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Exhibit 4.2
EXECUTION COPY
AAI.FOSTERGRANT, INC.
$75,000,000
10 3/4% SENIOR NOTES DUE 2006
PURCHASE AGREEMENT
July 16, 1998
NationsBanc Xxxxxxxxxx Securities LLC
Prudential Securities Incorporated
BancBoston Securities Inc.
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
AAi.FosterGrant, Inc., a Rhode Island corporation (the "Company"), proposes
to issue and sell to you (the "Initial Purchasers") $75,000,000 in aggregate
principal amount of its 10 3/4% Senior Notes due 2006 (the "Notes"). The Notes
will be fully and unconditionally guaranteed (the "Subsidiary Guarantees" and,
collectively with the Notes, the "Securities") on a senior unsecured basis,
jointly and severally, by each domestic subsidiary of the Company listed on the
signature page hereto (the "Subsidiary Guarantors" and, together with the
Company, the "Issuers"). The Securities are to be issued pursuant to an
indenture, dated as of July 21, 1998 (the "Indenture"), by and among the
Company, the Subsidiary Guarantors and IBJ Xxxxxxxx Bank & Trust Company, as
Trustee (the "Trustee").
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. You have advised the Issuers that you will
offer and sell the Securities purchased by you hereunder in accordance with
Section 3 hereof as soon as you deem advisable.
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In connection with the sale of the Securities, the Issuers have prepared a
preliminary offering memorandum, dated June 24, 1998 (the "Preliminary
Memorandum") and a final offering memorandum, dated July 16, 1998 (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Issuers and the Securities. The Issuers
hereby confirm that they have authorized the use of the Preliminary Memorandum
and the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial Purchasers. Unless
stated to the contrary, all references herein to the Final Memorandum are to the
Final Memorandum at the time of execution and delivery of this Agreement (the
"Execution Time") and are not meant to include any amendment or supplement
subsequent to the Execution Time.
The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of the Registration Rights Agreement, substantially in
the form attached hereto as EXHIBIT A (the "Registration Rights Agreement"),
pursuant to which the Issuers will agree to use their best efforts to commence
an offer to exchange (the "Exchange Offer") the Securities for Exchange
Securities (the "Exchange Securities") that have been registered under the
Securities Act, and that otherwise are identical in all respects to the
Securities, or to cause a shelf registration statement to become effective under
the Securities Act and to remain effective for the period designated in such
Registration Rights Agreement.
1. REPRESENTATIONS AND WARRANTIES. All representations and warranties of the
Company and its subsidiaries are made on the date hereof.
The Company and the Subsidiary Guarantors, jointly and severally, represent
and warrant to the Initial Purchasers that (it being understood that
representations made on the date hereof as to parties other than the Company and
its subsidiaries as of such date shall be made to the best knowledge of the
Issuers and the Subsidiary Guarantors):
(a) The Preliminary Memorandum, at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Final Memorandum, at the date hereof, does
not, and at the Closing Date will not (and any amendment or supplement thereto,
at the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however that the Issuers make no
representation or warranty as to the information relating to the Initial
Purchasers contained in or omitted from the Preliminary Memorandum or the Final
Memorandum, or any amendment or supplement thereto, in reliance upon and in
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conformity with information furnished in writing to the Issuers by or on behalf
of the Initial Purchasers specifically for inclusion therein. No stop order
preventing the use of the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act, has been issued.
(b) Neither the Issuers, nor any of their "Affiliates" (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), nor any
person acting on their behalf has, directly or indirectly, made offers or sales
of any security, or solicited offers to buy any security, under circumstances
that would require the registration of the Securities under the Securities Act.
Neither the Issuers, nor any of their Affiliates, nor any person acting on their
behalf has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of the
Securities, provided, that the Issuers make no representation in this sentence
regarding the Initial Purchasers. The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act. The Final Memorandum
and each amendment or supplement thereto, as of its date, contains the
information specified in Rule 144A(d)(4) under the Act. The Issuers have been
advised by the National Association of Securities Dealers, Inc. ("NASD") Private
Offerings, Resales and Trading through the Automated Linkages Market ("PORTAL")
that the Securities have been designated PORTAL eligible securities in
accordance with the rules and regulations of the NASD.
(c) None of the Issuers nor any of their respective Affiliates or any
person acting on its or their behalf (other than the Initial Purchasers, as to
whom the Issuers make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S") with respect to the Securities. The Securities offered and
sold in reliance on Regulation S have been and will be offered and sold only in
offshore transactions. The sale of the Securities pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of the
Securities Act. No registration under the Securities Act of the Securities is
required for the sale of the Securities to the Initial Purchasers as
contemplated hereby or for the Exempt Resales (as defined below) assuming the
accuracy of, and compliance with, the Initial Purchasers' representations,
warranties and agreements set forth in Section 3 of this Agreement. The
Securities sold pursuant to Regulation S will initially be represented by a
temporary global security as required by Rule 903 of Regulation S.
(d) Neither the Company nor any of its subsidiaries is, or will be after
giving effect to the offering and sale of the Securities and the application of
the proceeds therefrom as
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described in the Final Memorandum, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(e) Assuming (i) that the representations and warranties and covenants of
the Initial Purchasers contained in Section 3 hereof are true and correct and
(ii) that the Initial Purchasers comply with their agreements contained in
Section 3 hereof, (A) registration under the Securities Act of the Securities or
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), is not required in connection with the offer and
sale of the Securities to the Initial Purchasers in the manner contemplated by
the Final Memorandum or this Agreement and (B) initial resales of the Securities
by the Initial Purchasers on the terms and in the manner set forth in the Final
Memorandum and Section 3 hereof are exempt from the registration requirements of
the Securities Act.
(f) Since the respective dates as of which information is given in the
Preliminary Memorandum and the Final Memorandum, except as otherwise stated
therein, (i) there has been no material adverse change in the condition
(financial or otherwise), results of operations, affairs or business prospects
of the Company and its subsidiaries considered as a whole, whether or not
arising in the ordinary course of business and (ii) there have been no material
transactions entered into by the Company or any of its subsidiaries
(collectively, a "Material Adverse Change").
(g) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Rhode Island with corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Preliminary Memorandum and the Final Memorandum; and the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), results of operations, affairs or business prospects
of the Company and its subsidiaries considered as a whole (a "Material Adverse
Effect").
(h) All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable.
(i) Except as set forth in the Final Memorandum and except for rights or
options held by the Company to acquire capital stock or other equity interests
of subsidiaries, there are not currently, and will not be as a result of the
Offering, any outstanding subscriptions,
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rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or other
equity interest of the Company or any subsidiary.
(j) Attached as SCHEDULE A hereto is a complete and accurate list of each
subsidiary of the Company. Each of the subsidiaries of the Company has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its organization, has the requisite power and authority to own,
lease and operate its properties and conduct its business as described in the
Preliminary Memorandum and the Final Memorandum and is duly qualified as a
foreign organization to transact business and is in good standing in each
jurisdiction in which the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All of the issued and outstanding capital stock of each
subsidiary of the Company owned by the Company has been duly authorized and
validly issued and is fully paid and nonassessable, and, except as described in
the Preliminary Memorandum and the Final Memorandum or pursuant to the Senior
Credit Facility (as defined in the Final Memorandum), all shares of capital
stock of each such subsidiary which are owned by the Issuers, directly or
through subsidiaries, are free and clear of any mortgage, pledge, lien,
encumbrance, claim or equity.
(k) Each of the Issuers has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the Registration Rights Agreement, the Indenture and the Senior Credit Facility
to which it is a party and to consummate the transactions contemplated hereby
and thereby, including, without limitation, the corporate power and authority to
issue, sell and deliver the Securities as provided herein.
(l) This Agreement has been duly authorized, executed and delivered by each
of the Issuers and constitutes the valid and binding agreement of each of the
Issuers, enforceable against each of the Issuers in accordance with its terms,
except that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions thereof may be
limited under applicable securities laws or the public policies underlying such
laws.
(m) The Notes have been duly authorized by the Company, and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with this
Agreement, will constitute the valid
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and binding obligations of the Company enforceable against the Company in
accordance with their terms, and will be entitled to the benefits, of the
Indenture, except that enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(n) The Subsidiary Guarantees endorsed on the Notes have been duly
authorized by each Subsidiary Guarantor and when the Notes are executed and
authenticated in accordance with the provisions of the Indenture and delivered
to the Initial Purchasers in accordance with this Agreement, the Subsidiary
Guarantees will constitute the valid and binding obligation of each of the
Subsidiary Guarantors enforceable against each of the Subsidiary Guarantors in
accordance with their terms and will be entitled to the benefits of the
Indenture except that enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(o) The Indenture has been duly authorized by each of the Issuers. When the
Securities are delivered and paid for pursuant to this Agreement on the Closing
Date, the Indenture will have been duly executed and delivered by each of the
Issuers and, assuming the due execution and delivery thereof by the Trustee,
will constitute a valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms, except
that enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(p) The Exchange Securities have been duly authorized by each of the
Issuers and, when duly executed, authenticated, issued and delivered, will be
validly issued and outstanding, and will constitute the valid and binding
obligations of each of the Issuers, entitled to the benefits of the Indenture
and enforceable against each of the Issuers in accordance with their terms
except that enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
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(q) The Registration Rights Agreement has been duly authorized by each of
the Issuers and, when duly executed and delivered by each of the Issuers
(assuming the due execution and delivery by the Initial Purchasers), will
constitute a valid and binding agreement of each of the Issuers, enforceable
against each of the Issuers in accordance with its terms except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(r) On the Closing Date, the Senior Credit Facility and the guarantee of
the obligations thereunder by the Subsidiary Guarantors (a) shall have been duly
authorized, executed and delivered by the Company and each Subsidiary Guarantor
and will constitute the valid and binding agreement of the Company and each
Subsidiary Guarantor, enforceable against the Company and each Subsidiary
Guarantor, as applicable, in accordance with their terms except that (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or public policies; and (b) shall be in full force
and effect. On the Closing Date, no event of default or event which, with the
giving of notice or passage of time or both, would constitute an event of
default shall have occurred under the Senior Credit Facility or the guarantees
thereof by the Subsidiary Guarantors and all conditions to the extension of
credit thereunder still have been satisfied without waiver.
(s) The industry and market-related data included in the Final Memorandum
are based on or derived from sources which the Company believes to be reliable
and accurate in all material respects.
