Exhibit 10.7
EXECUTION VERSION
THE XXXXXXX XXXXXX COMPANY
10.875% SENIOR SUBORDINATED NOTES DUE 2011
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PURCHASE AGREEMENT
August 8, 2001
Xxxxxxx, Sachs & Co.,
Fleet Securities, Inc., and
BNP Paribas Securities Corp.,
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of a Stock Purchase Agreement entered into on July
12, 2001 (the "Acquisition Agreement"), CH Acquisitions LLC, a newly-formed
Delaware limited liability company ("CH Acquisitions"), along with certain
members of management of The Xxxxxxx Xxxxxx Company, a Massachusetts corporation
(the "Company"), proposes to acquire all the outstanding common stock of the
parent of the Company (the "Acquisition") on or about August 15, 2001 (the
"Consummation Date"). In connection with the Acquisition, the Company proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of $175.0
million principal amount of the Senior Subordinated Notes specified above (the
"Notes"). The Notes will be unconditionally guaranteed on a senior subordinated
basis as to the payment of principal, premium, if any, and interest (the
"Guarantees") by each of the subsidiaries of the Company named in Schedule II
hereto (collectively, the "Guarantors"). The Notes and the Guarantees are
hereinafter collectively called the "Securities".
1. As of the date hereof, CH Acquisitions (excluding the representations
and warranties set forth in subparagraphs (f), (g) and (h)) and, on the
Consummation Date, each of the Company and the Guarantors, jointly and
severally, represents and warrants to, and agrees with, each of the Purchasers
that:
(a) A preliminary offering circular, dated July 30, 2001 (the
"Preliminary Offering Circular") and an offering circular, dated August
8, 2001 (the "Offering Circular"), in each case including the
international supplement thereto have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary Offering
Circular or the Offering
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Circular, as the case may be, as amended or supplemented, as of any
specified date, shall be deemed to include (i) any documents filed with
the United States Securities and Exchange Commission (the "Commission")
pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date of
the Preliminary Offering Circular or the Offering Circular, as the case
may be, and prior to such specified date and (ii) any Additional Issuer
Information (as defined in Section 5(f)) furnished by the Company prior
to the completion of the distribution of the Securities. All documents
filed under the Exchange Act and so deemed to be included in the
Preliminary Offering Circular or the Offering Circular, as the case may
be, or any amendment or supplement thereto are hereinafter called the
"Exchange Act Reports". The Exchange Act Reports, when they were or are
filed with the Commission, conformed or will conform in all material
respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder. The
Preliminary Offering Circular or the Offering Circular and any amendments
or supplements thereto, the Exchange Act Reports and the Company's most
recent Annual Report on Form 10-K for the fiscal year ended December 31,
2000 and Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001 and June 30, 2001 did not and will not, as of their respective
dates, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a Purchaser
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(b) None of the Company, the Guarantors or any of their respective
subsidiaries has sustained since the date of the latest audited financial
statements included in the Offering Circular any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Offering Circular; and, since the respective
dates as of which information is given in the Offering Circular, there
has not been any change in the capital stock or long-term debt of the
Company, the Guarantors or any of their respective subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, the Guarantors and their respective subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Offering
Circular;
(c) Each of the Company, the Guarantors and their respective
subsidiaries has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Offering Circular or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Company, the Guarantors or their respective subsidiaries; and any
real property and buildings held under lease by the Company, the
Guarantors or their respective subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company, the Guarantors
and their respective subsidiaries;
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(d) Each of the Company and the Guarantors has been duly
incorporated or organized and is validly existing and in good standing
under the laws of its respective state of incorporation or organization,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Circular, and each such
entity has been duly qualified as a foreign corporation or similar entity
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
and the Guarantors has been duly incorporated or organized and is validly
existing as a corporation or similar entity in good standing under the
laws of its jurisdiction of incorporation or organization;
(e) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares and except as otherwise set forth in the Offering
Circular) are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
(f) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the indenture, to be dated as of the Consummation Date (the "Indenture"),
among the Company, the Guarantors and State Street Bank and Trust
Company, as trustee (the "Trustee"), under which they are to be issued,
which will be substantially in the form previously delivered to you; the
Indenture has been duly authorized and, when executed and delivered by
the Company, the Guarantors and the Trustee, the Indenture will
constitute a valid and legally binding instrument, enforceable against
the Company and the Guarantors in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the Indenture will
conform to the descriptions thereof in the Offering Circular and will be
in substantially the form previously delivered to you;
(g) Each of the Guarantees has been duly authorized and, upon the
due authorization, issuance and delivery of the related Notes and the due
endorsement of such Guarantee thereon, will have been duly executed,
authenticated, issued and delivered and will constitute a valid and
legally binding obligation of the respective Guarantor entitled to the
benefits provided by the Indenture under which they are to be issued and
enforceable against the respective Guarantor in accordance with its terms
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles, and the Guarantees will conform
to the description thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(h) The exchange and registration rights agreement, to be dated as
of the Consummation Date (the "Registration Rights Agreement"), among the
Company, the Guarantors and the Purchasers has been duly authorized by
the Company and each of the
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Guarantors and, when executed and delivered by the Company and each
Guarantor, the Registration Rights Agreement will constitute a valid and
