EXHIBIT 10.18
EXECUTION COPY
$300,000,000
RENT-A-CENTER, INC.
7 1/2% SENIOR SUBORDINATED NOTES DUE 2010
PURCHASE AGREEMENT
May 1, 2003
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
UBS WARBURG LLC
WACHOVIA SECURITIES, INC.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
RENT-A-CENTER, INC., a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell to
you, as the initial purchasers (the "Initial Purchasers"), $300,000,000 in
aggregate principal amount of its 7 1/2% Senior Subordinated Notes due 2010 (the
"Notes"). The Notes will (i) have terms and provisions that are summarized in
the Offering Memorandum (as defined below) and (ii) are to be issued pursuant to
an Indenture (the "Indenture") to be entered into among the Company, the
Guarantors (as defined below) and The Bank of New York, as trustee (the
"Trustee"). The Company's obligations under the Notes, including the due and
punctual payment of interest on the Notes, will be irrevocably and
unconditionally guaranteed (the "Guarantees") by Rent-A-Center East, Inc., a
Delaware corporation, ColorTyme, Inc., a Texas corporation, Rent-A-Center West,
Inc. (formerly known as Advantage Companies, Inc.), a Delaware corporation, Get
It Now, LLC, a Delaware limited liability company, Rent-A-Center Texas, L.P., a
Texas limited partnership, and Rent-A-Center Texas, L.L.C., a Nevada limited
liability company (collectively, the "Guarantors"). The Notes and the Guarantees
are collectively referred to as the "Securities." This is to confirm the
agreement concerning the purchase of the Securities from the Company by the
Initial Purchasers.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Company and
the Guarantors have prepared a preliminary offering memorandum dated April 25,
2003 (the "Preliminary Offering Memorandum") and will prepare an offering
memorandum dated the date hereof (the "Offering Memorandum") setting forth
information concerning the Company, the Guarantors, the Securities and the
Exchange Securities (as defined herein). Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company to the Initial Purchasers pursuant to the terms of this agreement
(the "Agreement"). The Company and the Guarantors hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in accordance with Section 2.
Any reference to the Preliminary Offering Memorandum or the
Offering Memorandum shall be deemed to refer to and include the Company's most
recent Annual Report on Form 10-K and all subsequent documents filed with the
United States Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or prior to the date of the
Preliminary Offering Memorandum or the Offering Memorandum, as the case may be
(the "Incorporated Documents"). Any reference to the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the Exchange Act after the date of the Preliminary Offering Memorandum or the
Offering Memorandum, as the case may be, and prior to such specified date. All
documents filed under the Exchange Act and so deemed to be included in the
Preliminary Offering Memorandum or the Offering Memorandum, as the case may be,
or any amendment or supplement thereto are hereinafter called the "Exchange Act
Reports."
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor, in substitution thereof) shall bear the
following legend (along with such other legends as the Initial Purchasers and
their counsel deem necessary):
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE Securities ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE Securities ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE Securities ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED
INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE Securities ACT, (5) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF RENT-A-CENTER, INC. SO REQUESTS) OR (6) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE Securities ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE
UNITED STATES."
You have advised the Company that you will make offers (the
"Exempt Resales") of the Securities purchased by you hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons whom you reasonable believe to be "qualified institutional buyers" (a
"Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act ("Rule 144A"); and (ii) outside the United States to certain persons in
offshore transactions in reliance on Regulation S under the Securities Act
("Regulation S"). Those persons specified in clauses (i) and (ii) are referred
to herein
2
as the "Eligible Purchasers". You will offer the Securities to Eligible
Purchasers initially at a price equal to 100.0% of the principal amount thereof.
Such price may be changed at any time without notice.
Holders of the Securities (including the Initial Purchasers
and their direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), among the Company, the Guarantors
and the Initial Purchasers to be dated May 6, 2003 (the "Closing Date"), for so
long as such 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
Commission, under the circumstances set forth therein, (i) a registration
statement under the Securities Act (the "Exchange Offer Registration Statement")
registering an issue of senior subordinated notes of the Company and guarantees
of each of the Guarantors (the "Exchange Securities") which are identical in all
material respects to the Securities (except that the Exchange Securities will
not contain terms with respect to transfer restrictions or additional interest
upon certain failures to comply with the Registration Rights Agreement) to be
offered in exchange for the Securities and (ii) under certain circumstances, a
shelf registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement").
The Company will use the net proceeds from the offering of the
Securities to repurchase all of the Company's outstanding 11% Senior
Subordinated Notes due 2008, Series D, and will use the remainder to repay a
portion of the term loans under the Credit Agreement (as defined herein).
1. Representations, Warranties and Agreements of the
Company and the Guarantors. The Company and each of the Guarantors, jointly and
severally, represent and warrant to the several Initial Purchasers on and as of
the date hereof and the Closing Date that:
(a) When the Securities are issued and delivered pursuant
to this Agreement, the Securities will not be of the same class (within
the meaning of Rule 144A) as securities of the Company or the
Guarantors that are listed on a national securities exchange registered
under Section 6 of the Exchange Act, or that are quoted in a United
States automated inter-dealer quotation system.
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date, the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a 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; except that this representation and warranty does not
apply to statements in or omissions from the Preliminary Offering
Memorandum and Offering Memorandum made in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished to the Company in writing by or on behalf of the Initial
Purchasers expressly for use therein.
(c) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchasers and the Exempt Resales in the manner contemplated by
this Agreement and the Offering
3
Memorandum, to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(e) The Company, the Guarantors and each of their
respective subsidiaries have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority would not, singularly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company, the
Guarantors and their respective subsidiaries taken as a whole (a
"Material Adverse Effect").