(t) Neither the Company nor any of its subsidiaries is in breach or
violation of any of the terms or provisions of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of them or their
property is or may be bound or to which any of the properties or assets of the
Company or any of its subsidiaries are subject, nor is the Company or any of its
subsidiaries in violation of the provisions of its respective charter, by-laws
or other organizational documents or any statute or any judgment, order, rule or
regulation of any court or
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governmental agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their properties or assets (except to the extent any such
conflict, breach, violation or default is cured at or prior to the Closing Date
and within the grace period applicable thereto or would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect). To the
best knowledge of the Issuers, there exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under (i) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries are subject,
except for such defaults which would not, singly or in the aggregate, have a
Material Adverse Effect or (ii) the respective charter, by-laws or other
organizational documents of the Company or any of its subsidiaries.
(u) The execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement and the Senior Credit Facility by
the Issuers (to the extent each is a party thereto), and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities) does not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which any of them or their property is or may be bound or to which
any of the properties or assets of the Company or any of its subsidiaries are
subject, nor will such actions result in any violation of the provisions of the
charter, by-laws or other organizational documents of the Company or any of its
subsidiaries or any statute to which they may be subject or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets
(except to the extent any such conflict, breach, violation or default singly or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect); and except for such consents, approvals, authorizations, orders,
filings or registrations as may be required under applicable state securities
and Blue Sky laws in connection with the purchase and distribution of the
Securities by the Initial Purchasers or as set forth in the Registration Rights
Agreement, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement, the Indenture, the
Registration Rights Agreement and the Senior Credit Facility by the Issuers (to
the extent each is a party thereto), the consummation of the transactions
contemplated hereby and thereby, and the issuance and sale of the Securities and
Exchange Securities by the Issuers, except such as have been or will be obtained
and made on or prior to the Closing Date or such the failure to obtain would
not, singly or in the aggregate, have a Material Adverse Effect.
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(v) As of the Closing Date, the Securities and the Indenture will conform
in all material respects to the descriptions thereof contained in the Final
Memorandum. As of the Closing Date, the provisions of the Registration Rights
Agreement and the Senior Credit Facility, to the extent that such provisions are
summarized in the Final Memorandum, will conform in all material respects to the
descriptions thereof contained in the Final Memorandum.
(w) Except as set forth in the Preliminary Memorandum and the Final
Memorandum, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Issuers, threatened against or affecting the Company or any of
its subsidiaries, which would reasonably be expected to result in a Material
Adverse Change or, singly or in the aggregate, would reasonably be expected to
have a Material Adverse Effect or materially and adversely affect the offering
of the Securities.
(x) The Company and each of its subsidiaries has good and marketable title
to all real property and all personal property owned by it and used in the
conduct of the business of the Company or such subsidiary, in each case free and
clear of all liens, encumbrances and defects except as are described in the
Preliminary Memorandum and Final Memorandum or do not materially and adversely
affect the value of such property to the Company or such subsidiary, and do not
interfere with the use made and proposed to be made of such property by the
Company or such subsidiary to an extent that such interference would, singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect. All
leases to which the Company or any of its subsidiaries is a party material to
the business of the Company and its subsidiaries, taken as a whole, and
described in the Final Memorandum are in full force and effect, and to the
knowledge of the Issuers no default has occurred or is continuing thereunder
which could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the offering of the
Securities, and the Company and its subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any of them is a party as lessee (with
such exceptions as do not materially interfere with the use made by the Company
or such subsidiary). The Company and its subsidiaries possess adequate
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
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(y) Each of the accountants who have certified or will certify the
financial statements of the Company and its subsidiaries included in the Final
Memorandum are independent public accountants within the meaning of the
Securities Act and the rules and regulations thereunder. The financial
statements included in the Preliminary Memorandum and the Final Memorandum
present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries, on a consolidated basis, and Xxxxxx Xxxxx
Group L.P. as at the dates indicated and the results of their respective
operations and the changes in their consolidated financial position for the
periods specified subject, in the case of interim period financial statements,
to normal year-end adjustments; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis during the periods involved, except as indicated therein and except, in
the case of interim period financial statements, for the absence of certain
footnotes required by such accounting principles, and comply as to form in all
material respects with the requirements applicable to such financial statements
included in registration statements on Form S-1 under the Securities Act. The
Company and each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with 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.
The pro forma financial statements included in the Preliminary Memorandum
and the Final Memorandum have been prepared on a basis consistent with the
historical financial statements of (i) the Company and its subsidiaries, (ii)
Fantasma. LLC ("Fantasma") , (iii) Superior Jewelry Company ("Superior") and
(iv) Eyecare Products UK Ltd. ("Xxxxxx Xxxxx UK") and give effect to assumptions
used in the preparation thereof on a reasonable basis and in good faith and
present fairly the historical and proposed transactions contemplated by the
Preliminary Memorandum and the Final Memorandum; and such pro forma financial
statements comply as to form in all material respects with the requirements
applicable to pro forma financial statements included in registration statements
on Form S-1 under the Act. The other pro forma financial and statistical
information and data included in the Preliminary Memorandum and the Final
Memorandum are, in all material respects, accurately presented and prepared on a
basis consistent with the pro forma financial statements.
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The historical and pro forma financial statements included in the
Preliminary Memorandum and the Final Memorandum constitute all of the financial
statements that would be required to be included in a registration statement on
Form S-1 under the Securities Act.
(z) Neither the Company nor any of its subsidiaries is now or, after giving
effect to the issuance of the Securities and the application of the proceeds
thereof, will be (i) insolvent, (ii) left with unreasonably small capital with
which to engage in its anticipated businesses or (iii) incurring debts beyond
its ability to pay such debts as they become due.
(aa) Except as would not reasonably be expected to have a Material Adverse
Effect, the Company and its subsidiaries own, or otherwise possess the right to
use, all patents, trademarks, service marks, trade names and copyrights, all
applications and registrations for each of the foregoing, and all other
proprietary rights and confidential information used in the conduct of their
respective businesses as currently conducted; and neither the Company nor any of
its subsidiaries has received any notice or is otherwise aware, of any
infringement of or conflict with the rights of any third party with respect to
any of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect.
(bb) The Company and its subsidiaries are (i) in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(cc) There is (i) no significant unfair labor practice complaint pending
against the Company or any of its subsidiaries nor, to the best knowledge of the
Issuers, threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the best knowledge of the
Issuers, threatened against any of them, (ii) no significant strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
subsidiaries nor, to the best knowledge of the Issuers, threatened against
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the Company or any of its subsidiaries and (iii) to the best knowledge of the
Issuers, no union representation question existing with respect to the employees
of the Company or any of its subsidiaries. To the best knowledge of the Issuers,
no collective bargaining organizing activities are taking place with respect to
the Company or any of its subsidiaries. None of the Company or any of its
subsidiaries has violated (i) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees, (ii) any
applicable wage or hour laws or (iii) any provision of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or the rules and regulations
thereunder, except those violations that could not reasonably be expected to
have a Material Adverse Effect.
(dd) The Company has filed all material tax returns required to be filed by
the Company or any of its subsidiaries in all jurisdictions and paid all taxes
shown due thereon, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without penalty or interest. To
the knowledge of the Issuers, there are no material proposed additional tax
assessments against the Company or any of its subsidiaries, or the assets or
property of the Company or any of its subsidiaries, except those tax assessments
for which adequate reserves have been established.
(ee) Each of the Company and its subsidiaries maintains or is entitled to
the benefits of insurance covering its properties, operations, personnel and
businesses, insuring against such losses and risks as are consistent with
industry practice. None of the Company or any of its subsidiaries has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance.
(ff) The Company has (i) initiated a review and assessment of all areas
within its and each of its subsidiaries' business and operations (including
those affected by suppliers, vendors and customers) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company or any of its subsidiaries (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Based on the foregoing, the Company believes
that all computer applications (including those of its suppliers, vendors and
customers) that are material to its or any of its subsidiaries' business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and
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after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.
(gg) Neither the Company nor any of its subsidiaries, nor, to any Issuers'
knowledge, any director, officer, agent, employee, shareholder or other person,
in any such case, acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds during the last five years for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, payoff, influence payment, kickback or other payment
that is unlawful.
(hh) The execution and delivery of this Agreement, the Registration Rights
Agreement, the Indenture and the Senior Credit Facility and the sale of the
Securities to be purchased by Eligible Purchasers will not involve any
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986. The representation made by the
Company in the preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the representations and covenants made or
deemed made by Eligible Purchasers as set forth in the Final Memorandum under
the caption "Notice to Investors."
(ii) Neither the Company nor any of its subsidiaries has taken, and none of
them will take, any action that would cause this Agreement or the issuance or
sale of the Securities and Exchange Securities to violate Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(jj) The Company and its subsidiaries have complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with persons or Affiliates located
in Cuba.
(kk) Other than as set forth on SCHEDULE B hereto, neither the Company nor
any subsidiary is a party to any contract or agreement that would be required to
be filed with the SEC (as defined below) as an exhibit to a registration
statement on Form S-1 pursuant to entries (2), (4) and (10) of the Exhibit Table
of Item 601 of Regulation S-K under the Securities Act.
(ll) Neither the Company nor any subsidiary is a "public utility" or a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended (the "Public Utility Holding Company Act").
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2. PURCHASE AND SALE. On the basis of the representations and warranties
contained in, and subject to the terms and conditions of, this Agreement, the
Issuers agree to sell to each of the Initial Purchasers and each of the Initial
Purchasers agrees to purchase the aggregate principal amount of Securities set
forth opposite its name as shown in SCHEDULE C hereto, at a purchase price equal
to 97% of the principal amount thereof.
The Issuers shall not be obligated to deliver any of the Securities to be
delivered except upon payment for all the Securities to be purchased as provided
herein.
3. SALE AND RESALE OF THE SECURITIES BY THE INITIAL PURCHASER. Each of the
Initial Purchasers represents and warrants to the Issuers that:
(a) It is a qualified institutional buyer ("QIB") as defined in Rule 144A
under the Securities Act, as such may be amended from time to time ("Rule 144A")
and it will offer the Securities to be purchased hereunder for resale only upon
the terms and conditions set forth in this Agreement and in the Final
Memorandum.
(b) It (i) 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 Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act, and (ii) will solicit offers for
the Securities only from, and will offer, sell or deliver (the "Exempt Resales")
the Securities, as part of its initial offering, only to the following persons
(each an "Eligible Purchaser") (A) persons whom such Initial Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and (B) persons outside the United States
in offshore transactions in reliance on and in compliance with Regulation S.