legally binding instrument of the Company and each Guarantor, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; PROVIDED that no representation is made as to the
enforceability of the indemnification and contribution provisions
thereof. Pursuant to the Registration Rights Agreement, the Company and
the Guarantors will agree to file with the Commission, under the
circumstances set forth therein, (i) a registration statement under the
United States Securities Act of 1933, as amended (the "Act"), relating to
another series of debt securities of the Company with terms substantially
identical to the Securities (the "Exchange Securities") to be offered in
exchange for the Securities (the "Exchange Offer") and (ii) to the extent
required by the Registration Rights Agreement, a shelf registration
statement pursuant to Rule 415 of the Act relating to the resale by
certain holders of the Securities, and in each case, to use its best
efforts to cause such registration statements to be declared effective.
The Exchange Securities have been duly authorized for issuance by the
Company, and when issued and authenticated in accordance with the terms
of the Indenture will be the valid and legally binding obligations of the
Company, entitled to the benefits provided by the Indenture, enforceable
against the Company in accordance with their terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles. The Guarantees with respect to the Exchange
Securities have been duly authorized for issuance by each Guarantor, and
when issued in accordance with the terms of the Indenture will be the
valid and legally binding obligations of such Guarantor, entitled to the
benefits provided by the Indenture, enforceable against the respective
Guarantors in accordance with their terms subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. The Registration Rights Agreement, the Exchange
Securities and the Guarantees with respect to the Exchange Securities
will conform, in all material respects, to the descriptions thereof in
the Offering Circular and will be in substantially the form previously
delivered to you;
(i) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations T, U, and X of the Board of Governors of
the Federal Reserve System;
(j) Prior to the date hereof, none of the Company, the Guarantors or
any of their respective affiliates has taken any action which is designed
to or which has constituted or which might have been expected to cause or
result in stabilization or manipulation of the price of any security of
the Company or any Guarantor in connection with the offering of the
Securities;
(k) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities,
the Registration Rights Agreement, the Indenture and this Agreement and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under (i) any indenture,
mortgage, deed of trust, loan
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agreement or other agreement or instrument to which the Company, the
Guarantors or any of their respective subsidiaries is a party or by which
the Company, the Guarantors or any of their respective subsidiaries is
bound or to which any of the property or assets of the Company, the
Guarantors or any of their respective subsidiaries is subject, (ii) the
Certificate of Incorporation, By-laws or similar organizational documents
of the Company or any Guarantor or (iii) assuming the accuracy of the
representations made by the Purchasers in Section 3 hereof, any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company, the Guarantors or any of their
respective subsidiaries or any of their properties, except, in the case
of (i) and (iii) above, for such conflicts, breaches, violations and
defaults as would not individually or in the aggregate have a material
adverse effect on the current or future financial position, stockholders'
equity or results of operations of the Company, the Guarantors and their
respective subsidiaries, taken as a whole (a "Material Adverse Effect");
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company or the Guarantors of the transactions contemplated by this
Agreement, the Registration Rights Agreement or the Indenture, except for
the filing of a registration statement by the Company with the Commission
pursuant to the Act pursuant to Section 5(k) hereof, and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(l) None of the Company, the Guarantors or any of their respective
subsidiaries is (i) in violation of its Certificate of Incorporation,
By-laws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound, except, in the case of (ii)
above, for such defaults as would not have a Material Adverse Effect;
(m) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities, under the captions "Certain
United States Federal Income Tax Considerations", "Plan of Distribution",
"Certain Relationships and Related Transactions" and "Description of
Senior Credit Facility", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects;
(n) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company, the
Guarantors or any of their respective subsidiaries is a party or of which
any property of the Company, the Guarantors or any of their respective
subsidiaries is the subject which, if determined adversely to the Company
or any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(o) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company or any
Guarantor which are listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system;
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(p) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(q) Neither the Company, nor any of the Guarantors is, and after
giving effect to the offering and sale of the Securities will be an
"investment company", as such term is defined in the United States
Investment Company Act of 1940, as amended (the "Investment Company
Act");
(r) None of the Company, the Guarantors or any person acting on its
or their behalf (other than the Purchasers, with respect to whom the
Company makes no representations or warranties) has offered or sold the
Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as defined
in Rule 902 under the Act), by means of any directed selling efforts
within the meaning of Rule 902 under the Securities Act and the Company,
any affiliate of the Company or any Guarantor and any person acting on
its or their behalf has complied with and will implement the "offering
restriction" within the meaning of such Rule 902;
(s) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Purchasers hereunder. The Company and
the Guarantors will take reasonable precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Act) of any Securities or
any substantially similar security issued by the Company, within six
months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by Xxxxxxx, Sachs & Co.),
is made under restrictions and other circumstances reasonably designed
not to affect the status of the offer and sale of the Securities in the
United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities
Act;
(t) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(u) None of the Company's subsidiaries is a "significant
subsidiary", as such term is defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Act.
