Exhibit 1.1
================================================================================
ATRIUM COMPANIES, INC.
(a Delaware corporation)
$175,000,000
10 1/2% Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
Dated: May 10, 1999
================================================================================
TABLE OF CONTENTS
Page
PURCHASE AGREEMENT........................................................1
SECTION 1. Representations and Warranties by the Issuers.........3
(a) REPRESENTATIONS AND WARRANTIES........................3
(i) Similar Offerings.................................3
(ii) Offering Memorandum...............................4
(iii) Independent Accountants...........................4
(iv) Financial Statements..............................4
(v) No Material Adverse Change in Business............4
(vi) Good Standing of the Company......................5
(vii) Good Standing of Subsidiaries.....................5
(viii) Guarantors........................................5
(ix) Capitalization....................................6
(x) Authorization of Agreement........................6
(xi) Authorization of the Indenture....................6
(xii) Authorization of the Registration Rights
Agreement.........................................6
(xiii) Authorization of the Securities...................7
(xiv) Authorization of the Bank Amendment...............8
(xv) Description of the Operative Documents
and the Credit Agreement..........................8
(xvi) Absence of Defaults and Conflicts.................8
(xvii) Absence of Labor Dispute..........................9
(xviii) Absence of Proceedings............................9
(xix) Possession of Intellectual Property...............9
(xx) Absence of Further Requirements..................10
(xxi) Possession of Licenses and Permits...............10
(xxii) Title to Property................................11
(xxiii) Environmental Laws...............................11
(xxiv) ERISA Compliance.................................12
(xxv) Tax Returns......................................12
(xxvi) Insurance........................................12
(xxvii) Solvency.........................................13
(xxviii) Contracts........................................13
(xxix) Statistical Market-Related Data..................13
-i-
Page
(xxx) Compliance with Florida Act......................13
(xxxi) Investment Company Act...........................13
(xxxii) Rule 144A Eligibility............................13
(xxxiii) No General Solicitation..........................14
(xxxiv) No Registration Required.........................14
(xxxv) No Directed Selling Efforts......................14
(b) OFFICER'S CERTIFICATES...............................14
SECTION 2. Sale and Delivery to Initial Purchaser;
Closing..............................................14
(a) SECURITIES...........................................14
(b) PAYMENT..............................................14
(c) QUALIFIED INSTITUTIONAL BUYER........................15
(d) DENOMINATIONS; REGISTRATION..........................15
SECTION 3. Covenants of the Issuers.............................15
(a) OFFERING MEMORANDUM..................................15
(b) NOTICE AND EFFECT OF MATERIAL EVENTS.................15
(c) AMENDMENT TO OFFERING MEMORANDUM AND SUPPLEMENTS.....16
(d) QUALIFICATION OF SECURITIES FOR OFFER AND SALE.......16
(e) RATING OF SECURITIES.................................17
(f) DTC..................................................17
(g) USE OF PROCEEDS......................................17
(h) RESTRICTION OF SALE OF SECURITIES....................17
(i) PORTAL DESIGNATION...................................17
(j) PERIODIC REPORTS.....................................17
SECTION 4. Payment of Expenses..................................17
(a) EXPENSES.............................................17
-ii-
Page
(b) TERMINATION OF AGREEMENT.............................18
SECTION 5. Conditions of Initial Purchaser's Obligations........18
(a) OPINIONS OF COUNSEL FOR ISSUERS......................18
(b) OPINION OF COUNSEL FOR INITIAL PURCHASER.............24
(c) OFFICERS' CERTIFICATE................................24
(d) ACCOUNTANTS' COMFORT LETTER..........................24
(e) BRING-DOWN COMFORT LETTER............................25
(f) MAINTENANCE OF RATING................................25
(g) PORTAL...............................................25
(h) INDENTURE............................................25
(i) REGISTRATION RIGHTS AGREEMENT........................25
(j) BANK AMENDMENT.......................................25
(k) HEAT ACQUISITION; JOINDER AGREEMENT..................25
(l) ADDITIONAL DOCUMENTS.................................26
(m) TERMINATION OF AGREEMENT.............................26
SECTION 6. Subsequent Offers and Resales of the
Securities...........................................26
(a) OFFER AND SALE PROCEDURES............................26
(i) Offers and Sales Only to Qualified
Institutional Buyers or Non-U.S. Persons.........26
(ii) No General Solicitation..........................26
(iii) Purchases by Non-Bank Fiduciaries................26
(iv) Subsequent Purchaser Notification................27
(v) Minimum Principal Amount.........................27
(vi) Restrictions on Transfer.........................27
(vii) Delivery of Offering Memorandum..................27
(b) COVENANTS OF THE ISSUERS.............................27
-iii-
Page
(i) Due Diligence....................................27
(ii) Integration......................................28
(iii) Rule 144A Information............................28
(iv) Restriction on Repurchases.......................28
(c) RESALE PURSUANT TO RULE 903 OF REGULATION S OR RULE
144A..................................................28
SECTION 7. Indemnification......................................29
(a) INDEMNIFICATION OF INITIAL PURCHASER.................29
(b) INDEMNIFICATION OF ISSUERS, DIRECTORS AND OFFICERS...30
(c) ACTIONS AGAINST PARTIES; NOTIFICATION................31
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE...31
SECTION 8. Contribution.........................................32
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery.....................................33
SECTION 10. Termination of Agreement.............................33
(a) TERMINATION; GENERAL.................................33
(b) LIABILITIES..........................................34
SECTION 11. Notices..............................................34
SECTION 12. Parties..............................................34
SECTION 13. Information Supplied by the Initial Purchaser........35
SECTION 13. GOVERNING LAW AND TIME...............................35
SECTION 14. Effect of Heading....................................35
-iv-
SCHEDULES
Schedule A - List of Guarantors
Schedule B - List of Subsidiaries
EXHIBIT A - Joinder Agreement
-v-
ATRIUM COMPANIES, INC.
