1
EXHIBIT 4.8
XXXXXX FIBER PROPERTIES, INC.
10% SENIOR NOTES DUE JUNE 1, 2007
---------------------------------
PURCHASE AGREEMENT
May 23, 1997
Xxxxxxx, Sachs & Co.
Salomon Brothers Inc
Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Xxxxxx Fiber Properties, Inc., a Delaware corporation (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
$250,000,000 principal amount of the Notes specified above (the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated May 21, 1997 (the
"Preliminary Offering Circular") has been prepared and an offering
circular in final form, dated May 23, 1997 (the "Offering Circular", in
each case including the international supplement thereto), will be
prepared promptly after the execution of this Agreement in connection with
the offering of the Securities. Any reference to the Preliminary Offering
Circular or the Offering Circular shall be deemed to refer to and include
any Additional Issuer Information (as defined in Section 5(f)) furnished
by the Company prior to the completion (as notified to the Company by
Xxxxxxx, Sachs & Co.) of the distribution of the Securities. The
Preliminary Offering Circular or the Offering Circular and any amendments
or supplements thereto did not and will not, as of their respective dates,
2
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) Neither the Company nor any of its subsidiaries (which term is
used herein as defined in the Indenture referred to in Section 1(f) below)
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
decrease or material increase in the capital stock of the Company or its
subsidiaries or any change in total consolidated debt (in excess of
$2,000,000) or decrease in total consolidated assets (in excess of
$5,000,000) or working capital (in excess of $25,000,000) of the Company
and its subsidiaries or any material adverse change, or any development
that may reasonably be expected to result in a material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries on a consolidated basis, other than as set forth or
contemplated in the Offering Circular (including the pro forma
financial information contained therein);
(c) The Company and its subsidiaries own no real property other than
a 23 acre parcel of land in Town & Country, Missouri, on which it is
constructing its new corporate headquarters and a 42,000 square foot
office building in Grand Rapids, Michigan, and, to the best of the
Company's knowledge, have good and marketable title in fee simple to such
property; the Company and its subsidiaries have good and marketable title
to all material items of 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 and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid and subsisting
leases enforceable by the Company and its subsidiaries 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 and its subsidiaries;
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Circular, and has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of the States of
2
3
Missouri and California, the only jurisdictions in which its ownership or
leasing of properties or its conduct of any business requires such
qualification; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(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 in respect of the minority interests described therein) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except for pledges securing indebtedness
as described in the Offering Circular under the caption "Description of
Existing Debt");
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement and authenticated and delivered by
the Trustee in accordance with the indenture to be dated as of May 29,
1997 (the "Indenture") between the Company and The Bank of New York, as
Trustee (the "Trustee"), 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 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 (and assuming
due authorization, execution and delivery by the Trustee), the Indenture
will constitute a valid and legally binding instrument, 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; and the Securities and the Indenture 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;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds by the Company
from the sale of the Securities) will result in a violation by the Company
of Section 7 of the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board of
Governors of the Federal Reserve System;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and the Registration Rights Agreement (as hereinafter defined in
Section 1(r) hereof) and the consummation of the transactions herein and
therein contemplated will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
3
4
(including without limitation, any license, franchise, permit, consent or
similar authorization granted to the Company or any subsidiary of the
Company by any franchising or other governmental body) 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 property or assets
of the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute 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; 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 in the manner
contemplated by the Offering Circular or the consummation by the Company
of the transactions contemplated by this Agreement, the Indenture, and the
Registration Rights Agreement except for the filing of a registration
statement by the Company with the Securities and Exchange Commission (the
"Commission") pursuant to the United States Securities Act of 1933, as
amended (the "Act") pursuant to Section 5(l) 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;
(i) Neither the Company nor any of its subsidiaries is in violation
of its Certificate or Articles of Incorporation or By-laws or 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 (including without limitation, any
license, franchise, permit, consent or similar authorization granted to
the Company or any subsidiary by any franchising or other governmental
body) to which it is a party or by which it or any of its properties may
be bound, except for any such violation or default that individually or in
the aggregate would not have a material adverse effect on (i) the general
affairs, management, financial position, stockholders' equity or results
of operation of the Company and its subsidiaries or (ii) the rights of the
holders of the Securities;
(j) The statements set forth in the Offering Circular under the
caption "Description of the Notes", insofar as they purport to constitute
a summary of the terms of the Securities, and under the captions "Summary