(c) With respect to Securities sold in reliance on Regulation S, (i)
neither such Initial Purchaser nor any of its Affiliates nor anyone acting on
its behalf has offered or sold, or will offer or sell, any Securities by means
of any directed selling efforts (as defined in Rule 902 of Regulation S) in the
United States and any such persons has complied and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering and (ii) at or prior to confirmation of all sales of Securities made in
reliance on Regulation S, it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
the Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
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"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of a distribution thereof at any time or (ii) otherwise
until 40 days after the later of the date of the commencement of the
offering and the closing date, except in either case in accordance with an
exemption from or in a transaction not subject to the Securities Act. Terms
used above have the meanings given them by Regulation S."
The sale of the Securities to non-U.S. persons in offshore transactions is not
part of a plan or scheme to avoid the registration requirements of the
Securities Act.
(d) (i) It has not solicited, and will not solicit, offers to purchase any
of the Securities from, (ii) it has not sold, and will not sell, any of the
Securities to, and (iii) it has not distributed, and will not distribute, the
Preliminary Memorandum or the Final Memorandum to, any person or entity in any
jurisdiction outside of the United States except, in each case, in compliance in
all material respects with all applicable laws of such jurisdiction. For
purposes of this Agreement, "United States" means the United States of America,
its territories, its possessions (including the Commonwealth of Puerto Rico),
and other areas subject to its jurisdiction.
(e) Unless prohibited by applicable law, (i) it will furnish to each person
to whom it offers any Securities, a copy of the Preliminary Memorandum (as
amended or supplemented) or Final Memorandum or (unless delivery of such
Preliminary Memorandum is required by applicable law) shall inform each such
person that a copy of such Preliminary Memorandum or the Final Memorandum will
be available upon request and (ii) it will furnish to each person to whom it
sells Securities a copy of the Final Memorandum (as then amended or supplemented
by applicable law) and shall inform each such person that a copy of such Final
Memorandum will be available upon request.
(f) It will comply in all material respects with the advice contained in
the Blue Sky Memorandum related to the state securities laws.
4. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of and payment for the
Securities shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx at 9:00 A.M., New York City time, on July 21, 1998, or at
such other date or place as shall be determined by agreement between the Initial
Purchasers and the Company. This date and time are sometimes referred to as the
"Closing Date." On the Closing Date, the Issuers shall
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deliver or cause to be delivered the Securities to the Initial Purchasers for
the account of the Initial Purchasers against payment to or upon the order of
the Company of the purchase price by wire transfer in federal (same-day) funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of the
Initial Purchasers hereunder. Upon delivery, the Securities shall be in
definitive fully registered form and registered in the name of Cede & Co., as
nominee of the Depository Trust Company ("DTC"), or such other name or names and
in such denominations as the Initial Purchasers shall request in writing not
less than one business day prior to the Closing Date. For the purpose of
expediting the checking and packaging of the Securities, the Issuers shall make
the Securities available for inspection by the Initial Purchasers in New York,
New York, not later than 2:00 P.M., New York City time, on the business day
prior to the Closing Date.
5. FURTHER AGREEMENTS OF THE ISSUERS. The Issuers jointly and severally
agree with each Initial Purchaser as set forth below in this Section 5:
(a) The Issuers will furnish to the Initial Purchasers, and those persons
identified by the Initial Purchasers to the Issuers, without charge, as many
copies of the Preliminary Memorandum and the Final Memorandum and any
supplements and amendments thereto as they may reasonably request.
(b) Prior to making any amendment or supplement to the Preliminary
Memorandum or the Final Memorandum, the Issuers shall furnish a copy thereof to
the Initial Purchasers and counsel to the Initial Purchasers and will not 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.
The Issuers consent to the use of the Preliminary Memorandum and the Final
Memorandum, and any amendments and supplements thereto required pursuant hereto,
by the Initial Purchaser in connection with Exempt Resales.
(c) If, at any time prior to completion of the distribution 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 Issuers, to amend or supplement the Final
Memorandum in order that the Final 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 not misleading in light of the circumstances
existing at the time it is delivered to an Eligible Purchaser, or if it is
necessary to amend or supplement the Final Memorandum to comply with applicable
law, the Issuers will (i) notify the Initial Purchasers, (ii) promptly prepare
such amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Final Memorandum, as so amended or
supplemented, will comply with applicable
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law and (iii) furnish to the Initial Purchasers such number of copies of such
amendment or supplement as they may reasonably request.
(d) So long as any Securities are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act and
during any period in which the Issuers are not subject to Section 13 or 15(d) of
the Exchange Act of 1934, as amended (the "Exchange Act"), the Issuers will
furnish to holders of the Securities and prospective purchasers of Securities
designated by such holders, upon request of such holders or such prospective
purchasers, the information, if any, required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
(e) So long as the Securities and Exchange Securities are outstanding, the
Issuers will furnish to the Initial Purchasers copies of any annual reports,
quarterly reports and current reports filed with the Securities and Exchange
Commission ("SEC") on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the SEC, and such other documents, reports and information
as shall be furnished by the Issuers to the Trustee or to the holders of the
Securities and Exchange Securities pursuant to the Indenture.
(f) The Issuers will use their best efforts to qualify the Securities for
sale under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers reasonably designate and to continue such qualifications in effect so
long as reasonably required for the distribution of the Securities. The Issuers
will also arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
reasonably request. Notwithstanding the foregoing, the Issuers shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which they
are not so qualified or to file a general consent to service of process or to
subject themselves to taxation in respect of doing business in any jurisdiction
in which they are not otherwise subject.
(g) The Issuers will use their best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the PORTAL market and to permit the
Securities to be eligible for clearance and settlement through DTC.
(h) Except following the effectiveness of any Registration Statement (as
defined in the Registration Rights Agreement) and except for such offers as may
be made as a result of, or subsequent to, filing such Registration Statement or
amendments thereto prior to the effectiveness thereof, the Issuers will not, and
will cause their Affiliates not to, solicit any offer to buy or offer to sell
the Securities by means of any form of general solicitation or general
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advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(i) The Company will apply the net proceeds from the sale of the Securities
as set forth in the Final Memorandum under "Use of Proceeds."
(j) The Issuers will take such steps as shall be necessary to ensure that
neither the Company nor any of its subsidiaries shall become (i) an "investment
company" within the meaning of the Investment Company Act or (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act.
(k) The Company and its subsidiaries will not, and will cause their
Affiliates not to, take any action that would require the registration under the
Securities Act of the Securities (other than pursuant to the Registration Rights
Agreement) including, without limitation, (i) engaging in any directed selling
efforts (within the meaning of Regulation S) during any applicable restricted
period or (ii) offering any other securities in a manner that would be
integrated with the transactions contemplated hereby.
(l) Prior to the consummation of the Exchange Offer or the effectiveness of
an applicable shelf registration statement if, in the reasonable judgment of the
Initial Purchasers, the Initial Purchasers or any of their Affiliates are
required to deliver an offering memorandum in connection with sales of, or
market-making activities with respect to, the Securities, (A) the Issuers will
periodically amend or supplement the Final Memorandum so that the information
contained in the Final Memorandum complies with the requirements of Rule 144A of
the Securities Act, (B) the Issuers will amend or supplement the Final
Memorandum when necessary to reflect any material changes in the information
provided therein so that the Final Memorandum will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances existing as
of the date the Final Memorandum is so delivered, not misleading and (C) the
Issuers will provide the Initial Purchasers with copies of each such amended or
supplemented Final Memorandum, as the Initial Purchasers may reasonably request.
The Issuers hereby expressly acknowledge that the indemnification and
contribution provisions of Section 8 hereof are specifically applicable and
relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(l).
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(m) Not to voluntarily claim, and to resist actively any attempts to claim,
the benefit of any usury laws against the holders of any Securities.
(n) To cause the Exchange Offer to be made in the appropriate form to
permit registered Exchange Securities to be offered in exchange for the
Securities and to comply with all applicable federal and state securities laws
in connection with the Exchange Offer.
(o) To comply with all of their agreements set forth in the Registration
Rights Agreement and all agreements set forth in the representation letters of
the Issuers to DTC relating to the approval of the Notes by DTC for "book-entry"
transfer.
(p) The Issuers will do all things reasonably necessary to satisfy the
closing conditions set forth in Section 7 hereof.
6. EXPENSES. The Issuers, jointly and severally, agree to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Securities and
Exchange Securities and any issue or stamp taxes payable in that connection; (b)
the costs incident to the preparation and printing of the Preliminary
Memorandum, the Final Memorandum and any amendments, supplements and exhibits
thereto; (c) the costs of distributing the Preliminary Memorandum, the Final
Memorandum and any amendment or supplement thereto; (d) the fees and expenses of
qualifying the Securities and Exchange Securities under the securities laws of
the several jurisdictions as provided in Section 5(f) and of preparing, printing
and distributing a Blue Sky Memorandum (including reasonable related fees and
expenses of counsel to the Initial Purchasers, which will be $5,000); (e) the
cost of printing the Securities and the Exchange Securities; (f) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of any counsel for the Trustee in connection with the Indenture
and the Securities and Exchange Securities; (g) any fees paid to rating agencies
in connection with the rating of the Securities and Exchange Securities; (h) the
costs and expenses of DTC and its nominee, including its book-entry system; (i)
all expenses and listing fees incurred in connection with the application for
quotation of the Securities on the PORTAL market; and (j) all other costs and
expenses incident to the performance of the obligations of the Issuers under
this Agreement.
7. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of the
Initial Purchasers to purchase the Securities shall be subject to the
satisfaction of the following conditions:
(a) The representations and warranties on the part of the Issuers contained
herein at the Execution Time and the Closing Date and the statements of the
Issuers made in any
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certificates pursuant to the provisions hereof shall be accurate, and the
Issuers shall have performed all of their obligations hereunder in all material
respects.
