act.
(b) The Initial Purchaser acknowledges that the Offered Securities have not been registered under 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 except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchaser represents and agrees that it has
offered and sold the Offered Securities and will offer and sell the Offered Securities (i) as part of
their distribution at any time and (ii) otherwise until the later of the commencement of the offering
and the Closing Date, only in accordance with Rule 144A ("Rule 144A") or Rule 903 under the Securities
Act. Accordingly, neither the Initial Purchaser nor its affiliates, nor any persons acting on its or
their behalf, have engaged or will engage in any directed selling efforts with respect to the Offered
Securities, and the Initial Purchaser, its affiliates and all persons acting on its or their behalf have
complied and will comply with the offering restrictions requirement of Regulation S. The Initial
Purchaser agrees that, at or prior to confirmation of sale of the Offered Securities, other than a sale
pursuant to Rule 144A, the Initial Purchaser will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases the Offered Securities from it
during the restricted period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S. Securities Act
of 1933 (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 date
of the commencement of the offering and the closing date, except in either case in
accordance with Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by Regulation S.
(c) The Initial Purchaser agrees that it and each of its affiliates has not entered and will not enter into
any contractual arrangement with respect to the distribution of the Offered Securities except for any
such arrangements with the prior written consent of the Company.
(d) The Initial Purchaser agrees that it and each of its affiliates will not offer or sell the Offered
Securities by means of any form of general solicitation or general advertising, within the meaning of
Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar media or broadcast over
television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. The Initial Purchaser agrees, with respect to resales made in
reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such
Offered Securities has been made in reliance upon the exemption from the registration requirements of
the Securities Act provided by Rule 144A.
(e) The Initial Purchaser represents and agrees that (i) it has not authorized the notes to be offered to
the public in the United Kingdom, within the meaning of the Public Offers of Securities Regulations
1995, as amended, and no Offering Document may be passed on to any person in the United Kingdom unless
that person is of a kind described in Article 19 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001 or is a person to whom the document may otherwise lawfully be issued or
passed on. The Offering Document is only directed at persons having professional experience in matters
relating to investments and the offering described in the Offering Document is only available to such
persons and only such persons will be permitted to participate in the offering. Persons who do not have
professional experience in matters relating to investments should not rely on the Offering Document.
All applicable provisions of the Financial Services and Markets Act 2000, as amended, must be complied
with in respect of anything done in relation to the notes in, from or otherwise involving the United
Kingdom.
5. Certain Agreements of the Company and the Guarantors. The Company and the Guarantors, jointly and
severally, agree with the Initial Purchaser that:
(a) The Company will advise the Initial Purchaser promptly of any proposal to amend or supplement the
Offering Document and will not effect such amendment or supplementation without the Initial Purchaser's
consent. If, at any time prior to the completion of the resale of the Offered Securities by the Initial
Purchaser any event occurs as a result of which the Offering Document as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not
misleading, the Company promptly will notify the Initial Purchaser of such event and promptly will
prepare, at its own expense, an amendment or supplement which will correct such statement or omission or
effect such compliance. Neither the Initial Purchaser's consent to, nor its delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(b) The Company will furnish to the Initial Purchaser copies of any preliminary offering circular, the
Offering Document and all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Initial Purchaser reasonably requests. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish or
cause to be furnished to the Initial Purchaser and, upon request of holders and prospective purchasers
of the Offered Securities, to such holders and purchasers, copies of the information required to be
delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the Offered Securities. The Company will pay the
expenses of printing and distributing to the Initial Purchaser all such documents.
(c) The Company and the Guarantors will arrange for the qualification of the Offered Securities for sale and
the determination of their eligibility for investment under the laws of such jurisdictions in the United
States and Canada as the Initial Purchaser designates and will continue such qualifications in effect so
long as required for the resale of the Offered Securities by the Initial Purchaser, provided that
neither the Company nor any Guarantor will be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(d) During the period of two years after the Closing Date, the Company will, upon reasonable request,
furnish to the Initial Purchaser and any holder of Offered Securities a copy of the restrictions on
transfer applicable to the Securities.