- Recent Developments", "Risk Factors", "Business of the Company",
"Description of Existing Debt", "Regulatory Overview", and "Certain United
States Federal Income Tax Consequences to Foreign Holders", insofar as
they purport to describe the provisions of the laws, legal proceedings,
and documents referred to therein, are accurate and fair summaries of such
terms and provisions, respectively, and are complete in all material
respects;
(k) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would
4
5
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) 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 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;
(m) The Company is not, and after giving effect to the offering and
sale of the Securities will not be, an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(n) Neither the Company, nor any person acting on its behalf, 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 Act and the
Company, any affiliate of the Company 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;
(o) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company 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 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
Act (the foregoing will not prevent offers and sales made pursuant to an
exchange offer or shelf registration statement in accordance with the
Registration Rights Agreement);
(p) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
5
6
(q) KPMG Peat Marwick 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;
(r) The Exchange and Registration Rights Agreement between the
Company and the Purchasers to be dated as of May 29, 1997 (the
"Registration Rights Agreement") has been duly authorized, and, when
executed and delivered by the Company (assuming due authorization,
execution and delivery by the Purchasers), will constitute a valid and
legally binding agreement of the Company 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, to general equity principles and, as to
enforcement of rights to indemnity and contribution thereunder, to
limitations under applicable securities laws or public policy; and the
Registration Rights Agreement will conform in all material respects to
the description thereof in the Offering Circular;
(s) This Agreement has been duly authorized, executed and delivered
by the Company;
(t) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transactions contemplated by this Agreement or the Registration Rights
Agreement other than any such right that has been expressly waived in
writing;
(u) Except as set forth in or contemplated by the Offering Circular
with respect to systems under development, each of the Company and its
subsidiaries has all material certificates, consents, exemptions, orders,
permits, licenses, authorizations, franchises or other material approvals
(each, an "Authorization") of and from, and has made all material
declarations and filings with, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, necessary or appropriate for the Company and its
subsidiaries to own, lease, license, use and construct its properties and
assets and to conduct its business in the manner described in the Offering
Circular, except to the extent that the failure to obtain any such
Authorizations or make any such declaration or filing would not,
singularly or in the aggregate, reasonably be expected to have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries. All such Authorizations are in full force and effect with
respect to the Company and its subsidiaries; to the best knowledge of the
Company, no event has occurred that permits, or after notice or lapse of
time could permit, the revocation, termination or modification of any such
Authorization; the Company and its subsidiaries are in compliance in all
material respects with the terms and conditions of all such Authorizations
and with the rules and regulations of the regulatory authorities and
governing bodies having jurisdiction with respect thereto; and, except as
set forth in the Offering Circular, the Company has no knowledge that any
person is contesting or intends to contest the granting of any material
Authorization; and
6
7
(v) Neither the execution and delivery of this Agreement, the
Indenture or the Registration Rights Agreement, nor the consummation of
the transactions contemplated hereby or thereby nor compliance with the
terms, conditions and provisions thereof by the Company will cause any
suspension, revocation, impairment, forfeiture, nonrenewal or termination
of any Authorization.
2. Subject to the terms and conditions herein set forth, the Company
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 97.125% of the principal amount thereof, plus accrued interest, if
any, from May 29, 1997 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:
(a) It will offer and sell the Securities only: (i) to 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
electronic transfer to the order of the Company 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 May 29, 1997 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
7
8
delivered at such time and date at the offices of Xxxxxxxx & Xxxxxxxx, 000
Xxxxx Xxxxxx, 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 2:00 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. The Company agrees 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 the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish
the Purchasers with four copies of the Offering Circular in New York City and
each amendment or supplement thereto signed by an authorized officer of the
Company 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
copies thereof in such quantities as you may reasonably request, and if, at any
time prior to the completion of the distribution of the Securities (as notified
to the Company by Xxxxxxx, Sachs & Co.), 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 the Securities as many 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 90 days after the Time of Delivery, not to offer, sell, contract to
sell or otherwise dispose of, except
8
9
as provided hereunder any securities of the Company that are substantially
similar to the Securities (other than as contemplated by the Registration
Rights Agreement) or any securities of the Company convertible or exchangeable
for securities of the Company that are substantially similar to the Securities
without the prior written consent of Xxxxxxx, Xxxxx & Co.;
(e) Not to be or become, at any time prior to the expiration of three
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 reasonably requested by you at any time when any of the Securities