(b) The Initial Purchasers shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Final Memorandum or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, is material
or omits to state a fact which, in the opinion of such counsel, is material and
is necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) The Final Memorandum shall have been printed and copies distributed to
the Initial Purchasers as soon as practicable but in no event later than on the
Business Day following the date of this Agreement or at such later date and time
as to which the Initial Purchasers may agree, and no stop order suspending the
qualification or exemption from qualification of the Securities in any
jurisdiction referred to in Section 5(f) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(d) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Securities; no
action, suit or proceeding shall have been commenced and be pending against or
affecting or, to the knowledge of the Company, threatened against, the Company
or any of its subsidiaries before any court or arbitrator or any governmental
body, agency or official that, singly or in the aggregate, if adversely
determined, would reasonably be expected to result in a Material Adverse Effect;
and no stop order shall have been issued by the SEC or any governmental agency
of any jurisdiction referred to in Section 5(f) preventing the use of the Final
Memorandum, or any amendment or supplement thereto, or which would reasonably be
expected to have a Material Adverse Effect.
(e) Since the dates as of which information is given in the Final
Memorandum and other than as set forth in the Final Memorandum, (i) there shall
not have been any Material Adverse Change, or any development that is reasonably
likely to result in a Material Adverse Change, or any material change in the
long-term debt, or material increase in the short-term debt, from that set forth
in the Final Memorandum; (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital stock;
(iii) the Company and its subsidiaries shall not have incurred any liabilities
or obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes
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thereto in accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the Final
Memorandum.
(f) The Initial Purchasers shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by (i) Xxxxxx X. Xxxxx, Chairman,
and (ii) Xxxxx X. XxXxxxx, Chief Financial Officer, confirming that (A) such
officers have participated in conferences with other officers and
representatives of the Issuers, representatives of the independent public
accountants of the Issuers and representatives of counsel to the Issuers at
which the contents of the Final Memorandum and related matters were discussed
and (B) the matters set forth in paragraphs (a), (c) (d) and (e) of this Section
7 are true and correct as of the Closing Date.
(g) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities, the Exchange
Securities, the Indenture, the Registration Rights Agreement, the Final
Memorandum, the Senior Credit Facility and all other legal matters relating to
this Agreement and the transactions contemplated hereby and thereby, shall be
reasonably satisfactory in all material respects to counsel for the Initial
Purchasers, and the Issuers shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(h) Xxxxxxxx, Xxxxx & Xxxxxx, counsel for the Issuers, shall have furnished
to the Initial Purchasers its written opinion (containing customary limitations
and approvals that shall be reasonably satisfactory in all material respects to
the Initial Purchasers' counsel), addressed to the Initial Purchasers and dated
the Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, to the effect that:
(i) The Company and each Subsidiary Guarantor is validly existing and
in good standing under the laws of its jurisdiction of organization. The Company
and each of the Subsidiary Guarantors is duly qualified to do business and in
good standing as foreign organization in each U.S. jurisdiction with respect to
which it has certified to us that they own property, maintain business or have
employees (except where failure to so qualify would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect).
(ii) Assuming, (A) the accuracy of and compliance with the
representations, warranties and covenants of the Issuers set forth in Section 1
of this Agreement, (B) the accuracy of and compliance with the Initial
Purchasers' representations, warranties and covenants set forth in Section 3 of
this Agreement, (C) the accuracy of the representations and warranties of each
of the purchasers to whom the Initial Purchasers initially resell the
Securities,
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as specified under the caption "Notice to Investors" in the Preliminary
Memorandum and the Final Memorandum, (D) the compliance by the Initial
Purchasers with the offering and transfer procedures and restrictions described
in the Final Memorandum and (E) if required by applicable law, receipt by the
purchasers to whom the Initial Purchasers initially resell the Securities of a
copy of the Final Memorandum prior to such sale, it is not necessary in
connection with the offer, issuance, sale and delivery of the Securities to the
Initial Purchasers, and the initial reoffer, resale and delivery of the
Securities by the Initial Purchasers, as contemplated by this Agreement and the
Final Memorandum, to register the Securities under the Securities Act, or to
qualify the Indenture under the Trust Indenture Act, it being understood that no
opinion is expressed as to any subsequent resale of Securities or any resale of
Securities by any person other than the Initial Purchasers.
(iii) Each of the Company and the Subsidiary Guarantors has the
corporate power and authority to execute and deliver, and to consummate the
transactions contemplated by, this Agreement, the Registration Rights Agreement,
the Indenture and the Senior Credit Facility; the Company has the corporate
power and authority to issue and deliver the Notes as contemplated by this
Agreement; and the Subsidiary Guarantors have the corporate power and authority
to issue and deliver the Subsidiary Guarantees as contemplated by this
Agreement.
(iv) The execution and delivery of this Agreement have been duly
authorized by all requisite corporate action of the Company and each Subsidiary
Guarantor, and this Agreement has been duly executed and delivered by the
Company and each Subsidiary Guarantor.
(v) The execution and delivery of the Indenture have been duly
authorized by all requisite corporate action of the Company and each Subsidiary
Guarantor; and the Indenture has been duly executed and delivered by the Company
and each Subsidiary Guarantor, and assuming due authorization, execution and
delivery by the Trustee, is a valid and binding agreement of the Company and
each Subsidiary Guarantor, enforceable against the Company and each Subsidiary
Guarantor in accordance with its terms, except that enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and the exercise of discretionary authority of any court before which a
proceeding may be brought.
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(vi) The execution and delivery of the Securities have been duly
authorized by all requisite corporate action of the Company and each of the
Subsidiary Guarantors; the Notes have been duly executed by the Company and the
Subsidiary Guarantees have been duly executed by each of the Subsidiary
Guarantors and assuming due authentication by the Trustee, when delivered by the
Company and the Subsidiary Guarantors and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Notes and the Subsidiary
Guarantees will be valid and binding obligations of the Company and each of the
Subsidiary Guarantors respectively, entitled to the benefits of the Indenture,
enforceable against the Company and each of the Subsidiary Guarantors in
accordance with their terms, except that enforcement thereof may be subject to
(A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
the exercise of discretionary authority of any court before which a proceeding
may be brought.
(vii) The execution and delivery of the Exchange Securities have been
duly authorized by all requisite corporate action of the Company and each of the
Subsidiary Guarantors.
(viii) The execution and delivery of the Registration Rights Agreement
have been duly authorized by all requisite corporate action of the Company and
each of the Subsidiary Guarantors; the Registration Rights Agreement has been
duly executed and delivered by the Company and each of the Subsidiary Guarantors
and, assuming due authorization, execution and delivery by the Initial
Purchasers, the Registration Rights Agreement is a valid and binding agreement
of the Company and each of the Subsidiary Guarantors enforceable against the
Company and each of the Subsidiary Guarantors in accordance with its terms,
except that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and the
exercise of discretionary authority of any court before which a proceeding may
be brought and (ii) the validity and enforceability of any indemnification or
contribution provisions thereof may be limited under applicable securities laws
or public policies.
(ix) The execution and delivery of the Senior Credit Facility have
been duly authorized by all requisite corporate action of the Company and each
of the Subsidiary Guarantors; the Senior Credit Facility has been duly executed
and delivered by the Company and each of the Subsidiary Guarantors and, assuming
due authorization, execution and
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delivery by the other parties thereto, the Senior Credit Facility is a valid and
binding agreement of the Company and each of the Subsidiary Guarantors
enforceable against the Company and each of the Subsidiary Guarantors in
accordance with its terms, except that enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
the exercise of discretionary authority of any court before which a proceeding
may be brought.
(x) The execution and delivery by the Company and each of the
Subsidiary Guarantors of this Agreement, the Indenture, the Registration Rights
Agreement and the Senior Credit Facility, the consummation by the Company and
the Subsidiary Guarantors of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Securities and the
Exchange Securities) and by the Final Memorandum will not (A) to the knowledge
of such counsel, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument set forth on
Schedule B except any breach or violation or default which would not, singly or
in the aggregate, have a Material Adverse Effect or (B) result in any violation
of the provisions of the (1) charter, bylaws or other organizational documents
of the Company or any of its subsidiaries, (2) to the knowledge of such counsel,
any applicable law, rule or regulation (other than Securities Laws (as defined
below) as to which an opinion is given in paragraph (ii) above) with respect to
the Company or any of its subsidiaries or (3) to the knowledge of such counsel,
any rule or regulation (other than Securities Laws (as defined below) as to
which an opinion is given in paragraph (ii) above) or order of any court or
governmental agency having jurisdiction over the Company or any of its
subsidiaries except, in the case of (2) and (3), a violation which would not,
singly or in the aggregate, have a Material Adverse Effect; and, to the
knowledge of such counsel, except for such consents, approvals or authorizations
of, or filings, registrations or qualifications with, governmental authorities
as may be required under the Securities Act and the rules and regulations
thereunder, the Trust Indenture Act and the rules and regulations thereunder or
applicable states securities or Blue Sky laws, rules or regulations (all of such
laws, rules and regulations are collectively referred to herein as "Securities
Laws") in connection with the purchase and distribution of the Securities by the
Initial Purchasers and as set forth in, and in order to consummate the
transactions contemplated by, the Registration Rights Agreement, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required in connection with the
execution and delivery by the Company and the Subsidiary Guarantors of this
Agreement, the Indenture, the Registration Rights Agreement or the Senior Credit
Facility, the
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consummation by the Company and the Subsidiary Guarantors of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
sale of the Securities and Exchange Securities) by the Company and the
Subsidiary Guarantors, except such as have been obtained and made or have been
disclosed in the Final Memorandum or such the failure to obtain would not,
singly or in the aggregate, have a Material Adverse Effect.
(xi) The descriptions in the Final Memorandum of the Indenture, the
Securities, the Registration Rights Agreement and the Senior Credit Facility are
accurate summaries of such documents in all material respects. The statements
under the captions "Business -- Intellectual Property and Licenses,"
"Description of Notes" and "Plan of Distribution" in the Final Memorandum, to
the extent they constitute a summary of the legal matters, documents or
proceedings referred to therein, have been reviewed by such counsel and fairly
present in all material respects such legal matters, documents and proceedings.
(xii) Trademarks of the Company and its subsidiaries which are
registered in the United States and/or Canada in the name of the Company or its
subsidiaries are set forth in Exhibit 1, a copy of which is attached hereto and
incorporated herein by reference. To the knowledge of such counsel, neither the
Company nor any of its subsidiaries has received any notice of any infringement
of or claim of any conflict with the rights of any third party with respect to
any of such registered trademarks which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect on the Company.
(xiii) To such counsel's knowledge, no legal or governmental
proceedings are pending to which the Company or any of its subsidiaries is a
party that would be required under the Securities Act to be described in a
registration statement on Form S-1 or a prospectus contained therein delivered
at the time of the confirmation of the sale of an offering of securities
registered under the Securities Act that are not described in the Final
Memorandum, or, to such counsel's knowledge, that seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of the
Securities to the Initial Purchasers or the consummation of the transactions
described in the Final Memorandum under the caption "Use of Proceeds."