(e) During the period of two years after the Closing Date, the Company will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them.
(f) During the period of two years after the Closing Date, the Company will not be or become, an open-end
investment company, unit investment trust or face-amount certificate company that is or is required to
be registered under Section 8 of the Investment Company Act.
(g) Each of the Company and the Guarantors, jointly and severally, agrees to pay all expenses incidental to
the performance of its obligations under this Agreement, the Indenture, the Registration Rights
Agreement and the Security Documents, including (i) the fees and expenses of the Trustee and its
professional advisers, (ii) all reasonable expenses in connection with the execution, issue,
authentication, packaging and initial delivery of the Offered Securities and, as applicable, the
Exchange Securities, the preparation and printing of this Agreement, the Registration Rights Agreement,
the Offered Securities, the Indenture, the Guarantees, the Security Documents, the Offering Document and
amendments and supplements thereto, and any other document relating to the issuance, offer, sale and
delivery of the Offered Securities and, as applicable, the Exchange Securities, (iii) the cost of
qualifying the Offered Securities for trading in The PortalSM Market ("PORTAL") of The Nasdaq Stock
Market, Inc. and any expenses incidental thereto, (iv) for any reasonable expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the Offered Securities or the
Exchange Securities for sale under the laws of such jurisdictions as the Initial Purchaser designates
and the printing of memoranda relating thereto, (v) for any fees charged by investment rating agencies
for the rating of the Offered Securities or the Exchange Securities, and (vi) for reasonable expenses
incurred in distributing preliminary offering circulars and the Offering Document (including any
amendments and supplements thereto) to the Initial Purchaser. The Company and the Guarantors will
reimburse the Initial Purchaser for all reasonable travel expenses of the Initial Purchaser and the
Company's and the Guarantors' respective officers and employees and any other expenses of the Initial
Purchaser and the Company and the Guarantors in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities.
(h) In connection with the offering, until the Initial Purchaser shall have notified the Company of the
completion of the resale of the Offered Securities, neither the Company nor any of its affiliates has or
will, either alone or with one or more other persons, bid for or purchase for any account in which it or
any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person
to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the
Offered Securities.
(i) For a period of 180 days after the date of the initial offering of the Offered Securities by the Initial
Purchaser, the Company and each of the Guarantors will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any United States dollar-denominated debt securities
issued or guaranteed by the Company or any Guarantor and having a maturity of more than one year from
the date of issue, except issuances of Offered Securities pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or options, in each case outstanding
on the date hereof, grants of employee stock options pursuant to the terms of a plan in effect on the
date hereof, issuances of Offered Securities pursuant to the exercise of such options or the exercise of
any other employee stock options outstanding on the date hereof. Neither the Company nor any Guarantor
will at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any securities under circumstances where such offer, sale, pledge, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the offer and
sale of the Securities.
(j) The Company will apply the net proceeds from the sale of the Offered Securities to be sold by it
hereunder substantially in accordance with the description set forth in the Offering Document under the
caption "Use of Proceeds."
(k) Except as stated in this Agreement and in the Offering Document, neither the Company, the Guarantors nor
any of their respective affiliates have taken, nor will any of them take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company or any of the Guarantors to facilitate the sale
or resale of the Offered Securities. Except as permitted by the Securities Act, the Company and the
Guarantors will not distribute any offering material in connection with resales of the Offered
Securities.
(l) The Company and the Guarantors will use their commercially reasonable efforts to permit the Offered
Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by
the National Association of Securities Dealers, Inc. relating to trading in PORTAL and to permit the
Offered Securities to be eligible for clearance and settlement through DTC.
(m) The Company and the Guarantors agree not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act), that would be integrated with
the sale of the Offered Securities in a manner that would require the registration under the Securities
Act of the sale to the Initial Purchaser or the resale of the Offered Securities.
(n) The Company and the Guarantors agree to comply with all the terms and conditions of the Operative
Documents and all agreements set forth in the representation letters of the Company and the Guarantors
to DTC relating to the approval of the Offered Securities by DTC for "book entry" transfer.