(a Delaware corporation)
$175,000,000
10 1/2% Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
May 10, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Each of Atrium Companies, Inc., a Delaware corporation (the
"COMPANY"), and each of the Guarantors listed on SCHEDULE A hereto other than
those marked with an asterisk (the "GUARANTORS" and, together with the Company,
the "ISSUERS") confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX" or the "INITIAL
PURCHASER"), with respect to the issue and sale by the Company and the purchase
by the Initial Purchaser of $175,000,000 of the Company's 10 1/2% Senior
Subordinated Notes due 2009 (the "NOTES"), which Notes will be unconditionally
and jointly and severally guaranteed (the "GUARANTEES" and, together with the
Notes, the "SECURITIES") on a senior subordinated basis by each of the
Guarantors; PROVIDED, HOWEVER, that each of Heat, Inc. and H.I.G. Vinyl, Inc.
and their respective subsidiaries and Champagne Industries, Inc. are not
executing this Agreement as of the date hereof, but upon consummation of the
Acquisitions (as defined below), the Company agrees to cause such persons to
execute an instrument in substantially the form attached hereto as EXHIBIT A
(the "JOINDER Agreement") pursuant to which such persons will become a party to
this Agreement as a Guarantor (it being understood that upon such persons
becoming a party to this Agreement as a Guarantor, such persons shall be deemed
to have acknowledged and agreed to be bound by all covenants, agreements,
representations, warranties and acknowledgments attributable to a Guarantor as
set forth herein and shall be deemed to have agreed to perform all obligations
and duties required of a Guarantor as set forth herein). The Notes are to be
issued pursuant to an indenture dated as of May 17, 1999 (the "INDENTURE") among
the Company, the Guarantors and State Street Bank and Trust Company, as trustee
(the "TRUSTEE"). Capitalized terms used herein without definition have the
respective meanings specified in the Offering Memorandum referred to below.
Securities issued in book-entry form
-2-
will be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated as of the Closing Time (as defined
in Section 2(b)) (the "DTC AGREEMENT"), among the Company, the Trustee and DTC.
The Issuers understand that the Initial Purchaser proposes to make
an offering of the Securities on the terms and in the manner set forth herein
and agree that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("SUBSEQUENT
PURCHASERS") at any time after the date of this Agreement. The Securities are to
be offered and sold through the Initial Purchaser without being registered under
the Securities Act of 1933, as amended (the "1933 ACT"), in reliance upon
exemptions therefrom. Pursuant to the terms of the Securities and the Indenture,
investors that acquire Securities may only resell or otherwise transfer such
Securities if such Securities are hereafter registered under the 1933 Act or if
an exemption from the registration requirements of the 1933 Act is available
(including the exemption afforded by Rule 144A ("RULE 144A") or Regulation S
("REGULATION S") of the rules and regulations promulgated under the 1933 Act by
the Securities and Exchange Commission (the "COMMISSION")).
The Issuers have prepared and delivered to the Initial Purchaser
copies of a preliminary offering memorandum dated April 26, 1999 (the
"PRELIMINARY OFFERING MEMORANDUM") and have prepared and will deliver to the
Initial Purchaser, on the date hereof or the next succeeding day, copies of a
final offering memorandum dated May 10, 1999 (the "FINAL OFFERING MEMORANDUM"),
each for use by the Initial Purchaser in connection with its solicitation of,
purchases of, or offering of, the Securities. "OFFERING MEMORANDUM" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
which has been prepared and delivered by the Issuers to the Initial Purchaser in
connection with their solicitation of, purchases of, or offering of, the
Securities. The Issuers hereby confirm that they have authorized the use of the
Offering Memorandum in connection with the offer and resale of the Securities by
the Initial Purchaser.
The holders of the Securities (including the Initial Purchaser and
subsequent transferees) will be entitled to the benefits of the registration
rights agreement (the "REGISTRATION RIGHTS AGREEMENT") to be dated as of the
Closing Time (as defined in Section 2(b) hereof), among the Company, the
Guarantors and the Initial Purchaser, pursuant to which the Issuers will agree
(i) unless the Exchange Offer (as defined in the Registration Rights Agreement)
would not be permitted by applicable law or Commission policy, to file, within
60 days of the Closing Time, a registration statement with the Commission
registering the Exchange Securities (as defined in the Registration Rights
Agreement) under the 1933 Act and to use their best efforts to cause such
registration statement to become effective within 180 days of the Closing Time
and (ii) under certain circumstances set forth therein, to file
-3-
with the Commission a shelf registration statement pursuant to Rule 415 under
the 1933 Act relating to the resale of the Securities by holders thereof or, if
applicable, relating to the resale of Private Exchange Securities (as defined in
the Registration Rights Agreement) by the Initial Purchaser pursuant to an
exchange of the Securities for Private Exchange Securities, and to use its best
efforts to cause such shelf registration statement to be declared effective.