2. Subject to the terms and conditions herein set forth, each of the
Company and the Guarantors agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from
the Company, at a purchase price of 96.253% of the principal amount thereof,
plus accrued interest, if any, from August 15, 2001 to the Time of Delivery
hereunder, the principal amount of Securities set forth opposite the name of
such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
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(a) It will offer and sell the Securities only to: (i) persons who
it reasonably believes are "qualified institutional buyers" ("QIBs")
within the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A or (ii) upon the terms and conditions set forth
in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer in Federal (same day) funds, by causing DTC to credit the Securities to
the account of Xxxxxxx, Sachs & Co. at DTC. The Company will cause the
certificates representing the Securities to be made available to Xxxxxxx, Xxxxx
& Co. for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on August 15, 2001 or such other time and date as Xxxxxxx, Sachs
& Co. and the Company may agree upon in writing. Such time and date are herein
called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(i) hereof, will be delivered at such time and date at the
offices of Ropes & Xxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 3:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. As of the date hereof, CH Acquisitions and, on and after the
Consummation Date, each of the Company and the Guarantors agrees, jointly and
severally, with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith neither the Company nor any Guarantor
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
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(c) To furnish the Purchasers with copies of the Offering Circular and
each amendment or supplement with the independent accountants' report(s) in the
Offering Circular, and any amendment or supplement containing amendments to the
financial statements covered by such report(s), signed by the accountants, and
additional written and electronic copies thereof in such quantities as you may
from time to time reasonably request, and if, at any time prior to the
expiration of nine months after the date of the Offering Circular, any event
shall have occurred as a result of which the Offering Circular as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in securities as many written
and electronic copies as you may from time to time reasonably request of an
amended Offering Circular or a supplement to the Offering Circular which will
correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until
the date six months after the Time of Delivery, not to offer, sell contract to
sell or otherwise dispose of, except as provided hereunder any securities of the
Company or any Guarantor that are substantially similar to the Securities, other
than the Exchange Securities;
(e) Not to be or become, at any time prior to the expiration of two years
after the Time of Delivery, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, for the benefit of holders from time to time of Securities, to
furnish at its expense, upon request, to holders of Securities and prospective
purchasers of Securities information (the "Additional Issuer Information")
satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act;
(g) If requested by you, to use its best efforts to cause such Securities
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(h) If not otherwise available on the Commission's Electronic Data
Gathering, Analysis, and Retrieval system, to furnish to the holders of the
Securities as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Offering Circular), to make available to
the holders of the Securities consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(i) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to the holders of the Securities, and to deliver
to you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities or any class of securities of the Company or any
Guarantor is listed; and (ii) such additional information concerning the
business and financial condition of the Company and the Guarantors as
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you may from time to time reasonably request; PROVIDED that no such additional
information shall be required to be disclosed except to the extent (a) the
disclosure of such additional information to the Purchasers will not result in a
violation of Regulation FD under the Act (without requiring new disclosure to
third parties in order to avoid violation of Regulation FD) and (b) such
additional information has been made available to the stockholders of the
Company, the trustee or any other third party (such financial statements to be
on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(j) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(k) To file and use its best efforts to cause to be declared or become
effective under the Securities Act, on or prior to 180 days after the Time of
Delivery, a registration statement on Form S-4 providing for the registration of
the Exchange Securities (including the Guarantees thereon), and the exchange of
the Securities for the Exchange Securities, all in a manner which will permit
persons who acquire the Exchange Securities to resell the Exchange Securities
pursuant to Section 4(1) of the Securities Act; and