(f) The Company will, on the Closing Date, have
capitalization as set forth in the Offering Memorandum under the
heading "Capitalization"; and all of the outstanding shares of capital
stock of the Company and the Guarantors have been duly and validly
authorized and issued and are fully paid and non-assessable. All of the
outstanding 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 indirectly by the Company and
the Guarantors, respectively, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party, except for Permitted Liens (as that
term is defined in the Indenture) and as otherwise disclosed in the
Offering Memorandum.
(g) Each of the Company and each Guarantor has full
right, power and authority to execute and deliver this Agreement, the
Indenture, the Registration Rights Agreement, the Securities and the
Exchange Securities (collectively, the "Transaction Documents") to
which it is a party and to perform its obligations hereunder and
thereunder; and all corporate action required to be taken for the due
and proper authorization, execution and delivery of each of the
Transaction Documents to which it is a party and the consummation of
the transactions contemplated thereby have been duly and validly taken.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and each Guarantor.
(i) The Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement
of the Company and each of the Guarantors, enforceable against the
Company and each of the Guarantors in accordance with its terms, except
to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding
in equity or at law).
(j) The Indenture has been duly authorized by the Company
and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and
each of the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a
4
proceeding in equity or at law). On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust
Indenture Act and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(k) The Guarantees have been duly authorized by each of
the Guarantors and, when the Notes have been duly executed,
authenticated, issued and delivered as provided in the Indenture and
paid for as provided herein, will constitute a valid and legally
binding obligation of each of the Guarantors, enforceable against each
of the Guarantors in accordance with its terms, except to the extent
that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or
at law).
(l) The Securities and the Exchange Securities have been
duly authorized by the Company and each of the Guarantors and, when
duly executed, authenticated, issued and delivered as provided in the
Indenture and, in the case of the Notes, when paid for as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company and
each of the Guarantors, entitled to the benefits of the Indenture and
enforceable against the Company and the Guarantors in accordance with
their terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(m) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(n) The execution, delivery and performance by the
Company and each of the Guarantors of each of the Transaction Documents
to which it is a party, the issuance, authentication, sale and delivery
of the Securities and the use of proceeds thereof and compliance by the
Company and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents to which it is a party will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or the
Guarantors pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or 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 the property or assets of
the Company or any Guarantor is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the
Company or any Guarantor or any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or
body having jurisdiction over the Company or any Guarantor or any of
their respective properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such
court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for
the execution, delivery and performance by the Company or each of the
Guarantors of each of the Transaction Documents to which it is a party,
the issuance, authentication, sale and delivery of the Securities and
compliance by the Company and each of the Guarantors with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents to which it is a party, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which shall have been obtained or made prior to the Closing Date, (ii)
as may be required to be obtained or made under the Securities Act and
applicable state securities laws as
5
provided in the Registration Rights Agreement and (iii) which shall not
adversely affect the ability of the Company and each Guarantor to
consummate the transactions contemplated by the Transaction Documents.
(o) There are no contracts, agreements or understandings
between the Company, any Guarantor and any person granting such person
the right (other than rights which have been waived or satisfied) to
require the Company or any Guarantor to file a registration statement
under the Securities Act with respect to any securities of the Company
or any guarantor (other than the Registration Rights Agreement) owned
or to be owned by such person or to require the Company or any
Guarantor to include such securities in the securities registered
pursuant to the Registration Rights Agreement or in any securities
being registered pursuant to any other registration statement filed by
the Company or any Guarantor under the Securities Act.
(p) Xxxxx Xxxxxxxx LLP are independent certified public
accountants with respect to the Company and its subsidiaries (i) as
required by the Securities Act and the rules and regulations of the
Commission thereunder and (ii) within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings
thereunder. The historical financial statements (including the related
notes) contained or incorporated by reference in the Offering
Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Securities
Act; such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the
respective dates indicated and the results of their operations and
their cash flows for the respective periods indicated; and the
financial information contained in the Offering Memorandum under the
headings "Summary--Summary Historical Consolidated Financial
Information", "Capitalization", "Selected Historical Consolidated
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations", is derived from the accounting
records of the Company and its subsidiaries and such sections of the
Offering Memorandum fairly present the information purported to be
shown thereby in all material respects. The other historical financial
and statistical information and data included or incorporated by
reference in the Offering Memorandum are, in all material respects,
fairly presented.
(q) Except as otherwise stated in the Offering
Memorandum, there are no legal or governmental proceedings pending to
which the Company or any Guarantor is a party or of which any property
or assets of the Company or any Guarantor is the subject which,
singularly or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect; and to the best knowledge of the Company and
each Guarantor, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(r) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared by the Company and the Guarantors for use
by the Initial Purchasers in connection with Exempt Resales. No action
has been taken and no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency or body which
prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any
Guarantor which would prevent or suspend the issuance or sale of the
Securities or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; no action, suit or proceeding
is pending against or, to
6
the knowledge of the Company or any Guarantor after reasonable due
inquiry, threatened against or affecting the Company or any Guarantor
before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or in
any manner draw into question the validity or enforceability of any of
the Transaction Documents or any action taken or to be taken pursuant
thereto; and the Company and each Guarantor have complied with any and
all requests by any securities authority in any jurisdiction for
additional information to be included in the Preliminary Offering
Memorandum and the Offering Memorandum.
(s) Neither the Company nor any Guarantor is (i) in
violation of its charter or by-laws, (ii) in default in any material
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 material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) in
violation in any material respect of any material law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject.
(t) The Company and the Guarantors possess all material
licenses, certificates, authorizations and permits issued by, and have
made all declarations and filings with, the appropriate federal, state
or foreign regulatory agencies or bodies which are necessary or
desirable for the ownership of their respective properties or the
conduct of their respective businesses as described in the Offering
Memorandum, except where the failure to possess or make the same would
not, singularly or in the aggregate, have a Material Adverse Effect,
and neither the Company nor any Guarantor has received notification of
any revocation or modification of any such license, certificate,
authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in
the ordinary course.