At the Closing Time (or, in the case of the Champagne
Acquisition (as defined below), at or after the Closing Time), (i) the
Issuers will enter into an amendment (the "BANK AMENDMENT") to the Credit
Agreement, dated as of October 2, 1998, by and among the Company, D and W
Holdings, Inc., the Guarantors party thereto, the Lenders party thereto
from time to time, Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, as Lead Arranger, Syndication and Documentation Agent,
and BankBoston, N.A., as Administrative Agent (as amended, the "CREDIT
AGREEMENT"), permitting, among other things, the issuance of the
Securities and the consummation of the Acquisitions (as defined below) and
(ii) the Company will acquire all of the outstanding capital stock of
Heat, Inc. and H.I.G. Vinyl, Inc. (the "HEAT ACQUISITION") and Champagne
Industries, Inc. (the "CHAMPAGNE ACQUISITION") and, together with the Heat
Acquisition, the "ACQUISITIONS").
This agreement (this "AGREEMENT" or the "PURCHASE AGREEMENT"), the
Indenture, the Securities, the Exchange Securities, the Private Exchange
Securities, the Registration Rights Agreement, the Bank Amendment and the DTC
Agreement are referred to collectively as the "OPERATIVE DOCUMENTS."
SECTION 1. REPRESENTATIONS AND WARRANTIES BY THE ISSUERS.
(a) REPRESENTATIONS AND WARRANTIES. Each of the Issuers, jointly and
severally, represents and warrants to the Initial Purchaser as of the date
hereof and as of the Closing Time referred to in Section 2(b) hereof (after
giving effect to the Acquisitions and the Bank Amendment), and agrees with the
Initial Purchaser, as follows:
(i) SIMILAR OFFERINGS. Neither the Issuers nor any of their
respective affiliates, as such term is defined in Rule 501(b) under the
1933 Act (each, an "AFFILIATE"), has, directly or indirectly, solicited
any offer to buy, sold or offered to sell or otherwise negotiated in
respect of, or will solicit any offer to buy or offer to sell or otherwise
negotiate in respect of, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the
sale of the Securities in a manner that would require the Securities to be
registered under the 1933 Act.
-4-
(ii) OFFERING MEMORANDUM. The Preliminary Offering Memorandum as of
its date did not, and the Final Offering Memorandum as of the date hereof
does not, and at the Closing Time will not, include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED that this representation,
warranty and agreement shall not apply to statements in or omissions from
the Preliminary Offering Memorandum or the Final Offering Memorandum, as
applicable, made in reliance upon and in conformity with information
furnished to the Issuers in writing by or on behalf of the Initial
Purchaser expressly for use in the Offering Memorandum.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who audited the
financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the relevant
Issuer and its respective subsidiaries within the meaning of Regulation
S-X under the 1933 Act.
(iv) FINANCIAL STATEMENTS. The financial statements, together with
the related schedules and notes, included in the Offering Memorandum
present fairly the financial position of the relevant Issuer and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the relevant Issuer and
its consolidated subsidiaries for the periods specified; except as
disclosed therein, said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Offering Memorandum present fairly in
accordance with GAAP the information required to be stated therein. The
selected consolidated historical financial data and the summary historical
and pro forma financial data included in the Offering Memorandum present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Offering Memorandum. The pro forma financial statements and the related
notes thereto included in the Offering Memorandum present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the basis described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse
change, or any condition or event that has resulted or could reasonably be
expected to result in a material ad-
-5-
verse change, in the financial condition or in the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise
(a "MATERIAL ADVERSE EFFECT"), whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under the Operative Documents to which it is a party; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. The entities listed on SCHEDULE
B hereto are the only subsidiaries, direct or indirect, of the Company
(each a "SUBSIDIARY," and collectively, the "Subsidiaries"). Each
Subsidiary has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Offering Memorandum, all of
the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity (except for any security interest securing the Credit Agreement);
none of the outstanding shares of capital stock of the Subsidiaries was
issued in violation of any preemptive or similar rights of any
securityholder of such Subsidiary.
(viii) GUARANTORS. Each Subsidiary which is or will be a guarantor or
otherwise obligated under the Credit Agreement will be a Guarantor of the
Notes and is
-6-
listed on SCHEDULE A hereto. Each of the Guarantors has all requisite
corporate power and authority to enter into and perform its respective
obligations under the Operative Documents to which it is a party.
(ix) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the column entitled "Actual" under
the caption "Capitalization" in the Offering Memorandum and in the
financial statements, including the notes thereto, included in the
Offering Memorandum. All of the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of any preemptive or other
similar rights of any securityholder of the Company.
(x) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by each of the Issuers (other than
Heat, Inc. and H.I.G. Vinyl, Inc. and their respective subsidiaries and
Champagne Industries, Inc.). The Joinder Agreement will be duly
authorized, executed and delivered by each of Heat, Inc. and H.I.G. Vinyl,
Inc. and their respective subsidiaries and, if the Champagne Acquisition
shall have been consummated on or prior to the Closing Time, Champagne
Industries, Inc.
(xi) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly
authorized by each of the Issuers, and, at the Closing Time, will have
been duly executed and delivered by each of the Issuers and (assuming the
due authorization, execution and delivery thereof by the Trustee) will
constitute a valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xii) AUTHORIZATION OF THE REGISTRATION RIGHTS AGREEMENT. The
Registration Rights Agreement has been duly authorized by each of the
Issuers, and, at the Closing Time, will have been duly executed and
delivered by each of the Issuers and (assuming the due authorization,
execution and delivery thereof by the Initial Purchaser) will constitute a
valid and binding agreement of each of the Issuers, enforceable against
each of the Issuers in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement
-7-
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
as rights to indemnity and contribution thereunder may be limited by
Federal and state securities laws.