(xiv) Neither the Company nor any of its subsidiaries is (i) subject
to registration and regulation as an "investment company" within the meaning of
the Investment Company Act, or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act.
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(xv) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as securities of the Company or any of
its subsidiaries that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted on an automated inter-dealer
quotation system.
(xvi) Assuming the Initial Purchasers purchase the Securities in
accordance with Rule 144A under the Securities Act, neither the issuance or sale
of the Securities nor the application by the Company of the net proceeds thereof
as set forth in the Final Memorandum will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
(xvii) To the best of such counsel's knowledge, no stop order
preventing the use of the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act, has been issued.
In rendering such opinion, such counsel may state that its opinion (i) as
to the laws of the State of New York is made in reliance on the opinion of
Xxxxxx & Xxxxxxx and (ii) is otherwise limited to matters governed by the
Federal laws of the United States of America, the laws of the State of Rhode
Island, the laws of the Commonwealth of Massachusetts and the General
Corporation Law of the State of Delaware.
In addition, such counsel shall also state that such counsel has
participated in conferences with officers and representatives of the Issuers,
representatives of the independent public accountants for the Issuers and the
Initial Purchasers and its counsel at which the contents of the Final Memorandum
and related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Final Memorandum, and has not made
any independent check or verification thereof, on the basis of the foregoing, no
facts have come to the attention of such counsel that lead such counsel to
believe that the Final Memorandum, as of its date or the Closing Date, contained
an untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which there were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements or other financial data included therein).
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(i) The Initial Purchasers shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(j) The Issuers and the Trustee shall have entered into the Indenture and
the Initial Purchasers shall have received counterparts, conformed as executed,
thereof.
(k) The Issuers and the Initial Purchasers shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(l) Prior to or concurrently with the issue and sale of the Securities, the
Issuers shall have entered into the Senior Credit Facility (the form and
substance of which shall be reasonably acceptable to the Initial Purchasers) and
the Initial Purchasers shall have received counterparts, conformed as executed,
thereof and of all other documents and agreements entered into in connection
therewith. There shall exist at and as of the Closing Date no conditions that
would constitute a default (or an event that with notice or the lapse of time,
or both, would constitute a default) under the Senior Credit Facility. On the
Closing Date, the Senior Credit Facility shall be in full force and effect and
shall not have been modified except as contemplated by the Final Memorandum.
(m) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx LLP,
independent accountants for the Company, and Price Waterhouse LLP, independent
accountants for Xxxxxx Xxxxx Group L.P., shall have each furnished to the
Initial Purchasers customary comfort letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, confirming that they are independent
accountants within the meaning of the Securities Act and the Exchange Act and
the applicable rules and regulations thereunder and Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants
(the "AICPA"), with respect to the financial statements and certain financial
information of the Company and its subsidiaries, and Xxxxxx Xxxxx Group L.P.
(n) (i) None of the Company or any of its subsidiaries shall have sustained
since the date of the latest financial statements included in the Final
Memorandum losses or interferences with their businesses, taken as a whole, 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 Final Memorandum and (ii)
since such date there shall not have been any change in the capital stock or
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long-term debt of the Company or any of its subsidiaries, other than immaterial
changes in short-term borrowings to finance working capital in the ordinary
course of business, or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company or its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Final Memorandum, the effect of which, in any such case described in clause
(i) or (ii), is, in the reasonable judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed with
the offering or the delivery of the Securities being delivered on the Closing
Date on the terms and in the manner contemplated herein and in the Final
Memorandum.
(o) 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 or The NASDAQ Stock Market's National Market or in
the over-the-counter market shall have been suspended or materially limited, or
minimum prices shall have been established on such exchange by the SEC, or by
such exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a 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 reasonable judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Securities being delivered on the Closing Date on the terms and
in the manner contemplated herein and in the Final Memorandum.
(p) As of the Closing Date, no "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) will have imposed (or will have informed the Company or any
Subsidiary Guarantor that it is considering imposing) any condition (financial
or otherwise) on the Company's or any Subsidiary Guarantor's retaining any
rating assigned to the Company or any Subsidiary Guarantor, any securities of
the Company or any Subsidiary Guarantor or (ii) will have indicated to the
Company or any Subsidiary Guarantor that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned or (b)
any change in the outlook for any rating of the Company, any Subsidiary
Guarantor or any securities of the Company or any Subsidiary Guarantor.
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(q) Prior to or concurrently with the issue and sale of the Securities, the
amendment to the relative powers, preferences and rights and the qualifications,
limitations and restrictions thereof, granted to or imposed on the Company's
Series A Redeemable Convertible Preferred Stock as set forth on Exhibit 2 hereto
(the "Amendment") shall have been duly and validly approved by the shareholders
of the Company and the Initial Purchasers shall have received evidence
reasonably satisfactory to the Initial Purchasers and their legal counsel of the
filing of the Amendment with the Rhode Island Secretary of State and its
effectiveness.
(r) Xxxxxx & Xxxxxxx shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(s) Prior to the Closing Date, the Issuers shall have furnished to the
Initial Purchasers such further information, certificates and documents as the
Initial Purchasers may reasonably request.
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.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuers jointly and severally agree to indemnify and hold harmless
the Initial Purchasers, the directors, officers, employees and agents
(including, without limitation, attorneys) of the Initial Purchasers and each
person who controls any Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum or any
information provided by the Issuers to any holder or prospective purchaser of
the Securities pursuant to Section 5(e), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agree to reimburse each such
indemnified party, as
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incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action: provided, however, that the Issuers will not be liable in
any such case to any Initial Purchaser to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission relating
to such Initial Purchaser made in the Preliminary Memorandum or the Final
Memorandum, or in any amendment thereof or supplement thereto, in reliance upon
and in conformity with written information furnished to the Issuers by or on
behalf of such Initial Purchaser specifically for inclusion therein; provided
that the indemnification contained in this paragraph (a) with respect to the
Preliminary Memorandum shall not inure to the benefit of the Initial Purchasers
(or to the benefit of any person controlling the Initial Purchasers) on account
of any such loss, claim, damage, liability or expense arising from the sale of
the Securities by the Initial Purchasers to any person if a copy of the Final
Memorandum (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) shall not have been delivered or sent to
such person and each untrue statement of a material fact contained in, and each
omission or alleged omission of a material fact from, such Preliminary
Memorandum was corrected in the Final Memorandum (as so amended or supplemented)
and it shall have been determined that any Initial Purchaser and each person, if
any, who controls such Initial Purchasers would not have incurred such losses,
claims, damages, liabilities and expenses had the Final Memorandum been
delivered or sent.
(b) Each Initial Purchaser agrees severally and not jointly to indemnify
and hold harmless the Issuers, their directors, officers, employees and agents
(including, without limitation, attorneys), and each person who controls the
Issuers within the meaning of either the Securities Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Issuers to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Issuers by or on behalf of the Initial
Purchaser specifically for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto). This indemnity agreement
will be in addition to any liability which any Initial Purchaser may otherwise
have. The Issuers and the Initial Purchasers acknowledge that the statements set
forth in the last paragraph of the cover page, the statements that the Initial
Purchasers intend to make a market in the Notes, the statement preceding the
caption "Note Regarding Forward-Looking Statements" regarding transactions that
stabilize the price of the Notes and the statements under the headings "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or any amendment or supplement thereto).
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(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would, in the opinion of legal counsel to the indemnified party, present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been informed in
writing by legal counsel that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for (i) all
Initial Purchasers and all persons, if any, who control any Initial Purchaser
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and (ii) all Issuers, their directors and officers and each
person, if any, who controls any Issuer within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Initial Purchasers and
such control persons of the Initial Purchasers, such firm shall be designated in
writing by NationsBanc Xxxxxxxxxx Securities LLC. An indemnifying party will
not, without
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the prior written consent of the indemnified parties, 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.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Issuers, on the one hand, and the Initial Purchasers,
on the other hand, agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Issuers and one or more of the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers, on the one hand, and by such Initial Purchaser, on the other hand,
from the offering of the Securities; provided, however, that in no case shall
any Initial Purchaser be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by the such
Initial Purchaser hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Issuers and the Initial
Purchasers shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Issuers, on the
one hand, and of such Initial Purchaser, on the other hand, in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) of the Securities, and benefits received by any Initial Purchaser
shall be deemed to be equal to the total purchase discounts and commissions
received by such Initial Purchaser from the Issuers in connection with the
purchase of the Securities hereunder. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Issuers or the Initial Purchasers. The Issuers and
the Initial Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation that does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each partner, director, officer, employee
and agent of an Initial Purchaser shall have the same rights to contribution as
such Initial Purchaser, and each person who controls the
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Issuers within the meaning of either the Securities Act or the Exchange Act and
each director, officer, employee and agent of the Issuers shall have the same
rights to contribution as the Issuers, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. TERMINATION. The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers 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 Sections 7(o) or 7(p) shall have occurred
or if the Initial Purchasers shall decline to purchase the Securities for any
reason permitted under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If (a) the Issuers shall
fail to tender the Securities for delivery to the Initial Purchasers otherwise
than for any reason permitted under this Agreement or (b) the Initial Purchasers
shall decline to purchase the Securities for any reason permitted under this
Agreement (except the occurrence of any of the events described in Section 7(o)
hereof), the Issuers shall reimburse the Initial Purchasers for the reasonable
fees and expenses of their counsel and for such other reasonable out-of-pocket
expenses as shall have been incurred by them in connection with this Agreement
and the proposed purchase of the Securities, and upon demand the Issuers shall
pay the full amount thereof to the Initial Purchasers.
11. 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, telex
or facsimile transmission to NationsBanc Xxxxxxxxxx Securities LLC, 000 Xxxxx
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx
Xxxxxx, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxx X. Xxxxxxxxx;
(b) if to the Issuers, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Final
Memorandum, Attention: Xxxxx X. XxXxxxx, with a copy to Xxxxxxxx, Xxxxx &
Xxxxxx, 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000-0000, Attention:
Xxxxxxx X. Xxxxxxxx.