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. As of the date hereof, CH Acquisitions and, on and after the
Consummation Date, each of the Company and the Guarantors, jointly and
severally, covenants and agrees with the several Purchasers that it will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the issue of the Securities
and all other expenses in connection with the preparation, printing and filing
of the Preliminary Offering Circular and the Offering Circular and any
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchasers and dealers; (ii) the cost of copying or producing any
Agreement among Purchasers, this Agreement, the Indenture, the Registration
Rights Agreement, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the Exchange
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (iv) any fees charged by securities rating
services for rating the Securities and the Exchange Securities; (v) the cost of
preparing the Securities and the Exchange Securities; (vi) the fees and expenses
of the Trustee and any agent of the Trustee and the fees and disbursements of
counsel for the Trustee in connection with the Indenture, the Securities and the
Exchange Securities; (vii) any cost incurred in connection with the designation
of the Securities for trading in PORTAL and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
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7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of CH Acquisitions, the Company and each of the Guarantors herein
are, at and as of the Time of Delivery, true and correct, the condition that CH
Acquisitions, the Company and each of the Guarantors shall have performed all
their respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have furnished to
you such opinion or opinions, dated the Time of Delivery, as you may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(b) Ropes & Xxxx, counsel for the Company, shall have furnished to you
their written opinion, dated the Time of Delivery, in the form set forth on
Annex III hereto;
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP, shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto;
(d) (i) None of the Company, the Guarantors or any of their respective
subsidiaries shall have sustained since the date of the latest audited financial
statements included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Offering Circular,
and (ii) since the respective dates as of which information is given in the
Offering Circular there shall not have been any change in the capital stock or
long-term debt of the Company, the Guarantors or any of their respective
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the Guarantors and
their respective subsidiaries, otherwise than as set forth or contemplated in
the Offering Circular, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Representatives so material and adverse
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner contemplated in
this Agreement and in the Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's or any Guarantor's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (iii) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and in
the
10
manner contemplated in the Offering Circular; or (iv) the occurrence of any
material adverse change in the existing, financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Representatives, would materially and adversely affect the financial markets or
the markets for the Securities and other debt securities;
(g) The Securities have been designated for trading on PORTAL;
(h) The Company and the Guarantors shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the Company
and the Guarantors satisfactory to you as to the accuracy of the representations
and warranties of the Company and the Guarantors herein at and as of such Time
of Delivery, as to the performance by the Company and the Guarantors of all of
their respective obligations hereunder to be performed at or prior to such Time
of Delivery, as to the matters set forth in subsection (d) of this Section and
as to such other matters as you may reasonably request;
(i) The Company shall have given notice of redemption to each of the
Company's 10 3/8% Senior Subordinated Notes due 2006 note holders prior to, or
simultaneously with, the Time of Delivery, or made such other arrangements with
respect to the redemption of such notes, as shall be reasonably satisfactory to
the Purchasers;
(j) Xxxxxx Holdings, Inc. shall have given notice of redemption to each
of its 12% Senior Subordinated Notes due 2008 note holders prior to, or
simultaneously with, the Time of Delivery, or made such other arrangements with
respect to the redemption of such notes, as shall be reasonably satisfactory to
the Purchasers;
(k) The Company shall have consummated the New Credit Facility prior to,
or simultaneously with, the Time of Delivery on substantially the same terms
described in the Offering Circular and the Purchasers shall have received
counterparts, conformed as executed, of the New Credit Facility and such other
documentation as they deem necessary to evidence the consummation thereof;
(l) The Acquisition (as such term is defined in the Offering Circular)
shall be consummated prior to, or simultaneously with, the Time of Delivery; and
(m) Each of the Company and the Guarantors shall have executed this
Agreement prior to, or simultaneously with, the Time of Delivery.