(xiii) AUTHORIZATION OF THE SECURITIES. The Notes, the Exchange
Securities and the Private Exchange Securities, if any, have been duly
authorized by the Company; the Guarantees have been duly authorized by
each of the Guarantors and each of the Guarantors has all requisite
corporate power and authority to execute, issue and deliver the Guarantees
and to incur and perform its obligations provided for therein. At the
Closing Time, the Notes will have been duly executed by the Company and,
when authenticated, issued and delivered in the manner provided for in the
Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trustee) and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws or affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture. At the Closing Time, the Guarantees of each Guarantor will
have been duly endorsed on the Notes by each such Guarantor and, when the
Securities are authenticated, issued and delivered in the manner provided
for in the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee) and delivered against payment of
the purchase price therefor as provided in this Agreement, upon such
endorsement, the Guarantees will constitute valid and binding obligations
of the Guarantors, enforceable against the Guarantors in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws or
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture. The Exchange Securities and the Private Exchange
Securities, if any, when executed, authenticated, issued, endorsed and
delivered (assuming the due authorization, execution and delivery of the
Indenture by the Trustee) in exchange for the Securities pursuant to the
Exchange Offer (as defined in the Registration Rights Agreement), will
constitute valid and binding obligations of each of the Issuers,
enforceable against each of the Issuers in accordance with their terms,
except as the
-8-
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws or affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(xiv) AUTHORIZATION OF THE BANK AMENDMENT. The Bank Amendment
has been duly authorized by each of the Issuers (other than Heat,
Inc. and H.I.G. Vinyl, Inc. and their respective subsidiaries and
Champagne Industries, Inc.), and, at the Closing Time, will have
been duly executed and delivered by each of the Issuers (other than
Heat, Inc. and H.I.G. Vinyl, Inc. and their respective subsidiaries
and Champagne Industries, Inc.).
(xv) DESCRIPTION OF THE OPERATIVE DOCUMENTS AND THE CREDIT
AGREEMENT. The Securities, the Exchange Securities, the Private Exchange
Securities, if any, the Indenture, the Registration Rights Agreement and
the Bank Amendment will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum and will
be substantially in the respective forms previously delivered to the
Initial Purchaser. The Credit Agreement conforms in all material respects
to the statements relating thereto contained in the Offering Memorandum.
(xvi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which or any or them may be bound, or to which any of the property or
assets of the Company or any of its Subsidiaries is subject (collectively,
"AGREEMENTS AND INSTRUMENTS"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Registration Rights
Agreement, the Bank Amendment and the Securities and any other agreement
or instrument entered into or issued or to be entered into or issued by
the Company or the Guarantors in connection with the transactions
contemplated hereby or thereby or in connection with the Acquisitions and
the consummation of the transactions contemplated herein (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Offering Memorandum under the
caption "Use of Proceeds") and compliance by each of the Issuers with its
respective obligations hereunder do not and will not, whether with or
without the giving of notice or pas-
-9-
sage of time or both, conflict with or constitute a breach of, or default
or a Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to the
Agreements and Instruments, except for such conflicts, breaches or
defaults or liens, charges or encumbrances that are cured prior to the
Closing Time or that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its Subsidiaries or any of their assets or properties. As used herein, a
"REPAYMENT EVENT" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right, pursuant to the express written
provisions thereof, to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its
Subsidiaries.
(xvii) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of the Company or any of its Subsidiaries exists or, to the knowledge of
any of the Issuers, is imminent, and none of the Issuers is aware of any
existing or imminent labor disturbance by the employees of any of its or
any of the Subsidiaries' principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to result
in a Material Adverse Effect.
(xviii) ABSENCE OF PROCEEDINGS. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or investigation
before or by any court or government agency or body, domestic or foreign,
now pending, or, to the knowledge of any of the Issuers, threatened,
against or affecting the Company or any of its Subsidiaries which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of the Company or any of its Subsidiaries or the
consummation of the transactions contemplated by this Agreement or the
performance by the Issuers of their obligations under the Operative
Documents. The aggregate of all pending legal or governmental proceedings
to which the Company or any of its Subsidiaries is a party or of which any
of their respective property or assets is the subject which are not
described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xix) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent
-10-
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"INTELLECTUAL PROPERTY") necessary to carry on the business now operated
by them, and neither the Company nor any of its Subsidiaries has received
any notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of its
Subsidiaries therein, and which infringement or conflict (if the subject
of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(xx) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Issuers of their
obligations hereunder, in connection with the offering, issuance or sale
of the Securities, the Exchange Securities or the Private Exchange
Securities, for the performance by the Issuers of their respective
obligations under the Operative Documents, or the consummation of the
transactions contemplated hereby or thereby or for the due execution,
delivery or performance by the Issuers of any of the Operative Documents,
except as may be required (A) in connection with the registration of the
Exchange Securities or the Private Exchange Securities under the 1933 Act
or the qualification of the Indenture under the 1939 Act (as defined
below), in each case pursuant to the Registration Rights Agreement or (B)
pursuant to state securities or "blue sky" laws.
(xxi) POSSESSION OF LICENSES AND PERMITS. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to possess such Governmental Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate,
-11-
if the subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect.