(u) The Company and the Guarantors have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, except such returns, which individually or in the
aggregate, do not involve material amounts or where the failure to file
such returns by the Company and the Guarantors, as the case may be,
would not, individually or in the aggregate, materially adversely
affect the business, operations or prospects of such entity, and no tax
deficiency has been determined adversely to the Company or any
Guarantor, as the case may be, which has had (nor does the Company or
any Guarantor have any knowledge of any tax deficiency which, if
determined adversely to the Company or any Guarantor, as the case may
be, could reasonably be expected to have) a Material Adverse Effect,
except to the extent that the validity thereof is being contested in
good faith pursuant to appropriate proceedings.
(v) Neither the Company nor any Guarantor is, or after
giving effect to the offering and sale of the Securities and upon
application of the proceeds as described under the caption "Use of
Proceeds" in the Offering Memorandum, will be (i) 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"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
7
(w) The Company and the Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(x) The Company and the Guarantors maintain insurance of
the types and in the amounts generally deemed adequate for their
businesses and consistent with insurance coverage maintained by similar
companies and businesses, all of which insurance is in full force and
effect.
(y) The Company and the Guarantors own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
Company and the Guarantors have not received any notice of any claim of
conflict with, any such rights of others, except for such notices of
conflicts, which, if individually or in the aggregate determined
adversely to the Company or any Guarantor, as the case may be, would
not have a Material Adverse Effect.
(z) There are no contracts or other documents which are
required to be described in the Offering Memorandum by the Securities
Act or by the rules and regulations of the Commission thereunder which
have not been described in the Offering Memorandum or incorporated
therein by reference as permitted by such rules and regulations and
there are no contracts or other documents that would be required to be
filed as exhibits to a Company registration statement pursuant to Item
601(10) of Regulation S-K that have not been described in the Offering
Memorandum.
(aa) No relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Offering Memorandum which is
not so described.
(bb) The Company and the Guarantors have good and
marketable title to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the
business of the Company and the Guarantors, in each case free and clear
of all liens, encumbrances, claims and defects and imperfections of
title except such as (i) do not materially interfere with the use made
and proposed to be made of such property by the Company and the
Guarantors, (ii) pledged under the Senior Credit Facility (as such term
is defined in the Indenture) or (iii) could not reasonably be expected
to have a Material Adverse Effect.
(cc) No strike or work stoppages by the employees of the
Company or any Guarantor exists or, to the Company's or any Guarantor's
knowledge after reasonable due inquiry, is contemplated or threatened.
(dd) 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
8
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(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Company or any Guarantor which could reasonably be expected to have
a Material Adverse Effect; each such employee benefit plan is in
compliance in all material respects with applicable law, including
ERISA and the Code; the Company and each Guarantor have not incurred
and do not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any pension plan for
which the Company or any Guarantor would have any liability; and each
such pension 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 by failure to act, which could
reasonably be expected to cause the loss of such qualification.
(ee) There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission or
other release of any kind of toxic or other wastes or other hazardous
substances by, due to or caused by the Company or any Guarantor upon
any of the property now or, to the knowledge of the Company or any
Guarantor, as the case may be, previously owned or leased by the
Company or any Guarantor, in violation of any statute or any ordinance,
rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common
law), regulation, order, judgment, decree or permit, give rise to any
liability, except for any violation or liability which could not
reasonably be expected to have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; and there
has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with respect to
which the Company or any Guarantor has knowledge, except for any such
disposal, discharge, emission or other release of any kind which could
not reasonably be expected to have, singularly or in the aggregate with
all such discharges and other releases, a Material Adverse Effect.
(ff) Neither the Company nor any Guarantor nor, to the
Company's or any Guarantor's knowledge after reasonable due inquiry,
any employee or agent of the Company, or any Guarantor, 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 provisions of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(gg) On and immediately after the Closing Date, the
Company and each Guarantor (after giving effect to the issuance of the
Securities and to the other transactions related thereto as described
in the Offering Memorandum) will be Solvent. As used in this paragraph,
the term "Solvent" means, with respect to a particular date, that on
such date (i) the present fair market value (or present fair saleable
value) of the assets of the Company and of each Guarantor, as the case
may be, is not less than the total amount required to pay the probable
liabilities of the Company or such Guarantor on its total existing
debts and liabilities (including contingent liabilities) as they become
absolute and matured, (ii) each of the Company and the Guarantors is
able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of
the Securities as contemplated by this Agreement and the Offering
Memorandum, each of the Company and the Guarantors is not incurring
debts or liabilities beyond its ability to pay as such debts and
liabilities mature and (iv) the Company and each Guarantor is not
engaged in any business or transaction, and is not about to engage in
any business or transaction, for which its
9
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the
Company and each Guarantor is engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(hh) Neither the Company nor any Guarantor owns any
"margin securities" as that term is defined in Regulations T and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and none of the transactions contemplated by this
Agreement (including, without limitation, the use of proceeds from the
sale of the Securities), will violate or result in any violation of
Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including, without limitation, Regulations T, U and X of
the Federal Reserve Board.
(ii) Except as contemplated by this Agreement, neither the
Company nor any Guarantor is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company, any Guarantor or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Securities.
(jj) The Securities satisfy the eligibility requirements
of Rule 144A(d)(3) under the Securities Act.
(kk) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
none of the Company, any of the Guarantors, any of their respective
affiliates or any person acting on its or their behalf has engaged or
will engage in any directed selling efforts (as such term is defined in
Regulation S under the Securities Act ("Regulation S")), and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S to the extent applicable.
(ll) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
neither the Company nor any of the Guarantors nor any of their
affiliates has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as such term is defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that
would require registration of the Securities under the Securities Act.
(mm) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
none of the Company, any of the Guarantors, or any of their respective
affiliates or any other person acting on its or their behalf has
engaged, in connection with the offering of the Securities, in any form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act.