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof. The Issuers shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the Initial
Purchasers.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
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the benefit of and be binding upon the Initial Purchasers, the Issuers and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that the representations,
warranties, indemnities and agreements of the Issuers contained in this
Agreement shall also be deemed to be for the benefit of directors, officers,
employees and agents (including, without limitation, attorneys) of the Initial
Purchasers and the person or persons, if any, who control an Initial Purchasers
within the meaning of Section 15 of the Securities Act and the representations,
warranties, indemnities and agreements of the Initial Purchasers contained
herein shall also be deemed to be for the benefit of directors, officers,
employees and agents (including without limitation, attorneys) of the Issuers
and the person or persons who control any of the Issuers within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 12, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Issuers and the Initial Purchasers contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
14. DEFINITION OF "BUSINESS DAY." For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York or The City
of Charlotte, North Carolina are authorized or obligated by law, executive order
or regulation to close.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts 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.
17. 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.
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[Signature page follows]
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If the foregoing correctly sets forth the agreement between the Issuers and
the Initial Purchasers, please indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
AAI.FOSTERGRANT, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
GUARANTORS:
XXXXXX XXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
THE XXXXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
OPTI-RAY, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX GENERAL, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
37
XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
O-RAY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
F.G.G. INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX XXXXX GROUP, L.P.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
FANTASMA, LLC
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
38
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ J. Xxxxx Xxxxxx
-----------------------------
Name: J. Xxxxx Xxxxxx
Title: Principal
PRUDENTIAL SECURITIES INCORPORATED
By:
-----------------------------
Name:
Title:
BANCBOSTON SECURITIES INC.
By:
-----------------------------
Name:
Title:
39
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
-----------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxx X'Xxxxx
----------------------------
Name: Xxxxxxx X'Xxxxx
Title: Director
BANCBOSTON SECURITIES INC.
By:
----------------------------
Name:
Title:
40
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
-----------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------
Name:
Title:
BANCBOSTON SECURITIES INC.
By: /s/ Xxxxxxx X. Xxx
----------------------------
Name: Xxxxxxx X. Xxx
Title: Managing Director
41
EXHIBIT A
Amendment
42
1. "SECTION 6.6 - SUSPENSION OF REDEMPTION OBLIGATION. Notwithstanding any
provision of this Section 6 to the contrary, if at any time the Corporation
shall have outstanding any Indebtedness (as hereinafter defined) the terms of
which restrict the Corporation's ability to redeem, in whole or in part, the
Series A Preferred Stock ("Restrictive Indebtedness"), then in such event the
Corporation's obligations under Section 6.1 and Section 6.2 to redeem any
shares of Series A Preferred Stock shall be suspended until ninety-one (91) days
after the date that such Restrictive Indebtedness is no longer outstanding. The
Corporation shall notify the holders of the Series A Preferred Stock in writing
within ten (10) days of its incurrence of any Restrictive Indebtedness which
under this Section 6.6 would require the suspension of its redemption
obligations under Sections 6.1 and 6.2 hereof. Within ten days after the
expiration of ninety-one (91) days after the date of the payment of such
Restrictive Indebtedness in full, the Corporation shall issue a written notice
of redemption in accordance with Section 6.5 hereof for such number of shares
of Series A Preferred Stock as the Corporation would have been obligated to
redeem, pursuant to the provisions of Sections 6.1 or 6.2 hereof, on or prior to
such notice date, but for the provisions of this Section 6.6. Nothing in this
Section 6.6 shall affect or impair the rights granted the holders of Series A
Preferred Stock pursuant to Section 5 hereof, nor shall it affect or impair any
of the provisions relating to conversion set forth in Section 8 hereof.
Notwithstanding any other provision of this Section 6 to the contrary, unless
approved by the Preferred Directors, the aggregate principal amount of
Restrictive Indebtedness shall not exceed at any time $150 million. For
purposes of this Section 6.6, "Indebtedness" shall mean (i) any obligation of
the Corporation or its subsidiaries for borrowed money, (ii) any obligation of
the Corporation or its subsidiaries evidenced by bonds, debentures, notes or
similar instruments, and (iii) any reimbursement obligation of the Corporation
or its subsidiaries with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of the Corporation and/or its
subsidiaries, in each case, other than any obligation owed to a Person who
directly or indirectly is controlling or controlled by or under direct or
indirect common control with the Corporation."
2. "7(g) The sum of (i) consolidated stockholders' equity of the Corporation
and its subsidiaries, and (ii) (to the extent not included in the stockholders'
equity) the Series A Preferred Stock and (iii) up to $5 million outstanding in
respect of notes issued by the Corporation on the Original Issue Date to its
stockholders on such date and to the initial purchasers of the Series A
Preferred Stock, all determined in accordance with generally accepted
accounting principles consistently applied, shall at any time be less than
$19,500,000 ( the "Minimum Amount") provided, however, that the Minimum Amount
shall be reduced dollar for dollar by any payments with respect of the
principal balance of the notes referred to in clause (iii) hereof."
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3. "8.2 AUTOMATIC CONVERSION. Each share of Series A Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective
Conversion Price at any time upon the closing of an underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, with managing underwriters reasonably satisfactory to the Required
Holders, covering the offer and sale of Common Stock for the account of the
Corporation to the public generally providing net proceeds to the Corporation
(after underwriter commissions and discounts, but before other offering
expenses) of not less than $20,000,000 and at a price per share of Common Stock
equal to 137.8% of the initial Conversion Price if such underwritten public
offering shall be consummated on or before May 31, 1999, and thereafter 175% of
the initial Conversion Price, in each case adjusted for stock splits and stock
dividends after the Original Issue Date (a "QUALIFIED PUBLIC OFFERING")."
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EXHIBIT B
Registration Rights Agreement
45
EXHIBIT B
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of July 21, 1998
by and among
AAi.FosterGrant, Inc.
The Guarantors Signatories Hereto
and
NationsBanc Xxxxxxxxxx Securities LLC
Prudential Securities Incorporated
and
BancBoston Securities Inc.
================================================================================
46
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of July 21, 1998, by and among AAi.FosterGrant, Inc., a Rhode
Island corporation (the "COMPANY"), the Guarantors signatories hereto (each a
"GUARANTOR" and, collectively, the "GUARANTORS"), and NationsBanc Xxxxxxxxxx
Securities LLC, Prudential Securities Incorporated and BancBoston Securities
Inc. (each an "INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"),
each of whom has agreed to purchase the Company's 10 3/4% Senior Notes due 2006
(the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to that certain Purchase Agreement,
dated July 16, 1998 (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Series A Notes, the Company and the Guarantors have agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 7 of the Purchase Agreement. Capitalized terms
used herein and not otherwise defined shall have the meaning assigned to them in
the Indenture, dated July 21, 1998, among the Company, the Guarantors and IBJ
Xxxxxxxx Bank & Trust Company, as Trustee, relating to the Series A Notes and
the Series B Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the
City of New York on which banks are authorized or ordered to close.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer,
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47
(b) the maintenance of such Exchange Offer Registration Statement as
continuously effective and the keeping of the Exchange Offer open for a period
not less than the period required pursuant to Section 3(b) hereof and (c) the
delivery by the Company to the Registrar under the Indenture of Series B Notes
in the same aggregate principal amount as the aggregate principal amount of
Series A Notes tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act and pursuant to Regulation S
under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDEMNIFIED PARTY: As defined in Section 8(c) hereof.
INDEMNIFYING PARTY: As defined in Section 8(c) hereof.
INDENTURE: The Indenture, dated as of the Closing Date, among the
Company, the Guarantors and the Trustee, pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms therein.
LIQUIDATED DAMAGES: As defined in Section 5 hereof.
MANAGING UNDERWRITERS: As defined in Section 10 hereof.
NOTES: Series A and Series B Notes.
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48
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RESTRICTED BROKER-DEALER: Any Broker-Dealer that holds Series B Notes
that were acquired in the Exchange Offer in exchange for Series A Notes that
such Broker-Dealer acquired for its own account as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its affiliates).
RULE 144: Rule 144 promulgated under the Act.
SERIES B NOTES: The Company's 10 3/4 % Series B Senior Notes due 2006
to be issued pursuant to tHe Indenture in the Exchange Offer or as contemplated
by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77a-77b) as in
effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer for a
Series B Note and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Series A Note is disposed of
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Series A Note is distributed to
the public pursuant to Rule 144 under the Act.
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49
TRUSTEE: IBJ Xxxxxxxx Bank & Trust Company and any of its successors.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (a
"HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 45 days after the
Closing Date (such 45th day being the "FILING DEADLINE"), (ii) use their best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 135 days after the
Closing Date (such 135th day being the "EFFECTIVENESS DEADLINE"), (iii) in
connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Series B Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Series B Notes to be offered
in exchange for the Series A Notes that are Transfer Restricted Securities and
(ii) resales of Series B Notes by Broker-Dealers that tendered into the Exchange
Offer Series A Notes that such Broker-Dealers acquired for its own account as a
result of market-making activities or other trading activities (other than
Series A Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes and the guarantees
thereof shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantors shall use their respective best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 Business Days thereafter (such 30th day being the "CONSUMMATION
DEADLINE").
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50
(c)
(i) The Company and the Guarantors shall include a "Plan
of Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company or any Affiliate of the Company) may exchange such Transfer Restricted
Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with its
initial resale of any Series B Notes received by such Broker-Dealer in the
Exchange Offer, and that the Prospectus contained in the Exchange Offer
Registration Statement may be used to satisfy such prospectus delivery
requirement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.
(ii) To the extent necessary to ensure that the Exchange
Offer Registration Statement is available for sales of Series B Notes by
Broker-Dealers, upon the reasonable request of any Broker-Dealer who certifies
in writing to the Company that it anticipates it will be a Restricted
Broker-Dealer, the Company and the Guarantors agree to use their respective best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) hereof and in conformity with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of 180 days from the date on which the Exchange Offer is
Consummated (unless extended pursuant to Section 6(d) hereof), or such shorter
period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and the
Guarantors shall promptly provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers promptly upon request, at any time during
such period.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted
by applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company within 20 Business Days following
the Consummation Deadline that (A) such Holder was prohibited by law or
Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the Series B Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration
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51
Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Series A Notes acquired directly from
the Company or any of its Affiliates, then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 30 days after the earlier of (i)
the date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above,
(such earlier date, the "FILING DEADLINE"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to
all Transfer Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
earlier of (i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above and
(ii) the date on which the Company receives the notice specified in clause
(a)(ii) above (such 90th day the "EFFECTIVENESS DEADLINE").
If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company and
the Guarantors shall remain obligated to meet the Effectiveness Deadline set
forth in clause (y).