(xxii) TITLE TO PROPERTY. The Company and its Subsidiaries have good
and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Offering Memorandum or securing the Credit Agreement or
(b) do not, singly or in the aggregate, materially affect the value of
such property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its Subsidiaries; and all
of the leases and subleases material to the business of the Company and
its Subsidiaries, considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in the
Offering Memorandum, are in full force and effect, and neither the Company
nor any of its Subsidiaries has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any of its Subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or any of its
Subsidiaries to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxiii) ENVIRONMENTAL LAWS. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its Subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health,
the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (B)
the Company and its Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation, or proceedings relating to any Environmental Law against
the Company or any of its Subsidiaries, (D) there are no events or circum-
-12-
stances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or
Environmental Laws and (E) neither the Company nor any of its Subsidiaries
has assumed by contract or agreement any liabilities or obligations
arising under any Environmental Law including, without limitation, any
such liabilities or obligations with respect to formerly owned, leased or
operated real property or facilities, or former divisions or subsidiaries.
(xxiv) ERISA COMPLIANCE. Except as described in the Offering
Memorandum, none of the Company nor any of its Subsidiaries has incurred
any liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which the Company or
any of its Subsidiaries makes or ever has made a contribution and in which
any employee of the Company or any Subsidiary is or has ever been a
participant, which, individually in the aggregate, could reasonably be
expected to have or result in a Material Adverse Effect. With respect to
such plans, each of the Company and its Subsidiaries is in compliance in
all respects with all applicable provisions of ERISA, except where the
failure to so comply could not, individually or in the aggregate,
reasonably be expected to have or a result in a Material Adverse Effect.
(xxv) TAX RETURNS. The Company and its Subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes
required to be paid by any of them and any related assessments, fines or
penalties, except for any such tax, assessment, fine or penalty that is
being contested in good faith and by appropriate proceedings and for which
adequate reserves have been made in accordance with GAAP; and adequate
charges, accruals and reserves have been provided for in the financial
statements included in the Offering Memorandum in respect of all federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company or any of its Subsidiaries has not been finally
determined or remains open to examination by applicable taxing
authorities.
(xxvi) INSURANCE. The Company and its Subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and
effect.
-13-
(xxvii) SOLVENCY. Each of the Issuers is, and immediately after the
Closing Time will be, Solvent. As used herein, the term "Solvent" means,
with respect to each Issuer, on a particular date, that on such date (A)
the fair market value of the assets of each Issuer is greater than the
total amount of its liabilities (including contingent liabilities) of such
Issuer, (B) the present fair salable value of the assets of each Issuer is
greater than the amount that will be required to pay its probable
liabilities of such Issuer on its debts as they become absolute and
mature, (C) each of the Issuers is able to realize upon its assets and pay
its debts and other liabilities, including contingent obligations, as they
mature, and (D) each Issuer does not have unreasonably small capital.
(xxviii) CONTRACTS. All descriptions in the Offering Memorandum of
contracts and other documents to which the Company or any of its
Subsidiaries are a party are accurate in all material respects; there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments that would be required to be described in a
registration statement on Form S-1 under the 1933 Act that are not
described or referred to in the Offering Memorandum, and the descriptions
thereof or references thereto are correct and fairly and accurately
summarize such agreements and instruments in all material respects.
(xxix) STATISTICAL MARKET-RELATED DATA. The statistical and
market-related data included in the Offering Memorandum are based on or
derived from independent sources which the Issuers believe to be reliable
in all material respects or represent the Issuers' good faith estimates.
(xxx) COMPLIANCE WITH FLORIDA ACT. Each of the Company and its
Subsidiaries has complied with, and is and will, at the Closing Time, be
in compliance with, the provisions of Section 517.075 of the Florida
statutes, relating to doing business with or in Cuba.
(xxxi) INVESTMENT COMPANY ACT. None of the Issuers is, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum, none will be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended (the "1940 ACT").
(xxxii) RULE 144A ELIGIBILITY. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same
class as securities listed on a national securities exchange registered
under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer
quotation system.
-14-
(xxxiii) NO GENERAL SOLICITATION. None of the Issuers, any of their
respective Affiliates or any person acting on its or any of their behalf
(other than the Initial Purchaser, as to whom the Issuers make no
representation) has engaged or will engage, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act.
(xxxiv) NO REGISTRATION REQUIRED. Subject to compliance by the Initial
Purchaser with the representations and warranties and the procedures set
forth in Section 6 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchaser and to
each Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Securities under the 1933 Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "1939 ACT").
(xxxv) NO DIRECTED SELLING EFFORTS. With respect to those Securities
sold in reliance on Regulation S, (A) none of the Company, its Affiliates
or any person acting on its or their behalf (other than the Initial
Purchaser, as to whom the Issuers make no representation) has engaged or
will engage in any directed selling efforts within the meaning of
Regulation S and (B) each of the Issuers and their Affiliates and any
person acting on their behalf (other than the Initial Purchaser, as to
whom the Issuers make no representation) has complied and will comply with
the offering restrictions requirement of Regulation S.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
any of the Issuers delivered to the Initial Purchaser or to counsel for the
Initial Purchaser shall be deemed a representation and warranty by each of the
Issuers to the Initial Purchaser as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASER; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, the Notes, at a purchase price of 95.996%
of the principal amount thereof. Each of the Guarantors will issue its Guarantee
at the time of issuance and sale of the Notes.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other
place as shall be agreed upon by the Initial Purchaser and the Company, at 9:00
A.M. (eastern time) on the fifth business
-15-
day after the date hereof, or such other time not later than ten business days
after such date as shall be agreed upon by the Initial Purchaser and the Company
(such time and date of payment and delivery being herein called the "CLOSING
TIME").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Initial Purchaser of certificates for the Securities to be purchased by it.