(o) The Company and the Guarantors will do and perform all things required or necessary to be done and
performed under this Agreement by them prior to the Closing Date, and to satisfy all conditions
precedent to the Initial Purchaser's obligations hereunder to purchase the Offered Securities.
(p) The Company and the Guarantors shall deliver to the Trustee within 30 days after the Closing Date:
(i) appropriately completed copies, which have been duly authorized for filing by the appropriate Person, of
Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to release all
Liens (other than Permitted Prior Liens) of any Person in any Collateral described in the
Indenture and the Security Documents previously granted by any Person; and
(ii) confirmation reasonably satisfactory to the Trustee that the Mortgages have been duly filed and recorded
within thirty days following the Closing Date and a policy of title insurance in form and
substance reasonably satisfactory to the Initial Purchaser, insuring each Mortgage to be a
valid, enforceable and perfected Lien upon all real property described therein, free from all
prior Liens except Permitted Prior Liens, for the full amount of the Note Obligations.
6. Conditions of the Obligations of the Initial Purchaser. The obligations of the Initial Purchaser to
purchase and pay for the Offered Securities will be subject to the accuracy of the representations and warranties
on the part of the Company and the Guarantors herein, to the accuracy of the statements of officers of the
Company and the Guarantors made pursuant to the provisions hereof, to the performance by the Company and the
Guarantors of their respective obligations hereunder and to the following additional conditions precedent:
(a) The Initial Purchaser shall have received a letter, dated the date of this Agreement, of
PricewaterhouseCoopers LLP confirming that they are independent public accountants within the meaning of
the Securities Act and the applicable published rules and regulations thereunder ("Rules and
Regulations") and to the effect that:
(i) on the basis of a reading of the latest available interim financial statements of the Company, inquiries
of officials of the Company who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that caused them to believe that:
(A) at the date of the latest available balance sheet read by such accountants, there was any changes in the
capital stock, any increase in long-term indebtedness or any decrease in consolidated
net current assets (working capital) or stockholder's equity (deficit) of the Company
and its consolidated subsidiaries as compared with amounts shown on the latest balance
sheet included in the Offering Document, or, for the period from the closing date of
the latest income statement included in the Offering Document to the closing date of
the latest available income statement read by such accountants there were any
decreases, as compared with the corresponding period of the previous year ended the
date of the latest available income statement read by such accountants, in the total
consolidated net sales, income from operations or net income,
(B) at a specified date not more than three business days prior to the date of this Agreement, there were
any changes in the capital stock, any increase in long-term indebtedness or any
decrease in consolidated net current assets (working capital) or stockholder's equity
(deficit) of the Company and its consolidated subsidiaries as compared with amounts
shown on the latest balance sheet included in the Offering Document, or, for the
period from the closing date of the latest income statement included in the Offering
Document to such specified date, there were any decreases, as compared with the
corresponding period of the previous year ended the date of such specified date, in
the total consolidated net sales, income from operations or net income;
except in all cases set forth in clauses (A) and (B) above for changes, increases or decreases
which the Offering Document disclose have occurred or may occur or which are described in such
letter; and
(ii) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other
financial information contained in the Offering Document (to the extent that such dollar
amounts, percentages and other financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as otherwise specified in
such letter.
(b) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any
change, or any development or event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company or any of the Guarantors and their
respective subsidiaries which, in the reasonable judgment of the Initial Purchaser, is material and
adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale
of and payment for the Offered Securities; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible downgrading, of such
rating) or any announcement that the Company has been placed on negative outlook (other than an
announcement by Xxxxx'x Investors Service, Inc. that its rating of the debt securities of the Company is
under surveillance with a negative outlook); (iii) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange controls as would, in the
judgment of the Initial Purchaser, be likely to prejudice materially the success of the proposed issue,
sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings
in the secondary market; (iv) any material suspension or material limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter
market; (v) any banking moratorium declared by U.S. Federal or New York authorities; (vi) any major
disruption of settlements of securities or clearance services in the United States; or (vii) any attack
on, outbreak or escalation of hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international calamity or emergency if, in the
judgment of the Initial Purchaser, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the
offering or sale of and payment for the Offered Securities.