(nn) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof, the
Company, each Guarantor or any of their respective affiliates or any
other person acting on its or their behalf has engaged, has not taken
and will not take, directly or indirectly, any action prohibited by
Regulation M under the Exchange Act in connection with the offering of
the Securities.
(oo) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Preliminary Offering
10
Memorandum or the Offering Memorandum has been made or reaffirmed
without, in light of the circumstances under which such statements were
made, a reasonable basis or has been disclosed other than in good
faith.
(pp) Since the date as of which information is given in
the Offering Memorandum, except as otherwise stated therein, (i) there
has been no material adverse change or any development involving a
prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Company or any Guarantor, whether or not arising in
the ordinary course of business, (ii) the Company and the Guarantor
have not incurred any material liability or obligation, direct or
contingent, other than in the ordinary course of business, (iii) the
Company and the Guarantors have not entered into any material
transaction other than in the ordinary course of business and (iv)
there has not been any change in the capital stock or long-term debt of
the Company or any Guarantor, or except with respect to dividends of
the Company's Series A Preferred Stock, any dividend or distribution of
any kind declared, paid or made by the Company or any Subsidiary
Guarantor on any class of its capital stock, or any redemption in
respect thereof.
(qq) The minute books and records of the Company, the
Guarantors and their respective subsidiaries relating to proceedings of
their respective shareholders, boards of directors, and committees of
their respective boards of directors made available to Xxxxxx & Xxxxxxx
LLP, counsel for the Initial Purchasers, are their original minute
books and records or are true, correct and complete copies thereof,
with respect to all proceedings of said shareholders, boards of
directors and committees since April 2000 through the date hereof. In
the event that definitive minutes have not been prepared with respect
to any proceedings of such shareholders, boards of directors or
committees, the Company has provided Xxxxxx & Xxxxxxx LLP with
originals or true, correct and complete copies of draft minutes or
written agendas relating thereto, which drafts and agendas, if any,
reflect all events that occurred in connection with such proceedings.
(rr) All instruments, records, agreements and other
documents requested in Xxxxxx & Xxxxxxx LLP's document request letter
dated April 15, 2003 have been provided to, or made available for
inspection by, Xxxxxx & Xxxxxxx LLP.
(ss) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
(tt) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under
the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's principal executive
officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have been
evaluated for effectiveness as of a date within 90 days prior to the
date of the Company's most recent annual or quarterly report; and (iii)
are effective in all material respects to perform the functions for
which they were established.
(uu) Based on the evaluation of its disclosure controls
and procedures, the Company is not aware of (i) any significant
deficiency in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize
and report financial data or any material weaknesses in internal
controls; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company's internal controls.
11
(vv) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(ww) The Exchange Act Reports, when they were or are filed
with the Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
(yy) The amendment to the Company's amended and restated
credit agreement (the "Credit Agreement"), dated as of December 31, 2002, among
the Company, Rent-A-Center East, Inc., the banks and other financial
institutions party thereto from time to time, Comerica, N.A. as the
documentation agent, NationsBank, N.A. as syndication agent, and JPMorgan Chase
Bank, as administrative agent (the "Bank Document") has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or at
law).
2. Purchase and Resale of the Securities.
(a) On the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions set forth
herein, the Company and the Guarantors, jointly and severally, agree to issue
and sell to each of the Initial Purchasers and each of the Initial Purchasers,
severally and not jointly, agrees to purchase from the Company, the principal
amount of Securities set forth opposite the name of such Initial Purchaser on
Schedule 1 hereto at a purchase price equal to 97.875% of the principal amount
thereof. The Company and the Guarantors shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that
they propose to offer the Securities for resale upon the terms and subject to
the conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that (i)
it is a Qualified Institutional Buyer with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the Securities; (ii) it is purchasing the
Securities pursuant to a private sale exempt from registration under the
Securities Act, (iii) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act and (iv) in connection with the
Exempt Resales, it has solicited and will solicit offers for the Securities only
from, and has offered or sold and will offer, sell or deliver the Securities, as
part of their initial offering, only to Eligible Purchasers in accordance with
this Agreement and on the terms contemplated by the Offering Memorandum.
(c) In connection with the offer and sale of Securities
in reliance on Regulation S, each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) the 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.
12
persons except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of
the Securities Act;
(ii) such Initial Purchaser has offered and sold
the Securities, and will offer and sell the Securities, (A) as
part of their distribution at any time and (B) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the Closing Date, only in accordance with
Regulation S or Rule 144A or any other available exemption
from registration under the Securities Act;
(iii) neither of such Initial Purchaser nor any of
its affiliates nor any other person acting on its or their
behalf has engaged or will engage in any directed selling
efforts with respect to the Securities, and all such persons
have complied and will comply with the offering restrictions
requirement of Regulation S;
(iv) at or prior to the confirmation of sale of
any Securities sold in reliance on Regulation S, such Initial
Purchaser will have sent to each distributor, dealer or other
person receiving a selling concession, fee or other
remuneration that purchases 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, 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 Securities and
the date of original issuance of the Securities,
except in accordance with Regulation S or Rule 144A
or any other available exemption from registration
under the Securities Act. Terms used above have the
meanings given to them by Regulation S."; and
(v) such Initial Purchaser has not and will not
enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except
with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly,
represents and agrees that (i) it has not offered or sold and, prior to the date
six months after the date of issuance of the Securities, will not offer or sell
any Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (as amended); (ii) it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act
2000) received by it in connection with the issue or sale of any Securities in
circumstances in which Section 21(1) of the Financial Services and Markets Xxx
0000 does not apply to the Company; and (iii) it has complied and will comply
with all applicable provisions of the Financial Services and Markets Xxx 0000
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.