(c) QUALIFIED INSTITUTIONAL BUYER. The Initial Purchaser represents
and warrants to, and agrees with, the Issuers that it is a "qualified
institutional buyer" within the meaning of Rule 144A under the 1933 Act (a
"QUALIFIED INSTITUTIONAL BUYER").
(d) DENOMINATIONS; REGISTRATION. Certificates representing the Notes
shall be in such denominations ($1,000 or integral multiples thereof) and
registered in such names as the Initial Purchaser may request in writing at
least one full business day before the Closing Time. The certificates
representing the Notes shall be registered in the name of Cede & Co. pursuant to
the DTC Agreement and shall be made available for examination by the Initial
Purchaser in The City of New York not later than 10:00 A.M. on the last business
day prior to the Closing Time.
SECTION 3. COVENANTS OF THE ISSUERS. Each of the Issuers, jointly
and severally, covenants with the Initial Purchaser as follows:
(a) OFFERING MEMORANDUM. The Issuers, as promptly as possible, will
furnish to the Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto as the Initial Purchaser may reasonably
request.
(b) NOTICE AND EFFECT OF MATERIAL EVENTS. The Issuers will
immediately notify the Initial Purchaser, and confirm such notice in writing, of
(x) any filing made by any Issuer of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchaser as evidenced by a notice in
writing from the Initial Purchaser to the Company, any material changes, or any
condition or event that has resulted or could reasonably be expected to result
in a material change, in or affecting the financial condition or the earnings or
business affairs of the Company and its Subsidiaries which (i) make any
statement in the Offering Memorandum false or misleading or (ii) are not
disclosed in the Offering Memorandum. In such event or if during such time any
event shall occur as a result of which it is necessary, in the reasonable
opinion of the Company, its counsel, the Initial Purchaser or counsel for the
Initial Purchaser, to amend or supplement the Final Offering Memorandum in order
that the Final
-16-
Offering Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Issuers will
forthwith amend or supplement the Final Offering Memorandum by preparing and
furnishing, at the expense of the Issuers, to the Initial Purchaser an amendment
or amendments of, or a supplement or supplements to, the Final Offering
Memorandum (in form and substance satisfactory in the reasonable opinion of
counsel for the Initial Purchaser) so that, as so amended or supplemented, the
Final Offering Memorandum will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a Subsequent Purchaser, not misleading. The Issuers will furnish to the
Initial Purchaser such number of copies of such amendment or supplement as the
Initial Purchaser may reasonably request. The Company agrees to notify the
Initial Purchaser in writing to suspend use of the Offering Memorandum as
promptly as practicable after the occurrence of an event specified in the second
immediately preceding sentence of this paragraph (b), and the Initial Purchaser
hereby agrees upon receipt of such notice from the Company to suspend use of the
Offering Memorandum until the Issuers have amended or supplemented the Offering
Memorandum to correct such misstatement or omission or to effect such
compliance.
(c) AMENDMENT TO OFFERING MEMORANDUM AND SUPPLEMENTS. The Issuers
will advise the Initial Purchaser promptly of any proposal to amend or
supplement the Offering Memorandum and will not effect such amendment or
supplement without the consent of the Initial Purchaser (which consent shall not
be unreasonably withheld). Neither the consent of the Initial Purchaser, nor the
Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) QUALIFICATION OF SECURITIES FOR OFFER AND SALE. The Issuers will
use their respective best efforts, in cooperation with the Initial Purchaser, to
qualify the Securities for offering and sale under the applicable securities
laws of such jurisdictions as the Initial Purchaser may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; PROVIDED, HOWEVER, that no Issuer shall be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. The Issuers will file such statements
and reports as may be required by the laws of each jurisdiction in which the
Securities have been qualified as above provided. The Issuers shall promptly
advise the Initial Purchaser of the receipt by any Issuer of any notification
with respect to the suspension of the qualification or exemption from
qualification of the Securities for offering or sale in any jurisdiction or the
institution, threatening or contemplation of any proceeding for such purpose.
-17-
(e) RATING OF SECURITIES. The Issuers shall take all reasonable
action necessary to enable Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc. ("S&P"), and Xxxxx'x Investors Service Inc. ("MOODY'S") to
provide their respective credit ratings of the Securities.
(f) DTC. The Issuers will cooperate with the Initial Purchaser and
use their best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(g) USE OF PROCEEDS. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds."
(h) RESTRICTION OF SALE OF SECURITIES. During a period of 120 days
from the date of the Final Offering Memorandum, the Issuers will not, without
the prior written consent of the Initial Purchaser, directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any contract or option to sell, grant any option, right, or warrant for
the sale of, or otherwise dispose of or transfer, any other debt securities of
any of the Issuers or securities of any of the Issuers that are convertible
into, or exchangeable for, the Securities or such other debt securities, or,
except as provided in the Registration Rights Agreement, file a registration
statement under the 1933 Act with respect to the foregoing.
(i) PORTAL DESIGNATION. The Issuers will use their respective best
efforts to permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market.