(c) The Initial Purchaser shall have received an opinion, dated the Closing Date, of Xxxxxxxx & Xxxxx LLP,
counsel for the Company and the Guarantors, reasonably acceptable to Xxxxxx & Xxxxxxx LLP and the
Initial Purchaser, substantially in the form of Exhibit A attached hereto.
(d) The Initial Purchaser shall have received from local counsel to the Company in the States of Virginia
and Missouri such opinion or opinions, dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, as to such matters under the laws of their respective states as
the Initial Purchaser may reasonably request.
(e) The Initial Purchaser shall have received from Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchaser,
such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Company and
certain Guarantors, the validity of the Offered Securities, the Guarantees by certain Guarantors, the
Offering Circular, the exemption from registration for the offer and sale of the Offered Securities
respectively to the Initial Purchaser and the resales by the Purchaser as contemplated hereby and other
related matters as the Initial Purchaser may require, and the Company and the Guarantors shall have
furnished to such counsel such documents as they request for the purpose of enabling them to pass upon
such matters.
(f) The Initial Purchaser shall have received a certificate, dated the Closing Date, of the President or any
Vice President and a principal financial or accounting officer of each of the Company and the Guarantors
in which such officers, to the best of their knowledge after reasonable investigation, shall state that
the representations and warranties of each of the Company and the Guarantors in this Agreement and in
the Security Documents are true and correct in all material respects, that each of the Company and the
Guarantors has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder and under the Security Agreements in all material respects at or prior to the
Closing Date, and that, subsequent to the date of the most recent financial statements in the Offering
Document there has been no material adverse change, nor any development or event that would result in a
material adverse change, in the condition (financial or other), business, properties or results of
operations of the Company, any Guarantor or any of their respective subsidiaries taken as a whole except
as set forth in the Offering Document or as described in such certificate.
(g) The Initial Purchaser shall have received a letter, dated the Closing Date, of PricewaterhouseCoopers
LLP, which letter shall be identical to the form of such letter agreed to by the Initial Purchaser as of
the date of this Agreement and which shall not contain any changes to the specified dollar amounts (or
percentages derived from such dollar amounts) or other financial information contained in the Offering
Document or the audit opinion of PricewaterhouseCoopers LLP delivered pursuant to Section 6(m) hereof.
(h) The Company shall have furnished or caused to be furnished to the Trustee on the Closing Date
certificates of officers of the Company and the Guarantors reasonably satisfactory to the Trustee as to
the accuracy of the representations and warranties of the Company and the Guarantors in the Operative
Documents at and as of such Closing Date and as to such other matters as the Trustee may reasonably
request.
(i) The Trustee shall have received (with a copy for the Initial Purchaser) at the Closing Date:
(i) appropriately completed copies, which have been duly authorized for filing by the appropriate Person, of
Uniform Commercial Code Financing Statements naming the Company and each Guarantor as a debtor
and the Trustee as the secured party, or other similar instruments or documents to be filed
under the UCC of all jurisdictions as may be necessary or, in the reasonable opinion of the
Trustee and its counsel, desirable to perfect the security interests of the trustee pursuant to
the Indenture and the Security Documents;
(ii) certified copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or a
similar search report certified by a party acceptable to the Trustee, dated a date reasonably
near to the Closing Date, listing all effective Financing Statements (as defined below) which
name the Company or any Guarantor (under its present name and any previous names) as the
debtor, together with copies of such Financing Statements (none of which shall cover any
Collateral described in the Indenture and the Security Documents, other than such Financing
Statements that evidence Permitted Prior Liens);
(iii) such releases, reconveyances, satisfactions or other instruments as it may reasonably request to confirm
the release, satisfaction and discharge in full of all mortgages and deeds of trust at any time
delivered by the Company or any Guarantor to secure any Obligations in respect of the existing
senior secured credit facility, duly executed, delivered and acknowledged in recordable form by
the grantee named therein or its of record successors or assigns;
(iv) a letter (in form and substance reasonably satisfactory to the Initial Purchaser) addressed to the
Trustee, executed and delivered by Xxxxxx Commercial Paper, Inc. as administrative agent under
the existing senior secured credit facility, stating the amount (the "Payout Amount") required
to pay in full in cash on the Closing Date all outstanding Obligations under or in respect of
the existing senior secured credit facility and confirming and agreeing that upon payment of
such amount all Liens securing such Obligations will be forever released and discharged;
(v) a certificate of insurance reasonably satisfactory to the Initial Purchaser confirming that all
insurance requirements of the Indenture and the Security Documents are satisfied;
(vi) a copy of each Security Document; and
(vii) such other approvals, opinions or documents as the Initial Purchaser or the Trustee may reasonably
request in form and substance satisfactory to each of them.