13
(e) Each Initial Purchaser acknowledges and agrees that
the Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(d) and (e), counsel for the Company and for
the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers and their compliance
with their agreements contained in this Section 2, and each Initial Purchaser
hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial
Purchasers may sell Securities to any affiliate of an Initial Purchaser and that
any such affiliate may sell Securities purchased by such affiliate to an Initial
Purchaser.
3. Delivery of and Payment for the Securities.
(a) Delivery of and payment for the Securities shall be
made at the offices of Xxxxxx & Xxxxxxx LLP, New York, New York, or at such
other place as shall be agreed upon by the Initial Purchasers and the Company,
at 9:00 A.M., New York City time, on the Closing Date or at such other time or
date, not later than seven full business days thereafter, as shall be agreed
upon by the Initial Purchasers and the Company.
(b) The Securities will be delivered to the Initial
Purchasers, or the Trustee as custodian for The Depository Trust Company
("DTC"), against payment by or on behalf of the Initial Purchasers of the
purchase price therefor by wire transfer in immediately available funds, by
causing DTC to credit the Securities to the account of the Initial Purchasers at
DTC. The Securities will be evidenced by one or more global securities in
definitive form (the "Global Notes") or by additional definitive securities, and
will be registered, in the case of the Global Notes, in the name of Cede & Co.
as nominee of DTC, and in the other cases, in such names and in such
denominations as the Initial Purchasers shall request prior to 9:30 A.M., New
York City time, on the second business day preceding the Closing Date. The
Securities to be delivered to the Initial Purchasers shall be made available to
the Initial Purchasers in New York City for inspection and packaging not later
than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date.
4. Further Agreements of the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, agree with each
of the Initial Purchasers as follows:
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; to advise
the Initial Purchasers promptly of any order preventing or suspending
the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance
of any such order preventing or suspending the use of the Offering
Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers
and counsel for the Initial Purchasers, without charge, as many copies
of the Offering Memorandum (and any amendments or supplements thereto)
as they may reasonably request;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial
Purchasers and counsel for the Initial Purchasers and
14
not to effect any such amendment or supplement to which the Initial
Purchasers shall reasonably object by notice to the Company after a
reasonable period to review;
(d) if, at any time prior to completion of the resale of
the Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Company, to amend
or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for a three-year period ending on the third
anniversary of the Closing Date, to furnish to the Initial Purchasers
copies of any annual reports, quarterly reports and current reports
filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by
the Company to the Trustee or to the holders of the Securities pursuant
to the Indenture or the Exchange Act or any rule or regulation of the
Commission thereunder;
(g) to promptly take from time to time such actions as
the Initial Purchasers may reasonably request to qualify the Securities
for offering and sale under the securities or Blue Sky laws of such
jurisdictions in the United States as the Initial Purchasers may
reasonably designate and to continue such qualifications in effect for
so long as required for the resale of the Securities; and to arrange
for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial
Purchasers may reasonably request; provided that the Company and its
subsidiaries will not be required to qualify generally to do business
in any jurisdiction where they are not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject;
(h) to assist the Initial Purchasers in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through DTC;
(i) not to, and to cause its affiliates not to, sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as such term is defined in the Securities Act)
which could be integrated with the sale of the Securities in a manner
which would require registration of the Securities under the Securities
Act;
15
(j) except following the effectiveness of the Exchange
Offer Registration Statement or the Shelf Registration Statement, as
the case may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities 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 or 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; and not to offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any Securities under
circumstances where such offer, sale, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act to
cease to be applicable to the offering and sale of the Securities as
contemplated by this Agreement and the Offering Memorandum;
(k) from the date hereof and until the earlier of (i) 90
days after the date of the Offering Memorandum or (ii) the consummation
of the Exchange Offer, not to offer for sale, sell, contract to sell or
otherwise dispose of, directly or indirectly, or file a registration
statement for, or announce any offer, sale, contract for sale of or
other disposition of any debt securities issued or guaranteed by the
Company or any Guarantor (other than as contemplated by the
Registration Rights Agreement) without the prior written consent of
Xxxxxx Brothers Inc.
(l) during the period from the Closing Date until two
years after the Closing Date, without the prior written consent of the
Initial Purchasers, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are
outstanding, be or become, or be or become owned by, 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, and to not be or become, or be or become owned
by, a closed-end investment company required to be registered, but not
registered thereunder;
(n) in connection with the offering of the Securities,
until Xxxxxx Brothers Inc. on behalf of the Initial Purchasers shall
have notified the Company of the completion of the distribution of the
Securities, not to, and to cause its affiliated purchasers (as defined
in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest,
any Securities, or attempt to induce any person to purchase any
Securities; and not to, and to cause its affiliated purchasers not to,
make bids or purchase for the purpose of creating actual, or apparent
active trading in or of raising the price of the Securities;
(o) to furnish to each of the Initial Purchasers on the
date hereof a copy of the independent accountants' report incorporated
by reference in the Offering Memorandum signed by the accountants
rendering such report;
(p) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its reasonable best efforts to
satisfy all conditions precedent on its part to the delivery of the
Securities;
(q) prior to the Closing Date, not to issue any press
release or other communication directly or indirectly or hold any press
conference with respect to the Company or any Guarantor,
16
its condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in
the ordinary course of business and consistent with the past practices
of the Company and of which the Initial Purchasers are notified),
without prior consultation with the Initial Purchasers, unless in the
judgment of the Company or such Guarantor and their respective counsel,
and after notification to the Initial Purchasers, such press release or
communication is required by law;
(r) to apply the net proceeds from the sale of the
Securities as set forth in the Offering Memorandum under the heading
"Use of Proceeds;" and
(s) The Company and the Guarantors agree to comply with
all the terms and conditions of the Registration Rights Agreement and
all agreements set forth in the representation letter of the Company
and the Guarantors to DTC relating to the approval of the Securities by
DTC for "book entry" transfer.