(j) PERIODIC REPORTS. For so long as the Securities or Exchange
Securities or Private Exchange Securities are outstanding, the Company will
furnish to the Initial Purchaser copies of all documents, reports, forms and
information required to be delivered to holders of Notes as set forth in the
Indenture.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, the Issuers agree, jointly and severally, to pay all
expenses incident to the performance of their obligations under this Agreement,
including (i) the preparation and printing of the Preliminary Offering
Memorandum and the Final Offering Memorandum (including financial statements and
any schedules) and of each amendment or supplement thereto (but excluding the
fees and disbursements of counsel to the Initial Purchaser in
-18-
connection therewith), (ii) the preparation, printing and delivery to the
Initial Purchaser of this Agreement, the Indenture, the Registration Rights
Agreement, the DTC Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities (but excluding the fees and disbursements of counsel to the Initial
Purchaser in connection therewith), (iii) the preparation, issuance and delivery
of the certificates for the Securities to the Initial Purchaser, including any
charges of DTC in connection therewith (but excluding the fees and disbursements
of counsel to the Initial Purchaser in connection therewith), (iv) the fees and
disbursements of the Issuers' counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial Purchaser in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto and any Legal Investment Survey, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities, (vii)
any fees payable in connection with the rating of the Securities, (viii) any
fees and expenses payable in connection with the initial and continued
designation of the Securities as PORTAL securities under the PORTAL Market Rules
and to permit the Securities, the Exchange Securities and the Private Exchange
Securities to be eligible for clearance through DTC, and (ix) all expenses
(including travel expenses, provided that the costs of any chartered airplane
shall be split evenly with the Initial Purchaser) of the Issuers in connection
with any meetings with prospective investors in the Securities.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Issuers, jointly and severally, shall reimburse the Initial
Purchaser for all of their out-of-pocket expenses incurred in connection with
the transactions contemplated by this Agreement, including the reasonable fees
and disbursements of counsel for the Initial Purchaser.
SECTION 5. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The
obligations of the Initial Purchaser hereunder are subject to the accuracy of
the representations and warranties of the Issuers contained in Section 1 hereof
or in certificates of any officer of any Issuer delivered pursuant to the
provisions hereof, to the performance by the Issuers of their covenants and
other obligations hereunder and to the following further conditions:
(a) OPINIONS OF COUNSEL FOR ISSUERS. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of each of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, Xxxxx, Xxxxx &
Xxxxxx, Sirotte and Permutte, and Xxxxxxxx & Xxxxxxxxx, counsel for the Issuers,
in the form and substance covering in total the items set forth below and
otherwise reasonably satisfactory to the Initial Purchaser and counsel for the
Initial Purchaser to the effect that:
-19-
(1) Each of the Company and its Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective state of incorporation, with corporate
power and authority to own, lease and operate its assets and properties
and conduct its business as described in the Offering Memorandum;
(2) Each of the Issuers has the corporate power and authority to
enter into and perform its obligations under each of the Operative
Documents to which it is a party;
(3) Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect;
(4) The authorized, issued and outstanding capital stock of the
Company is as set forth in the caption entitled "Capitalization" under the
column entitled "Actual" in the Offering Memorandum;
(5) All of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and, except as set forth in the Offering Memorandum, is
owned by the Company, directly or through Subsidiaries, and in the case of
each Subsidiary, (i) based solely on the results of a lien search by a
third party search service at the Office of the Secretary of State of the
state of incorporation of such Subsidiary and without any independent
investigation of such counsel and (ii) assuming all of the issued and
outstanding capital stock of such Subsidiary is in the possession of the
Administrative Agent (as defined in the Credit Agreement) in the State of
New York, on behalf of the Secured Parties (as defined in the Credit
Agreement), pursuant to the Credit Agreement, is free and clear of any
perfected security interest under the Uniform Commercial Code as in effect
in the State of New York (except any security interest securing the Credit
Agreement);
(6) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of any federal or relevant
state court or governmental authority or agency is necessary or required
for the execution and delivery by each of the Issuers of this Agreement,
the Indenture, the Registration Rights Agreement, the Bank Amendment or
the DTC Agreement or for the offering, issuance, sale and delivery of the
Securities, the resale of the Securities by the Initial Purchaser in
accordance with this Agreement, the issuance of the Exchange Securi-
-20-
ties or the Private Exchange Securities, if any, or the performance by the
Issuers of their obligations under the Operative Documents, or for the
consummation of any of the transactions contemplated hereby or thereby,
except such as may be required (A) in connection with the registration
under the 1933 Act of the Exchange Securities or the Private Exchange
Securities, if any, under the Registration Rights Agreement, (B) in order
to qualify the Indenture under the Trust Indenture Act and (C) by state
securities or "blue sky" laws in connection with the purchase and
distribution of the Securities by the Initial Purchaser (as to which such
counsel need not express an opinion);
(7) The issuance, sale and delivery of the Securities, the Exchange
Securities and the Private Exchange Securities, if any, the execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the Indenture, the Bank Amendment, the DTC Agreement and the
Securities and the consummation of the transactions contemplated in the
Operative Documents and in connection with the Acquisitions (including the
use of the proceeds from the sale of the Securities as described in the
Offering Memorandum under the caption "Use of Proceeds") and compliance by
the Issuers with their obligations under the Operative Documents will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event
under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to the Agreements or Instruments known to such
counsel (which include, without limitation, all Agreements or Instruments
publicly filed by the Company) (except for such conflicts, breaches,
defaults or liens, charges or encumbrances that are cured prior to the
Closing Time or that would not have a Material Adverse Effect) nor will
such action result in any violation of the provisions of (i) the charter
or by-laws of the Company or its Subsidiaries, (ii) any applicable law,
statute, rule or regulation of the United States or the State of New York
(except for such violations that would not have a Material Adverse
Effect), or (iii) any judgment, order, writ or decree binding on the
Company or any of its Subsidiaries and known to such counsel of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of the Guarantors or any of
their respective properties, assets or operations;
(8) The Securities, the Exchange Securities, the Private Exchange
Securities, the Registration Rights Agreement, the Indenture and the
Credit Agreement conform in all material respects to the descriptions
thereof contained in the Offering Memorandum;
-21-
(9) The Purchase Agreement has been duly authorized,
executed and delivered by each of the Issuers (other than Heat, Inc.