(j) All Uniform Commercial Code Financing Statements or other similar financing statements required pursuant
to clauses (i) above (collectively, the "Financing Statements") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to the Trustee (the "Filing
Agent"). The Filing Agent shall have acknowledged in a writing reasonably satisfactory to the Trustee
and its counsel (i) the Filing Agent's receipt of all Financing Statements, (ii) that the Financing
Statements have either been submitted for filing in the appropriate filing offices or will be submitted
for filing in the appropriate offices within ten days following the Closing Date and (iii) that the
Filing Agent will notify the Trustee and its counsel of the results of such submissions within 30 days
following the Closing Date
(k) The Company shall have consummated the New Senior Credit Facility on substantially the terms described
in the Offering Document and other terms reasonably satisfactory to the Initial Purchaser, and the
Initial Purchaser shall have received executed counterparts of the New Senior Credit Facility.
(l) On the Closing Date, the Company shall pay in full in cash the Payout Amount and all other fees, costs
and expenses payable by the Company in connection with the closing of the Financing Transaction and
shall have authorized disbursement of such cash proceeds directly to pay the Payout Amount and such
fees, costs and expenses pursuant to a disbursement authorization letter (in form and substance
reasonably satisfactory to the Initial Purchaser) executed and delivered by the Company and the
Guarantors, and the Initial Purchaser shall have received such other confirmation as any of them may
reasonably request as to the termination and discharge of the existing senior secured credit facility
and the release and discharge of all Liens securing Obligations thereunder.
(m) The Initial Purchaser shall have received a signed audit opinion of PricewaterhouseCoopers LLP with
respect to the audited consolidated financial statements of the Company and its subsidiaries for the
fiscal year ended June 30, 2003, which audit opinion shall not contain any explanatory paragraph
expressing substantial doubt about the Company's ability to continue as a going concern.
The Company and the Guarantors will furnish the Initial Purchaser with such conformed copies of such opinions,
certificates, letters and documents as the Initial Purchaser reasonably requests.
7. Indemnification and Contribution.
(a) Each of the Company and the Guarantors will, jointly and severally, indemnify and hold harmless the
Initial Purchaser, its partners, directors and officers and each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Initial Purchaser may become subject, under the
Securities Act or 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 any untrue statement or alleged untrue
statement of any material fact contained in the Offering Document, or any amendment or supplement
thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, including any losses, claims,
damages or liabilities arising out of or based upon the Company's or any Guarantor's failure to perform
its obligations under Section 5(a) of this Agreement, and will reimburse the Initial Purchaser for any
legal or other expenses reasonably incurred by the Initial Purchaser in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are incurred; provided,
however, that the neither the Company nor any Guarantor will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by the Initial Purchaser
specifically for use therein, it being understood and agreed that the only such information consists of
the information described as such in subsection (b) below.