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and the Guarantors contained
herein, to the accuracy of the statements of the Company, and the Guarantors and
their respective officers made in any certificates delivered pursuant hereto, to
the performance by the Company and the Guarantors of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to
the Initial Purchasers as promptly as practicable on or following the
date of this Agreement or at such other date and time as to which the
Initial Purchasers may agree; and no stop order suspending the sale of
the Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) None of the Initial Purchasers shall have discovered
and disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the written advice of counsel for
the Initial Purchasers, is material or omits to state any fact which,
in the written advice of such counsel (a copy of which shall be
supplied to the Company), is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other matters required
for due authorization and validity of each of the Transaction Documents
and the transactions contemplated thereby and the Offering Memorandum
shall be satisfactory in all material respects to the Initial
Purchasers, and the Company and the Guarantors shall have furnished to
the Initial Purchasers copies of such documents and information that
they or their counsel may reasonably request to enable them to pass
upon such matters.
(d) Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. shall have furnished
to the Initial Purchasers their written opinion, as counsel to the
Company and the Guarantors addressed to the Initial Purchasers and
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, substantially to the effect set forth in
Annex B hereto.
(e) The Initial Purchasers shall have received from
Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchasers, such opinion
or opinions, dated the Closing Date, with respect to such matters as
the Initial Purchasers may reasonably require, and the Company and the
Guarantors
17
shall have furnished to such counsel such documents and information as
they request for the purpose of enabling them to pass upon such
matters.
(f) At the time of execution of this Agreement, the
Initial Purchasers shall have received from Xxxxx Xxxxxxxx LLP a
letter, in form and substance satisfactory to the Initial Purchasers,
addressed to the Initial Purchasers and dated the date hereof (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission and (ii) stating, as of the
date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more
than three business days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and
(iii) covering such other matters as are ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(g) With respect to the letter of Xxxxx Xxxxxxxx LLP
referred to in the preceding paragraph and delivered to the Initial
Purchasers concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the Initial
Purchasers a letter (the "bring-down letter") of such accountants,
addressed to the Initial Purchasers and dated the Closing Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the
Closing Date (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more
than three business days prior to the date of the Closing Date), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(h) The Company and each of the Guarantors shall have
furnished to the Initial Purchasers a certificate, dated the Closing
Date, of their respective chief executive officers and chief financial
officers or such other persons who possess similar authority or perform
similar functions, solely in their capacity as officers and not in
their individual capacity, stating that (A) such persons have examined
the Offering Memorandum, (B) in their opinion, the Offering Memorandum,
as of its date, did not include any untrue statement of a material fact
and did not omit to state a 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, and since
the date of the Offering Memorandum, no event has occurred which should
have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or
supplemented) would not include any untrue statement of a material fact
and would not omit to state a 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
and (C) to such officer's knowledge after reasonable due inquiry, as of
the Closing Date, the representations and warranties of the Company and
each of the Guarantors, as the case may be, in this Agreement are true
and correct, the Company and each of the Guarantors, as the case may
be, has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder on or prior to the
Closing Date in all material respects, and subsequent to the date of
the most recent financial statements contained in the Offering
Memorandum, there has been no material adverse change in the financial
position or results of operations of the Company, the Guarantors and
their respective subsidiaries taken as a whole, or any change, or any
development including a prospective change, in or affecting the
condition
18
(financial or otherwise), results of operations, business or prospects
of the Company, the Guarantors and their respective subsidiaries taken
as a whole that would, or could reasonably be expected to, result in a
Material Adverse Effect, except as set forth in the Offering
Memorandum. Such persons may also state that (i) they participated in
the preparation of the Offering Memorandum, and (ii) they are generally
familiar with the operations and business of the respective
corporations of which they were officers or directors, have made such
inquiries as they deemed appropriate in connection with making this
certificate and have conferred amongst themselves in its preparation.
(i) The Initial Purchasers shall have received a
counterpart of the Registration Rights Agreement which shall have been
executed and delivered by a duly authorized officer of the Company and
each of the Guarantors.
(j) The Indenture shall have been duly executed and
delivered by the Company, the Guarantors and the Trustee, and the
Securities shall have been duly executed and delivered by the Company
and the Guarantors and duly authenticated by the Trustee.
(k) The Securities shall have been approved by the NASD
for trading in the PORTAL Market.
(l) If any event shall have occurred that requires the
Company under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(m) There shall not have occurred any invalidation of
Rule 144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which, in the case of a proposed
withdrawal, in the written advice of counsel to the Initial Purchasers,
a copy of which will be delivered to the Company, is reasonably likely
to occur and would materially impair the ability of the Initial
Purchasers to purchase, hold or effect resales of the Securities as
contemplated hereby.
(n) The Company, the Guarantors and their respective
subsidiaries (taken as a whole) shall not have sustained, since the
date of the latest audited financial statements included in the
Offering Memorandum (exclusive of any amendment or supplement thereto
on or after the date of this Agreement), 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, otherwise
than as set forth or contemplated in the Offering Memorandum; and,
since such date, there shall not have been any change in the
stockholders' equity or long-term debt of the Company, the Guarantors
and their respective subsidiaries (taken as a whole) or material
adverse change, or any development involving a prospective material
adverse change, in or affecting the management, condition, financial or
otherwise, stockholders' equity, results of operations, business or
prospects of the Company, the Guarantors and their respective
subsidiaries, taken as a whole.
(o) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or
19
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded
the Securities or any of the Company's or any Guarantor's other debt
securities or preferred stock by any "nationally recognized statistical
rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) of the rules and regulations of the
Commission under the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible
upgrading), its rating of the Securities or any of the Company's or any
Guarantor's other debt securities or preferred stock.