are (i) restricted securities, as defined in Rule 144(a)(3) under the Act or
(ii) securities that can only be sold pursuant to Regulation S under the Act,
Rule 144A under the Act or Rule 144 under the Act or in a transaction exempt
from the registration requirements under the Act pursuant to Section 4 of the
Act and not involving a public offering, to use its reasonable best efforts to
cause such Securities to be eligible for the PORTAL trading system of the
National Association of Securities Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after the Time of
Delivery, five copies of a notice on Form D under the Act (one of which will be
manually signed by a person duly authorized by the Company); to otherwise
comply with the requirements of Rule 503 under the Act; and to furnish promptly
to you evidence of each such required timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a consolidated
balance sheet and consolidated 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), consolidated summary
financial information of the Company and its subsidiaries for such quarter in
reasonable detail;
(j) During a period of five years from the date of the Offering Circular,
to furnish to you copies of all reports or other communications (financial or
other) furnished to stockholders of the Company, 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
any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (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
9
10
stockholders generally or to the Commission);
(k) During the period of three years after the Time of Delivery, until
such time as the exchange offer closes or the resale registration becomes
effective, the Company will not, and will not permit any of its "affiliates"
(as defined in Rule 144 under the Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them except pursuant to an effective registration statement under the
Act or any exemption therefrom;
(l) Pursuant to the Registration Rights Agreement, the Company shall file
and use its reasonable best efforts to cause to be declared or become effective
under the Act, on or prior to 60 days after the Time of Delivery, a
registration statement on Form S-4 providing for the registration of (i)
another series of debt securities of the Company, with terms substantially
identical to the Securities (the "Exchange Securities"), 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 Act or (ii) in the event that such exchange
offer has not been consummated within 135 days following the Time of Delivery,
and in lieu thereof, file and use its reasonable best efforts to cause to be
declared or become effective under the Act a registration statement relating to
the shelf registration of the Securities; and
(m) 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. The Company covenants and agrees with the several Purchasers that the
Company 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 of the Company in connection
with the preparation and printing 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 printing or producing any Agreement among Purchasers, this Agreement, the
Indenture, 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
reasonable expenses in connection with the qualification of the 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; (v) the cost of preparing the 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 and
the Securities; (vii) any cost incurred in connection with the designation of
the Securities for trading as a PORTAL security 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,
10
11
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.
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 the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect to
the incorporation of the Company, the validity of the Indenture, the Securities
and the Registration Rights Agreement, the Offering Circular, and other related
matters 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) Xxxxx Xxxx LLP, counsel for the Company, shall have furnished to you
their written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Offering Circular;
(ii) 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;
(iii) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, provided that with respect to
subsidiaries incorporated under the laws of the State of Michigan or
Nevada subsidiaries, such counsel need only state that each such
subsidiary is a corporation validly existing in good standing under the
laws of its jurisdiction of incorporation; and all of the issued shares of
capital stock of each such subsidiary 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 in respect of the minority interests described therein)
are owned of record by the Company directly or indirectly through one or
more subsidiaries of the Company, free and clear of any pledge noted on
the stock records of such subsidiary (except for pledges securing the
indebtedness described in the Offering Circular under the caption
"Description of Existing Debt") (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel,
provided that such counsel shall state that they believe that both you
and they are justified in relying
11
12
upon such opinions);
(iv) This Agreement has been duly authorized, executed and delivered
by the Company;
(v) The Securities have been duly authorized and executed by the
Company and when duly authenticated by the Trustee and delivered to the
Purchasers upon payment therefor by the Purchasers, will be duly issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture; and the
Securities and the Indenture conform in all material respects to the
summaries thereof in the Offering Circular;
(vi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Purchasers, constitutes a valid and legally
binding obligation of the Company 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 and, as to
enforcement of rights to indemnity and contribution thereunder, to
limitations under applicable securities laws or public policy; and the
Registration Rights Agreement conforms in all material respects to the
summary thereof in the Offering Circular;
(vii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery by
the Trustee, constitutes a valid and legally binding obligation of the
Company, 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, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether enforceability is
considered in a proceeding in equity or at law;
(viii) The issuance and sale of the Securities by the Company to the
Purchasers pursuant to this Agreement and the compliance by the Company