The Company and the Guarantors shall use their respective best efforts
to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the Transfer Restricted Securities are available for sale under Rule 144(k)
under the Act (as extended pursuant to Section 6(d)), or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder and furnishes to the Company in writing, within 20 days after receipt of
a request therefor, the information specified in Item 507 or 508 of Regulation
S-
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52
K, as applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
agreement and information. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading.
(c) BLACK OUT PERIOD. During any consecutive 365 day period, the
Company may suspend the effectiveness of the Shelf Registration Statement on two
occasions for a period of not more than 45 consecutive days if there is a
possible acquisition or business combination or other transaction, business
development or event involving the Company that may require disclosure in the
Shelf Registration Statement and the Board of Directors of the Company
determines in the exercise of its reasonable judgment that such disclosure is
not in the best interests of the Company and its shareholders or obtaining any
financial statements relating to an acquisition or business combination required
to be included in the Shelf Registration Statement would be impracticable. In
such a case, the Company shall promptly notify the Holders of the suspension of
the Shelf Registration Statements' effectiveness, provided that such notice
shall not require the Company to disclose the possible acquisition or business
combination or other transaction, business development or event if the Board of
Directors of the Company determines in good faith that such acquisition or
business combination or other transaction, business development or event should
remain confidential. Upon the abandonment, consummation or termination of the
possible acquisition or business combination or other transaction, business
development or event, or the availability of the required financial statements
with respect to a possible acquisition or business combination, the suspension
of the use of the Shelf Registration Statement pursuant to this Section 4(c)
shall cease and the Company shall promptly comply with Section 6(c)(ii) hereof
and notify the Holders that disposition of Transfer Restricted Securities may be
resumed.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose during the periods specified in this Agreement
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly
and severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby Liquidated Damages in an amount equal to $.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration
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53
Default continues for the first 90-day period immediately following the
occurrence of such Registration Default ("LIQUIDATED DAMAGES"). The amount of
the Liquidated Damages shall increase by an additional $.05 per week per $1,000
in principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $.30 per week per $1,000 in principal
amount of Transfer Restricted Securities; provided that the Company and the
Guarantors shall in no event be required to pay Liquidated Damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement and/or, if applicable, the Shelf Registration Statement, in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement and/or, if applicable, the Shelf Registration Statement, in the case
of (ii) above, (3) upon consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement and/or, if applicable, the Shelf Registration Statement
to again be declared effective or made usable in the case of (iv) above, the
Liquidated Damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued Liquidated Damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof and (z) comply with
all of the following provisions:
(i) If, following the Closing Date, there has been
announced a change in Commission policy with respect to exchange offers
such as the Exchange Offer, that in the reasonable opinion of counsel
to the Company raises a substantial question as to whether the Exchange
Offer is permitted by applicable federal law, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange
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54
Offer for such Transfer Restricted Securities. The Company and the
Guarantors hereby agree to pursue the issuance of such a decision to
the Commission staff level. In connection with the foregoing, the
Company and the Guarantors hereby agree to take all such other actions
as may be requested by the Commission or otherwise required in
connection with the issuance of such decision, including without
limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange
Offer, each Holder of Transfer Restricted Securities (including,
without limitation, any Holder who is a Broker- Dealer) shall furnish,
upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Series B Notes to be issued in the Exchange Offer and (C) it is
acquiring the Series B Notes in its ordinary course of business. As a
condition to its participation in the Exchange Offer, each Holder using
the Exchange Offer to participate in a distribution of the Series B
Notes shall acknowledge and agree that, if the resales are of Series B
Notes obtained by such Holder in exchange for Series A Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in XXXXXX XXXXXXX AND
CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to SHEARMAN & STERLING dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above) and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), XXXXXX XXXXXXX AND CO., INC.
(available June 5, 1991), as interpreted in the Commission's letter to
SHEARMAN & STERLING dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B)
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including a representation that neither the Company nor any Guarantor
has entered into any arrangement or understanding with any Person to
distribute the Series B Notes to be received in the Exchange Offer and
that, to the best of the Company's and each Guarantor's information and
belief, each Holder participating in the Exchange Offer is acquiring
the Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Series B Notes received in the Exchange Offer and
(C) any other undertaking or representation required by the Commission
as set forth in any no-action letter obtained pursuant to clause (i)
above, if applicable.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their respective best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors shall prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the periods required by this Agreement,
the Company and the Guarantors shall file promptly an appropriate
amendment to such Registration Statement curing such defect and, if
Commission review is required, use their respective best efforts to
cause such amendment to be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the applicable Registration Statement
as may be necessary to keep such Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities
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56
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise the Initial Purchasers, and in the case of a
Shelf Registration Statement, each selling Holder promptly and, if
requested by such Holder, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes and (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, then the Company and the
Guarantors shall use their respective best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i) hereof, if any fact or
event contemplated by Section 6(c)(iii)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Initial Purchaser, and in the case of
a Shelf Registration Statement, to each Holder in connection with such
exchange or sale, if any, before filing with the Commission, a copy of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of
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such Registration Statement), which documents shall be subject to the
review and comment of such Initial Purchasers, and, in the case of a
Shelf Registration Statement, such Holders in connection with such
sale, if any, for a period of at least three Business Days, and the
Company and the Guarantors shall not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Initial Purchasers, or, in the
case of a Shelf Registration Statement, such Holders shall reasonably
object within three Business Days after the receipt thereof. An Initial
Purchaser or selling Holder shall be deemed to have reasonably objected
to such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of material fact or omits to state any material fact
necessary to make the statements therein not misleading or fails to
comply with the applicable requirements of the Act;
(vi) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide a copy of such document to each Initial Purchaser,
and in the case of a Shelf Registration Statement, to the
representative of the Holders included within the coverage of the Shelf
Registration Statement, if any, make the Company's and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such Initial Purchasers or the
representative of the Holders may reasonably request;
(vii) in the case of a Shelf Registration Statement make
available, at reasonable times, for inspection by a representative of
the Holders and an attorney and accountant retained by such Holders, in
a manner designed to permit underwriters to satisfy their due diligence
investigation under the Act, all financial and other records and
pertinent corporate documents of the Company and the Guarantors
customarily inspected by underwriters in primary underwritten offerings
and cause the Company's and the Guarantors' officers, directors and
employees to supply all information reasonably requested by and
customarily supplied in connection with primary underwritten offerings
to, any such representative, attorney or accountant in connection with
such Shelf Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its
effectiveness; PROVIDED, HOWEVER, that any records, information or
documents that are designated by the Company or any of the Guarantors
as confidential at the time of delivery of such records, information or
documents shall be kept confidential by such persons, unless (i) such
records, information or documents are in the public domain or otherwise
publicly available, (ii) disclosure of such records, information or
documents is required by court or administrative order or (iii)
disclosure of such records, information or documents, in the opinion of
counsel to such Person, is otherwise required by law (including,
without limitation, pursuant to the requirements of the Act).
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(viii) if requested by the Initial Purchasers or in the case
of a Shelf Registration Statement, by any Holder of Notes included
within the coverage of the Shelf Registration Statement, promptly
include in any Registration Statement or related Prospectus, pursuant
to a supplement or post-effective amendment if necessary, such
information as such Initial Purchasers or such Holders may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company and the Guarantors are notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder of Notes included within the
coverage of the Shelf Registration Statement, without charge, at least
one conformed copy of the Shelf Registration Statement, as first filed
with the Commission, and of each amendment thereto, without documents
incorporated by reference therein or exhibits thereto, unless a Holder
so requests in writing.
(x) deliver to the Initial Purchasers, and to any other
Holder that so requests, without charge, at least one conformed copy of
the Exchange Offer Registration Statement and any post-effective
amendment thereto, including financial statements and schedules,
without documents incorporated therein by reference or exhibits
thereto, unless the Initial Purchasers or any such Holder so request in
writing.
(xi) deliver to each Holder of Notes included within the
coverage of the Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary prospectus)
included in the Shelf Registration Statement and any amendment or
supplement thereto as such Persons reasonably may request; the Company
and the Guarantors hereby consent, subject to the provisions of this
Agreement, to the use (in accordance with law) of the Prospectus and
any amendment or supplement thereto by each selling Holder in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(xii) deliver to the Initial Purchasers or any Restricted
Broker-Dealer, without charge, as many copies of the final prospectus
included in the Exchange Offer Registration Statement and any amendment
or supplement thereto as such Person may reasonably request; the
Company and the Guarantors hereby consent, subject to the provisions of
this Agreement, to the use (in accordance with law) of the prospectus
or any amendment or supplement thereto by the Initial Purchasers, if
necessary, any Restricted Broker-Dealer and such other Persons required
to deliver a prospectus following the Exchange Offer in connection with
the offering and sale of the Notes covered by the Prospectus, or any
amendment or supplement thereto, included in such Exchange Offer
Registration Statement;
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(xiii) upon the request of any Holder of Notes included
within the coverage of the Shelf Registration Statement, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement as may be
reasonably requested by any such Holder in connection with any sale or
resale pursuant to any Shelf Registration Statement, and in such
connection the Company and the Guarantors shall:
(A) upon the request of any Holder, furnish (or
in the case of paragraphs (2) and (3) below, use their
respective best efforts to cause to be furnished) to each
Holder, upon the effectiveness of the Shelf Registration
Statement:
(1) a certificate, dated such date,
signed on behalf of the Company and the Guarantors by
(x) a principal operating or executive officer of the
Company and the Guarantors and (y) a principal
financial or accounting officer of the Company and
the Guarantors, confirming, as of the date thereof,
the matters set forth in paragraphs (a), (c), (d) and
(e) of Section 7 of the Purchase Agreement and such
matters customarily given in underwritten offerings;
(2) an opinion, dated the date of
effectiveness of the Shelf Registration Statement, of
counsel for the Company and the Guarantors covering
matters customarily covered in opinions requested in
underwritten offerings and similar to those set forth
in Section 7(h) of the Purchase Agreement, and in any
event including a statement to the effect that such
counsel has participated in conferences with officers
and representatives of the Company and the Guarantors
and representatives of the independent public
accountants for the Company and the Guarantors and
has considered the matters required to be stated
therein and the statements contained therein, and
although such counsel is not passing upon and does
not assume the responsibility for, the accuracy,
completeness or fairness of such statements; and has
not made any independent check or verification
thereof, that such counsel advises that, on the basis
of the foregoing, no facts have come to the attention
of such counsel that lead such counsel to believe
that the Shelf Registration Statement, at the time
such Shelf Registration Statement or any
post-effective amendment thereto became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Shelf Registration Statement as of
its date, contained an untrue statement of a material
fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of
the circumstances under which
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they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements and other
financial data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated
as of the date of effectiveness of the Shelf
Registration Statement, from the Company's
independent accountants, in the customary form and
covering matters of the type customarily covered in
comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to
Section 7(n) of the Purchase Agreement, subject to
receipt of appropriate documentation, if required by,
and only if permitted by, Statement of Auditing
Standards No. 72; and
(B) deliver such other documents and
certificates as may be reasonably requested by the
representative of the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any
customary conditions contained in any agreement entered into
by the Company and the Guarantors pursuant to this clause
(xiii);
(xiv) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided, however, that neither
the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xv) issue, upon the request of any Holder of Series A
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to
the aggregate principal amount of Series A Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder; such Series B Notes to be registered in the name of such Holder
or in the name of the purchaser(s) of such Series B Notes, as the case
may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;
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(xvi) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to the closing of any such sale of
Transfer Restricted Securities;
(xvii) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to Consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xiv) above;
(xviii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xix) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to their security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xx) in the case of a Shelf Registration Statement, make
appropriate officers of the Company available to the selling Holders
for meetings with prospective purchasers of the Transfer Restricted
Securities and prepare and present to potential investors customary
"road show" material in a manner consistent with other new issuances of
other securities similar to the Transfer Restricted Securities;
(xxi) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use best efforts to cause
the Trustee to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed
with the Commission to enable such Indenture to be so qualified in a
timely manner; and
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(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement shall be borne by the Company, regardless
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses, (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws, (iii) all expenses of printing (including printing certificates for the
Series B Notes to be issued in the Exchange Offer and printing of Prospectuses,
messenger and delivery services and telephone, (iv) all fees and disbursements
of counsel for the Company and the Guarantors and in the event of a Shelf
Registration Statement, the reasonable fees and disbursements of one firm of
counsel for the Holders of Transfer Restricted Securities (who shall be Xxxxxx &
Xxxxxxx, unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Shelf Registration Statement is being prepared) and fees and disbursements of
the Trustee and counsel, (v) all application and filing fees in connection with
listing the Series B Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance) but excluding fees and expenses of
counsel to the underwriters and underwriting
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discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of the Series B Notes by a Holder.