(b) The Initial Purchaser will indemnify and hold harmless the Company, each Guarantor and their respective
directors and officers and each person, if any, who controls the Company and each Guarantor within the
meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which
the Company or any Guarantor may become subject, under the Securities Act or 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 any untrue statement or alleged untrue statement of any material fact contained
in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering
circular, or arise out of or are based upon the omission or the alleged omission to state therein a
material fact necessary in order 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, and will reimburse any legal or other expenses reasonably incurred by the
Company and any Guarantor in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and agreed that the only such
information furnished by the Initial Purchaser consists of the following information in the Offering
Document: the fourth, fifth, eighth, ninth, tenth and eleventh paragraphs under the caption "Plan of
Distribution"; provided, however, that the Initial Purchaser shall not be liable for any losses, claims,
damages or liabilities arising out of or based upon the Company's or any Guarantor's failure to perform
its obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that
it may have under subsection (a) or (b) above except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided,
further that the failure to notify the indemnifying party shall not relieve it from any liability that
it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of
the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes (i) an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or failure to act by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect 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 Offered Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above 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 which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. 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 net proceeds from the offering (before deducting expenses) received by the
Company and the Guarantors bear to the total discounts, fees and commissions received by the Initial
Purchaser from the Company and the Guarantors under this Agreement. The relative fault 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, any Guarantor or the Initial Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), the Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts, fees and commissions received by the Initial
Purchaser exceeds the amount of any damages which the Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
(e) The obligations of the Company and each Guarantor under this Section shall be in addition to any
liability which the Company and each Guarantor may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls the Initial Purchaser within the meaning of the
Securities Act or the Exchange Act; and the obligations of the Initial Purchaser under this Section
shall be in addition to any liability which the Initial Purchaser may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the Company and each Guarantor
within the meaning of the Securities Act or the Exchange Act.
8. Default of Initial Purchaser. [Intentionally Omitted].
9. Survival of Certain Representations and Obligations. The respective indemnities, agreements,
representations, warranties and other statements of the Company, the Guarantors or their respective officers and
of the Initial Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Initial
Purchaser, the Company, the Guarantors or any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Offered Securities. If for any reason the
purchase of the Offered Securities by the Initial Purchaser is not consummated, the Company and the Guarantors
shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company, the Guarantors and the Initial Purchaser pursuant to Section 7 shall remain in
effect. If the purchase of the Offered Securities by the Initial Purchaser is not consummated for any reason
other than solely because of the occurrence of any event specified in clause (iv), (v), (vi) or (vii) of
Section 6(b), the Company and the Guarantors will reimburse the Initial Purchaser for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent to the Initial Purchaser
will be mailed, delivered or telegraphed and confirmed to the Initial Purchaser at Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Transactions Advisory Group, or, if sent to the Company or any
Guarantor, will be mailed, delivered or telegraphed and confirmed to it at X'Xxxxxxxx Industries, Inc., 0000 Xxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000-1899, Attention: General Counsel; provided, however, that any notice to the Initial
Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to the Initial Purchaser.
11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and
their respective successors and the controlling persons referred to in Section 7, and no other person will have
any right or obligation hereunder, except that holders of Offered Securities shall be entitled to enforce the
agreements for their benefit contained in the second and third sentences of Section 5(b) hereof against the
Company and the Guarantors as if such holders were parties hereto.
12. Representation of Initial Purchaser. [Intentionally Omitted].
13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York without regard to principles of conflicts of laws.
The Company and each Guarantor hereby submit to the non-exclusive jurisdiction of the Federal and state
courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Initial Purchaser understanding of our agreement, kindly sign
and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between
the Company, the Guarantors and the Initial Purchaser in accordance with its terms.
Very truly yours,
X'XXXXXXXX INDUSTRIES, INC.
By:
Name:
Title:
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
By:
Name:
Title:
X'XXXXXXXX INDUSTRIES - VIRGINIA, INC.
By:
Name:
Title:
X'XXXXXXXX FURNITURE FACTORY OUTLET, INC.
By:
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and
accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
By:
Name:
Title:
SCHEDULE I
Principal Amount of
Initial Purchaser Offered Securities
Credit Suisse First Boston LLC .......................................... $100,000,000
Total ....................................... $100,000,000
SCHEDULE II
SUBSIDIARIES
X'Xxxxxxxx Industries - Virginia, Inc.
X' Xxxxxxxx Furniture Factory Outlet, Inc.
EXHIBIT A
OPINION OF XXXXXXXX & XXXXX LLP