8. (a) As of the date hereof, CH Acquisitions and, on and after the
Consummation Date, each of the Company and the Guarantors will, jointly and
severally, indemnify and hold harmless each Purchaser against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company and the Guarantors shall not be
liable in any such
11
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company and each
of the Guarantors against any losses, claims, damages or liabilities to which
the Company and any Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein; and will reimburse the Company and the Guarantors for any legal or
other expenses reasonably incurred by the Company and the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim 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
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses,
12
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors on the one hand and the Purchasers on the other from
the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Guarantors on the one hand and the Purchasers on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Purchasers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Purchasers on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, each
of the Guarantors and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Purchasers 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 above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to investors were offered to investors exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of CH Acquisitions, the Company and the Guarantors
under this Section 8 shall be in addition to any liability which CH
Acquisitions, the Company and the Guarantors may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Purchaser within the meaning of the Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of CH Acquisitions, the Company and
the Guarantors and to each person, if any, who controls CH Acquisitions, the
Company or any Guarantor within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties reasonably satisfactory to you to
purchase such Securities on such terms. In the event that,
13
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Securities, or the Company notifies you
that it has so arranged for the purchase of such Securities, you or the Company
shall have the right to postpone the Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Offering Circular, or in any other documents or arrangements,
and the Company agrees to prepare promptly any amendments to the Offering
Circular which in your opinion may thereby be made necessary. The term
"Purchaser" as used in this Agreement shall include any person substituted under
this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company or the Guarantors, except for the expenses to be borne
by the Company, the Guarantors and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Guarantors and the several
Purchasers, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Purchaser or any controlling person of any
Purchaser, or the Company, the Guarantors or any officer or director or
controlling person of the Company or a Guarantor, and shall survive delivery of
and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
(i) the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof and (ii) CH Acquisitions shall not then be
under any liability to any Purchaser except as provided in Section 6 hereof;
but, if for any other reason, the Securities are not delivered by or on behalf
of the Company as provided herein, CH Acquisitions and the Company will
reimburse the Purchasers through you for all out-of-pocket expenses approved in
writing by you, including fees and disbursements of counsel, reasonably incurred
by the Purchasers in making preparations for the purchase, sale and delivery of
the Securities, but the Company shall then be under no further liability to any
Purchaser except as
14
provided in Sections 6 and 8 hereof and CH Acquisitions shall then be under no
further liability to any Purchaser except as provided in Section 6 hereof.
12. CH Acquisitions agrees to cause each of the Company and the
Guarantors to become party to this Agreement at the time of consummation of the
Acquisition. Except as provided in Section 11 hereof, all obligations and
liabilities of CH Acquisitions under this Agreement shall terminate (a) when
each of the Company and the Guarantors become party to this Agreement, (b) if
this Agreement shall be terminated pursuant to Section 9 hereof or (c) if the
Acquisition Agreement is terminated.
13. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; PROVIDED, HOWEVER, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company, the
Guarantors and each person who controls the Company, a Guarantor or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
18. Each of the Company and the Guarantors is authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, without the Purchasers imposing any
limitation of any kind.
15
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement, as of the date of such party's execution
hereof, between each of the Purchasers and CH Acquisitions, the Company and each
of the Guarantors. It is understood that your acceptance of this letter on
behalf of each of the Purchasers is pursuant to the authority set forth in a
form of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
CH Acquisitions LLC
By: /s/ XXXX X. XXXXX
------------------------------------
Name: XXXX X. XXXXX
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Fleet Securities, Inc.
BNP Paribas Securities Corp.
By: Xxxxxxx, Sachs & Co.
By: /s/ XXXXXXX, XXXXX & CO.
------------------------------
(Xxxxxxx, Sachs & Co.)
The foregoing Agreement is hereby
agreed to and accepted as of the
Consummation Date.
The Xxxxxxx Xxxxxx Company
By: /s/ XXXXX X. XXXXX
------------------------------
Name: XXXXX X. XXXXX
Title: EXECUTIVE VICE PRESIDENT
Carter's de San Xxxxx, Inc.
By: /s/ XXXXX X. XXXXX
------------------------------
Name: XXXXX X. XXXXX
Title: VICE PRESIDENT
Carter's Imagination, Inc.
By: /s/ XXXXX X. XXXXX
------------------------------
Name: XXXXX X. XXXXX
Title: VICE PRESIDENT
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- -----------
Xxxxxxx, Xxxxx & Co......................................................................... $131,250,000
Fleet Securities, Inc....................................................................... 35,000,000
BNP Paribas Securities Corp................................................................. 8,750,000
Total..................................................................... ------------
$175,000,000
============
SCHEDULE II
Carter's de San Xxxxx, Inc.
Carter's Imagination, Inc.
ANNEX I
(1) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, each Purchaser agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
ANNEX II
Pursuant to Section 7(d) of the
Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published
rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such
five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular, inquiries
of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures
as may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Circular are not in conformity with
generally accepted accounting principles applied on the basis
substantially consistent with the basis for the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Offering
Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in
the Offering Circular;
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Offering Circular and referred to in clause (B) were not
determined on a basis substantially consistent with the basis for
the audited consolidated financial statements included in the
Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest
financial statements included in the Offering Circular or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Offering Circular except in
each case for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts
of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Offering Circular, and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