with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation by
the Company of the transactions herein and therein contemplated will not
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel 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 property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute, rule or
regulation, or any order known to such counsel, of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their
12
13
properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issuance and sale of the Securities as contemplated by
this Agreement and the Offering Circular or the consummation by the
Company of the other transactions contemplated by this Agreement, the
Indenture or the Registration Rights Agreement, except such consents,
approvals, authorizations, orders, 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, and such
consents, approvals, authorizations, orders, registrations and
qualifications as may be required under the Act, the United States Trust
Indenture Act of 1939 (the "Trust Indenture Act") and state or foreign
securities or Blue Sky laws in connection with the filing of a
registration statement by the Company with the Commission pursuant to the
Act in accordance with Section 5(l) hereof and the exchange offer or
resale registration contemplated by the Registration Rights Agreement
described in the Offering Circular;
(x) The statements set forth in the Offering Circular under the
caption "Description of the Notes", insofar as they purport to constitute
a summary of the terms of the Securities, and under the captions
"Description of Existing Debt" and "Certain United States Federal Income
Tax Consequences to Foreign Holders", insofar as they purport to describe
the provisions of the laws, legal proceedings and documents referred to
therein, are accurate summaries of such terms and provisions in all
material respects;
(xi) Assuming the accuracy of the representations of the Purchasers
set forth in Section 3 of this Agreement, no registration of the
Securities under the Act, and no qualification of an indenture under the
United States Trust Indenture Act with respect thereto, is required for
the offer, sale and initial resale of the Securities by the Purchasers in
the manner contemplated by this Agreement; and
(xii) The Company is not, nor will it be upon issuance of the
Securities and the application of the proceeds therefrom as set forth in
the first paragraph under the caption "Use of Proceeds" in the Offering
Circular, an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company
Act.
Such counsel shall also state that, during the course of the preparation
by the Company of the Offering Circular, such counsel has participated in
conferences with your representatives and counsel and with officers and
representatives of the Company, at which conferences the contents of the
Offering Circular were discussed, reviewed and revised, and, although such
counsel is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements made in the Offering
Circular and has not made any independent investigation thereof, on the basis
of the information that was developed during the course thereof, considered in
the light of such counsel's understanding of applicable law and
13
14
the experience it has gained through its practice thereunder, that such counsel
has no reason to believe that the Offering Circular and any amendments or
supplements thereto, as of the respective dates thereof, contained or, as of
the Time of Delivery, contains any untrue statement of a material fact or
omitted or, as of the Time of Delivery, omits 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, that such counsel need
not express an opinion or belief as to the financial statements and related
notes, or any other financial data contained in the Offering Circular.
(c) Xxxx X. Xxxxxxxxx, Esq., Executive Vice President-Regulatory, and
Corporate Development of the Company or Xxxxxxx X. Xxxxxxxxxxx, Senior Vice
President and General Counsel of the Company, shall have furnished to you their
written opinions, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) To the best of such counsel's knowledge and other than as set
forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its 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 on the consolidated financial position, stockholders'
equity, results of operations or general affairs of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
the States of Missouri and California;
(iii) To the best knowledge of such counsel and except as set forth
in or contemplated by the Offering Circular with respect to systems under
development, (a) each of the Company and its subsidiaries has all
Authorizations of and from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, which
are necessary or appropriate for the Company and its subsidiaries to own,
lease, license, use and construct its properties and assets and to conduct
its business in the manner described in the Offering Circular, except to
the extent that the failure to obtain any such Authorizations or make any
such declaration or filing would not, singularly or in the aggregate,
reasonably be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations or general affairs of the Company and its subsidiaries, (b) all
such Authorizations are in full force and effect with respect to the
Company and its subsidiaries, (c) no event has occurred that permits, or
after notice or lapse of time could permit, the revocation, termination or
modification of any such Authorization and (d) the Company and its
subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations
of the regulatory authorities and
14
15
governing bodies having jurisdiction with respect thereto;
(iv) To the best knowledge of such counsel, neither the execution
and delivery of this Agreement, the Indenture or the Registration Rights
Agreement, the issuance and sale of the Securities by the Company to the
Purchasers, nor the consummation by the Company of the transactions
contemplated hereby or thereby nor compliance with the terms, conditions
and provisions thereof by the Company will cause any suspension,
revocation, impairment, forfeiture, nonrenewal or termination of any
Authorization; and
(v) The statements set forth in the Offering Circular under the
captions "Summary-Recent Developments" and "Regulatory Overview", insofar
as they purport to describe certain of the provisions of the laws, legal
proceedings and documents referred to therein, are accurate summaries of
such provisions in all material respects.