The Company shall, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally,
to indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "INDEMNIFIED HOLDER") from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Company to any holder
or any prospective purchaser of Series B Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their respective directors, officers, employees, agents and
representatives, and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or the
Guarantors, to the same extent as the foregoing indemnity from the Company and
the Guarantors to each of the Indemnified Holders, but only with reference to
information relating to such Indemnified Holder furnished in writing to the
Company by such Indemnified Holder expressly for use in any Registration
Statement. In no event shall any Indemnified Holder be liable or responsible for
any amount in excess of the amount by which the total amount received by such
Indemnified Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds the amount of any damages that such
Indemnified Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
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(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the Indemnified Party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the Indemnifying Party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), an Indemnified Holder shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Indemnified Holder). Any Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Indemnified
Party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the Indemnified Party or (iii) the named parties to
any such action (including any impleaded parties) include both the Indemnified
Party and the Indemnifying Party, and the Indemnified Party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party).
In any such case, the Indemnifying Party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Indemnified Parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Indemnified Holders, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The Indemnifying Party shall indemnify and
hold harmless the Indemnified Party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than 50 days after the Indemnifying Party
shall have received a request from the Indemnified Party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the Indemnifying Party) and, prior to the date of such
settlement, the Indemnifying Party shall have failed to comply with such
reimbursement request. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the Indemnified Party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
Indemnified Party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the Indemnified Party from all liability on claims
that are or could
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have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of the Indemnified Party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Indemnified Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Guarantors, on the one
hand, or by the Indemnified Holder, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and judgments referred to above shall
be deemed to include, subject to the limitations set forth in the second
paragraph of Section 8(a), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder or its
related Indemnified Holders shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total received by such Holder
with respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such
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untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each of the Holders
hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. UNDERWRITTEN REGISTRATIONS
If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering ("MANAGING UNDERWRITERS") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities included in such offering; provided, however, that the Managing
Underwriters shall be reasonably satisfactory to the Company.
No Person may participate in any underwritten registration hereunder
unless such Person (i) agrees to sell such Person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 11. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors acknowledge and agree
that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
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Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor shall, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's and the Guarantors' securities under any agreement in effect on
the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless (i) in the case
of Section 5 hereof and this Section 10(c)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities (excluding Transfer Restricted Securities held by
the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders of Transfer Restricted
Securities participating in the Exchange Offer shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
AAi.FosterGrant, Inc.
23
68
000 Xxxxxx Xxxxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to the Initial
Purchasers in the form attached hereto as Exhibit A.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Holder shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Holder shall be entitled to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
24
69
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
25
70
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AAI.FOSTERGRANT, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
XXXXXX XXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
THE XXXXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
OPTI-RAY, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX GENERAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
26
71
XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
O-RAY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
F.G.G. INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX XXXXX GROUP, L.P.
By: XXXXXXX HOLDINGS, INC., GENERAL
PARTNER
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
FANTASMA, LLC
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
27
72
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ J. Xxxxx Xxxxxx
------------------------------
Name: J. Xxxxx Xxxxxx
Title: Principal
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxx X'Xxxxx
------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Director
BANCBOSTON SECURITIES INC.
By: /s/ Xxxxxxx X. Xxx
------------------------------
Name: Xxxxxxx X. Xxx
Title: Managing Director
28
73
EXHIBIT A
NOTICE OF FILING OF REGISTRATION STATEMENT
To: NationsBanc Xxxxxxxxxx Securities LLC
Prudential Securities Incorporated
BancBoston Securities Inc.
From: AAi.FosterGrant, Inc.
Re: 10 3/4% Series A Senior Notes Due 2006
Date: ____________, 199__
For your information only (NO ACTION REQUIRED):
Today, ________________, 199__, we filed [an Exchange
Registration Statement] [a Shelf Registration Statement] with the Securities and
Exchange Commission. We currently expect this registration statement to be
declared effective by __________________________, 199__.
A-1
74
SCHEDULE A
Subsidiaries
Company Name Jurisdiction Of Organization
------------ ----------------------------
1. Xxxxxx Xxxxx Holdings, Inc. Delaware
2. The Xxxxxxx Company Texas
3. Opti-Ray, Inc. New York
4. Xxxxxxx General, Inc. Delaware
5. Xxxxxxx Holdings, Inc. Delaware
6. O-Ray Holdings, Inc. Delaware
7. F.G.G. Investments, Inc. Delaware
8. Xxxxxx Xxxxx Group, L.P. Delaware
9. Fantasma, LLC (80%) Delaware
10. AAi Company of Canada Nova Scotia
Canada
11. Vendome Accessories Limited (51%) Nova Scotia
Canada
12. AAi Xxxxxx Xxxxx Limited United Kingdom
75
13. AAi/Joske's, S. de X. X. de C.V. (55%) Mexico
76
SCHEDULE B
MATERIAL CONTRACTS
77
SCHEDULE B
This Schedule B gives effect to the Offering and the documents related thereby.
1. Indenture between the Company, its Domestic Subsidiaries and IBJ
Xxxxxxxx Bank & Trust Company, as trustee, to be dated July 21, 1998.
2. Registration Rights Agreement between the Company, the Domestic
Subsidiaries and Initial Purchasers to be dated July 21, 1998.
3. Amended and Restated Financing and Security Agreement by and among the
Company, certain of its Subsidiaries, NationsBank, N.A. as agent, and
other lenders party thereto dated as of May 9, 1997, as amended by the
Second Amended and Restated Financing and Security Agreement by and
among the Company, its Domestic Subsidiaries, NationsBank, N.A., as
agent, and other lenders party hereto to be dated July 21, 1998.
4. Fantasma LLC Member Agreement by and among the Company, Xxxxx X. Xxxxxx
and Houdini Capital LTD dated as of June 23, 1998.
5. Fantasma LLC Member Agreement by and among the Company and Xxxx
Xxxxxxxx dated as of June 23, 1998.
6. Agreement of Amendment, Termination & Modification between the Company,
Bolle Inc., Xxxxxx Xxxxx, Xxxxxx Xxxxx Group, LP and Xxxxxx Xxxxx
Holdings, Inc. dated June 1998.
7. Stock Purchase Agreement by and among the Company, BEC Group, Inc.,
Xxxxxx Xxxxx Group, L.P. and Xxxxxx Xxxxx Holdings, Inc., dated May 31,
1996, as amended by a side letter dated December 11, 1996.
8. Letter Agreement of Weston Presidio Capital II, L.P. regarding voting
of the Company's Preferred Stock dated December 9, 1996.
9. Securities Purchase Agreement among the Company, Weston Presidio II,
L.P. and certain other investors, dated May 31, 1996, as amended on
December 11, 1996.
10. Tag-Along Transfer Restriction and Voting Agreement among the Company,
Weston Presidio Capital II, L.P. and certain other investors and
certain shareholders of the Company dated May 31, 1996, as amended on
December 11, 1996.
78
11. Registration Rights Agreement among the Company, Weston Presidio
Capital II, L.P. and certain other investors and certain shareholders
of the Company dated May 31, 1996.
12. The Company's Incentive Stock Plan.
13. Employment Agreement between the Company and Xxxxxx X. Xxxxx dated May
31, 1996.
14. Employment Agreement between the Company and Xxxx X. Xxxxx, Xx. dated
May 31, 1996.
15. Employment Agreement between the Company and Xxxxx X. XxXxxxx dated May
31, 1996.
16. Employment Agreement between the Company and Xxxxxx Xxxxx dated May 31,
1996.
17. Employment Agreement between the Company and Xxxxx Xxxxxxx dated
May 31, 1996.
18. Supplement Executive Retirement Plan between the Company and Xxxxxx X.
Xxxxx dated September 29, 1994, as amended.
79
SCHEDULE C
AAI.FOSTERGRANT, INC.
Initial Purchaser Amount
----------------- ------
NationsBanc Xxxxxxxxxx Securities LLC ...........................$56,250,000.00
Prudential Securities Incorporated...............................$11,250,000.00
BancBoston Securities Inc........................................$ 7,500,000.00
$75,000,000.00
==============