(q) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange, the
Nasdaq National Market or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, has been suspended or
minimum prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction; (ii) a material
disruption in securities settlement, payment or clearance services in
the United States; (iii) a banking moratorium has been declared by
Federal or state authorities; (iv) 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, crisis or emergency if, in the judgment of
Xxxxxx Brothers Inc., the effect of any such attack, outbreak,
escalation, act, declaration, calamity, crisis or emergency makes it
impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Securities; or (v) the occurrence of any
other calamity, crisis (including without limitation as a result of
terrorist activities), or material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such)
as to make it, in the judgment of Xxxxxx Brothers Inc., impracticable
or inadvisable to proceed with offering or delivery of the Securities
being delivered on the Closing Date or that, in the judgment of Xxxxxx
Brothers Inc., would materially and adversely affect the financial
markets or the markets for the Securities and other debt securities.
(r) The Initial Purchasers shall have received copies of
the documentation evidencing the Bank Document, certified by the
secretary of the Company as being true, complete and correct.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial
Purchasers hereunder may be terminated by the Initial Purchasers, in their
absolute discretion, by notice given to and received by the Company prior to
delivery of and payment for the Securities if, prior to that time, any of the
events described in Section 5(m), (n), (o), (p) or (q) shall have occurred.
7. Defaulting Initial Purchasers
(a) If, on the Closing Date, any Initial Purchaser
defaults in the performance of its obligations under this Agreement, the
non-defaulting Initial Purchasers may make arrangements for the purchase of the
Securities which such defaulting Initial Purchaser agreed but failed to purchase
by other
20
persons satisfactory to the Company and the non-defaulting Initial Purchasers,
but if no such arrangements are made within 48 hours after such default, this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers, the Company or the Guarantors, except that the Company and
the Guarantors will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 12 and except that the provisions of Sections
9 and 10 shall not terminate and shall remain in effect. As used in this
Agreement, the term "Initial Purchasers" includes, for all purposes of this
Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto that, pursuant to this Section 7, purchases Securities which a
defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Company, the Guarantors or
any non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a)
this Agreement shall have been terminated pursuant to Section 6 or 7, (b) the
Company shall fail to tender the Securities for delivery to the Initial
Purchasers for any reason or (c) the Initial Purchasers shall decline to
purchase the Securities for any reason permitted under this Agreement, the
Company shall reimburse the Initial Purchasers for such out-of-pocket expenses
(including reasonable fees and disbursements of counsel) as shall have been
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase and resale of the Securities. If this Agreement is
terminated pursuant to Section 7 by reason of the default of one or more of the
Initial Purchasers, the Company shall not be obligated to reimburse any
defaulting Initial Purchaser on account of such expenses.
9. Indemnification
(a) The Company and each Guarantor, hereby agree, jointly
and severally, to indemnify and hold harmless each Initial Purchaser, its
directors, officers and employees and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Securities), to which that Initial
Purchaser, director, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto, (B) in any Blue Sky application or other document prepared or executed
by the Company or any Guarantor (or based upon any written information furnished
by the Company or any Guarantor) specifically for the purpose of qualifying any
or all of the Securities under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application") or (C) in any materials or information provided
to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Securities ("Marketing Materials"), including
any roadshow or investor presentations made to investors by the Company (whether
in person or electronically), or (ii) the omission or alleged omission to state
in the Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application or in any
Marketing Materials, any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were
21
made, not misleading, and shall reimburse each Initial Purchaser and each such
director, officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Initial Purchaser, director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Offering Memorandum or the Offering Memorandum, or in
any such amendment or supplement thereto, or in any Blue Sky Application or in
any Marketing Materials, in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company through
the Initial Purchasers by or on behalf of any Initial Purchaser specifically for
inclusion therein; provided, however, that the Company shall not be liable to
any Initial Purchaser under the indemnity agreement in this Section 9 to the
extent, but only to the extent, that (A) such loss, claim, damage, or liability
of such Initial Purchaser results from an untrue statement of a material fact or
an omission of a material fact contained in the Preliminary Offering Memorandum,
which untrue statement or omission was completely corrected in the Offering
Memorandum dated the date hereof (the "Final Offering Memorandum"), (B) the
Company sustains the burden of proving that such Initial Purchaser sold
Securities to the person alleging such loss, claim, liability, expense or damage
without sending or giving, at or prior to written confirmation of such sale, a
copy of the Final Offering Memorandum (excluding the Incorporated Documents),
(C) the Company had previously furnished sufficient quantities of the Final
Offering Memorandum to such Initial Purchaser within a reasonable amount of time
prior to such sale or such confirmation, and (D) such Initial Purchaser failed
to deliver the Final Offering Memorandum, if required by law to have so
delivered it, and such delivery would have been a complete defense against the
person asserting such loss, claim, liability, expense or damage. The foregoing
indemnity agreement is in addition to any liability that the Company or the
Guarantors may otherwise have to any Initial Purchaser or to any director,
officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly,
hereby agrees to indemnify and hold harmless the Company, each Guarantor, their
respective officers and employees, each of their respective directors, and each
person, if any, who controls the Company or any Guarantor within the meaning of
the Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company, any
Guarantor or any such director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
the Preliminary Offering Memorandum or the Offering Memorandum or in any
amendment or supplement thereto or (B) in any Blue Sky Application, or (ii) the
omission or alleged omission to state in the Preliminary Offering Memorandum or
the Offering Memorandum, or in any amendment or supplement thereto, or in any
Blue Sky Application, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company by or on
behalf of that Initial Purchaser specifically for inclusion therein, and shall
reimburse the Company, any Guarantor and any such director, officer, employee or
controlling person for any legal or other expenses reasonably incurred by the
Company, any Guarantor or any such director, officer, employee or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability that
any Initial Purchaser may otherwise have to the Company, any Guarantor or any
such director, officer, employee or controlling person.