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, KPMG Peat Marwick 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;
(e) (i) Neither the Company nor any of its 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 decrease or material increase in the
capital stock of the Company or any of its subsidiaries or any change in total
consolidated debt (in excess of $2,000,000) or decrease in total consolidated
assets (in excess of $5,000,000) or working capital (in excess of $25,000,000)
of the Company and its 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 and its subsidiaries, otherwise than as set forth or contemplated in
the Offering Circular (including the pro forma financial information contained
therein), the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Purchasers so material and adverse as to make
it impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company'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;
15
16
(g) 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 (iv) in the
judgment of the Purchasers makes it impracticable or inadvisable to proceed
with the offering or the delivery of the Securities on the terms and in the
manner contemplated in the Offering Circular; or (v) 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
Purchasers, would materially and adversely affect the financial markets for the
Securities and other debt securities;
(h) The Securities have been designated for trading on PORTAL;
(i) The Registration Rights Agreement shall have been duly authorized,
executed and delivered by the Company;
(j) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this
Section and as to such other matters as you may reasonably request; and
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of copies of the Offering Circular on the
New York Business Day next succeeding the date of this Agreement.
8. (a) The Company will 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 shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon 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 against
any
16
17
losses, claims, damages or liabilities to which the Company 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 for any
legal or other expenses reasonably incurred by the Company 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. No indemnifying party shall be liable
for the cost of any settlement effected by an indemnified party without the
written consent of such indemnifying party, which consent shall not be
unreasonably withheld. In no event shall any indemnifying party be liable for
the fees and expenses of more than one firm or counsel (except to the extent
that local counsel, in addition to such firm or counsel, is required for
effective representation) to represent all indemnified parties with respect to
a single action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations, which firm or counsel
shall be designated in writing by Xxxxxxx, Xxxxx & Co., on behalf of any
Purchasers and controlling persons, and by the Company, on behalf of itself and
17
18
any of its officers, directors or controlling persons.
(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, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company 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 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 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 underwriting 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 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 the Company under this Section 8 shall be in
addition to any liability which the Company 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
18
19
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company 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
satisfactory to you to purchase such Securities on such terms. In the event
that, 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, except for the expenses to be borne by
the Company 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 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
19
20
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, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except, in
the case of the non-defaulting Purchaser or Purchasers only, as provided in
Sections 6 and 8 hereof; but, if for any other reason, the Securities are not
delivered by or on behalf of the Company as provided herein, 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 provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, 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 representative.
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 ((000) 000-0000) to you in care of Xxxxxxx, Sachs & Co.,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department;
and if to the Company shall be delivered or sent by mail, telex or facsimile
transmission ((000) 000-0000) to the address of the Company set forth in the
Offering Circular, Attention: Vice Chairman; provided, however, that any notice
to a Purchaser pursuant to Section 8(c) hereof shall also be delivered or sent
by mail, telex or facsimile transmission to such Purchaser at any address
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company 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.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. 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.
20
21
If the foregoing is in accordance with your understanding, please sign and
return to us 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 between each of the Purchasers and the Company.
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
21
22
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,
Xxxxxx Fiber Properties, Inc.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Salomon Brothers Inc
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxx, Sachs & Co.
(Xxxxxxx, Xxxxx & Co.)
23
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- -----------
Xxxxxxx, Sachs & Co......................................... $ 93,750,000
Salomon Brothers Inc........................................ 93,750,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................................ 62,500,000
Total....................................................... $250,000,000
============
23
24
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, Rule 144A or pursuant to Paragraph 2 of this
Annex I 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 or
pursuant to Paragraph 2 of this Annex I), 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 Xxxxxxx, Sachs & Co. 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 has also agreed that (i) it has not offered or sold and
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, (ii) it has
complied, and will comply, with all applicable provisions of the Financial
A-1
25
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 (iii) 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 Act of 1986 (Investment Advertisements) (Exemptions) Order
1996 of Great Britain or as a person to whom the document may otherwise be
lawfully 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.
A-2
26
ANNEX II
Pursuant to Section 7(e) 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 under rule 101 of the American Institute of
Certified Public Accountants' Code of Professional Conduct, and its
interpretations and rulings;
(ii) In their opinion, the consolidated financial statements and financial
statement schedules audited by them and included in the Offering Circular
comply as to form in all material respects with generally accepted accounting
principles;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the two 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 two 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 operations, consolidated
balance sheets, consolidated statements of cash flows and consolidated
statements of changes in shareholders' equity 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 audited consolidated statements of operations, consolidated
balance sheets, consolidated statements of cash flows and consolidated
statements of changes in shareholders' equity 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;
A-1
27
(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 (loss) or the total amounts of consolidated net income
(loss) 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.
A-2