22
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 9 except to the extent it has been
materially prejudiced 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 this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and those Initial Purchasers and their respective
directors, officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Initial Purchasers against the Company or any Guarantor under this
Section 9 if, in the reasonable judgment of the Initial Purchasers (based upon
written advise of counsel, a copy of which shall be delivered to the
indemnifying party), it is advisable for the Initial Purchasers and those
directors, officers, employees and controlling persons to be jointly represented
by separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company or any Guarantor. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) The Initial Purchasers severally confirm and the
Company and the Guarantors acknowledge that the statements with respect to the
offering of the Securities by the Initial Purchasers set forth in the second
full paragraph on page iii of the Offering Memorandum and in the last sentence
of the third paragraph and in the fifth, sixth and eighth paragraphs in the
section entitled "Plan of Distribution" in the Offering Memorandum are correct
and constitute the only information concerning such Initial Purchasers furnished
in writing to the Company or any Guarantor by or on behalf of the Initial
Purchasers specifically for inclusion in the Offering Memorandum.
10. Contribution. If the indemnification provided for in
Section 9 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 9(a) or 9(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the 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
23
also the relative fault of the Company and the Guarantors, on the one hand, and
the Initial Purchasers on the other with respect to the statements or omissions
that resulted in such loss, claim, damage or liability, or action in respect
thereof, 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 Purchasers on the other with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Company and the Guarantors on the one hand, and the total discounts and
commissions received by the Initial Purchasers with respect to the Securities
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Securities under this Agreement as set forth
on the cover page of the Offering Memorandum. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Guarantors or the Initial
Purchasers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
For purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of the
Guarantors and information supplied by the Company shall also be deemed to have
been supplied by the Guarantors. The Company, the Guarantors, and the Initial
Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities initially purchased by it were
offered to the Eligible Purchasers exceeds the amount of any damages that such
Initial Purchaser has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 10 are several in
proportion to their respective underwriting obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers, the Company, the Guarantors and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except as provided in Sections 9 and 10 with respect to
directors, officers, employees and controlling persons of the Company, the
Guarantors and the Initial Purchasers and in Section 4(e) with respect to
holders and prospective purchasers of the Securities. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
12. Expenses. Each of the Company and the Guarantors
agrees with the Initial Purchasers to pay (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and distribution of the Preliminary Offering Memorandum, the Offering
Memorandum (including, without limitation, the Annual Report on Form 10-K for
the year ended December 31, 2002 and any financial statements and exhibits) and
any amendments or supplements thereto; (c) the costs of reproducing and
distributing each of the Transaction Documents and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection therewith and with the Exempt Resales; (d) the costs incident to the
preparation, printing and delivery of the certificates evidencing the
Securities,
24
including stamp duties and transfer taxes, if any, payable upon issuance of the
Securities; (e) the fees and expenses of the Company's counsel and their
independent accountants; (f) the fees and expenses of qualifying the Securities
under the securities laws of the several jurisdictions as provided in Section
4(g) and of preparing, printing and distributing Blue Sky Memoranda (including
related fees and expenses of counsel for the Initial Purchasers); (g) the
furnishing of such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the Exempt Resales; (h) any fees
charged by rating agencies for rating the Securities; (i) the fees and expenses
of the Trustee and any paying agent (including related fees and expenses of any
counsel to such parties); (j) all expenses and application fees incurred in
connection with the application for the inclusion of the Securities on the
PORTAL Market and the approval of the Securities for book-entry transfer by DTC;
and (k) all other costs and expenses incident to the performance of the
obligations of the Company and the Guarantors under this Agreement which are not
otherwise specifically provided for in this Section 12; provided, however, that
except as provided in this Section 12 and Section 8, the Initial Purchasers
shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, the
Guarantors and the Initial Purchasers contained in this Agreement or made by or
on behalf of the Company, the Guarantors or the Initial Purchasers pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any of them or any of their respective
affiliates, officers, directors, employees, representatives, agents or
controlling persons, until such time as the applicable statute of limitations
has expired.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or
sent by mail or telecopy transmission to Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X. Xxxxxxxx
(telecopier no.: (000) 000-0000), with a copy to Xxxxxx & Xxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
X. Xxxxxxxxx, XX (telecopier no.: (000) 000-0000), and with a copy, in
the case of any notice pursuant to Section 9(c), to the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; or
(b) if to the Company or the Guarantors, shall be
delivered or sent by mail or telecopy transmission to the address of
the Company set forth in the Offering Memorandum, Attention: Xxxxxx X.
Xxxxx, Chief Financial Officer (telecopier no.: (000) 000-0000), with a
copy to Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., 0000 Xxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X.X. Xxxxx (telecopier no: (214)
745-5311).
Any such statements, requests, notices or agreements shall take effect at the
time delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery. The
Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Initial Purchasers by Xxxxxx Brothers
Inc.
15. Definition of Terms. For purposes of this Agreement,
(a) the term "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act and (c) except where
25
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one
or more counterparts (which may include counterparts delivered by telecopier)
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
18. Amendments. No amendment or waiver of any provision
of this 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 hereto.
19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
26
EXECUTION COPY
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the parties hereto in
accordance with its terms.
Very truly yours,
RENT-A-CENTER, INC.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
Chairman of the Board, Director and
Chief Executive Officer
RENT-A-CENTER EAST, INC.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
President
COLORTYME, INC.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
Vice President
RENT-A-CENTER WEST, INC.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
President
GET IT NOW, LLC
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
President
RENT-A-CENTER TEXAS, L.P.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
RENT-A-CENTER TEXAS, L.L.C.
By: /s/ XXXXX XXXXXXXX
---------------------------------------
Xxxxx Xxxxxxxx
President
Accepted:
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
UBS WARBURG LLC
WACHOVIA SECURITIES, INC.
By: XXXXXX BROTHERS INC.,
as Authorized Representative
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Xxxxxxx X. Xxxxxxxx
Managing Director