and H.I.G. Vinyl, Inc. and their respective subsidiaries and
Champagne Industries, Inc.);
(10) The Joinder Agreement has been duly authorized, executed
and delivered by each of Heat, Inc. and H.I.G. Vinyl, Inc. and their
respective subsidiaries and, if the Champagne Acquisition shall have
been consummated on or prior to the Closing Time, Champagne
Industries, Inc.;
(11) The Indenture has been duly authorized, executed and delivered
by each of the Issuers and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes a valid and binding agreement
of each of the Issuers, enforceable against each of the Issuers in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally and
except as the enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law);
(12) The Registration Rights Agreement has been duly authorized,
executed and delivered by each of the Issuers and (assuming the due
authorization, execution and delivery thereof by the Initial Purchaser)
constitutes a valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
as rights to indemnity and contribution thereunder may be limited by
Federal or state securities laws or principles of public policy;
(13) The Notes are in the form contemplated by the Indenture and
have been duly authorized and executed by the Company and when
authenticated by the Trustee in the manner provided in the Indenture
(assuming the due authorization, execution and delivery of the Indenture
by the Trustee and assuming the due authentication of the Notes by the
Trustee) and delivered against payment of the purchase price therefor in
accordance with this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar
-22-
laws affecting enforcement of creditors' rights generally and except as
the enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law);
(14) The Guarantees are in the form contemplated by the Indenture
and have been duly authorized and executed by each of the Guarantors and,
when delivered by each of the Guarantors in accordance with the provisions
of the Indenture (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and assuming the due authentication of the
Notes by the Trustee), will constitute valid and binding obligations of
each of the Guarantors, enforceable against each of the Guarantors in
accordance with their terms and entitled to the benefits of the Indenture,
except as such enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and except as the enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(15) The Exchange Securities and the Private Exchange Securities
have been duly authorized by the Issuers and, when executed or endorsed,
as applicable, by each of the Issuers and authenticated by the Trustee in
the manner provided for in the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and assuming due
authentication of the Exchange Securities and Private Exchange Securities
by the Trustee) and delivered in exchange for the Securities in accordance
with the terms of the Registration Rights Agreement, will constitute valid
and binding obligations of each of the Issuers, enforceable against each
of the Issuers in accordance with their terms and entitled to the benefits
of the Indenture, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and except as the
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
(16) The Bank Amendment has been duly authorized, executed
and delivered by each of the Issuers (other than Heat, Inc. and
H.I.G. Vinyl, Inc. and their respective subsidiaries and Champagne
Industries, Inc.);
(17) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries of a character
-23-
required to be disclosed in a prospectus pursuant to the 1933 Act if the
Notes were registered thereunder, except as set forth in the Offering
Memorandum;
(18) Assuming that the representations and warranties of the Initial
Purchaser contained in Section 6 of this Agreement and the representations
and warranties of the Company contained in Sections 1(a)(i) and
1(a)(xxxiii) of this Agreement are true, correct and complete, and
assuming compliance by the Initial Purchaser with its covenants in Section
6 of this Agreement, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial Purchaser under, or in
connection with the initial resale of such Securities by the Initial
Purchaser in accordance with, this Agreement to register the Securities
under the 1933 Act or to qualify the Indenture under the 1939 Act;
(19) None of the Issuers is an "investment company" or required to
register as an investment company as such term is defined in the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder; and
(20) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the
meaning of Rule 144A) as securities of the Company which are listed on a
national securities exchange registered under Section 6 of the 1934 Act or
quoted in a U.S. automated inter-dealer quotation system.
In addition such counsel shall state that such counsel has
participated in conferences with representatives of the Initial Purchaser,
officers and other representatives of the Company and its Subsidiaries and
representatives of the independent certified public accountants of the
Company and its Subsidiaries, at which conferences the contents of the
Offering Memorandum and the business and affairs of the Company and its
Subsidiaries were discussed, and although such counsel does not pass upon
or assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum (except and only to
the extent set forth in subclause (8) above), on the basis of the
foregoing, no facts have come to the attention of such counsel which lead
such counsel to believe that the Offering Memorandum at the date thereof
or as of the Closing Time, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
not express any comment with respect to the financial statements,
including the notes thereto and supporting schedules, or any other
financial data set forth or referred to in the Offering Memorandum).
-24-
In rendering such opinions, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper on
representations or certificates of responsible officers of the Issuers and
certificates of public officials.
References to the Offering Memorandum in this subsection (a) include
any supplements thereto at or prior to the Closing Time.
(b) OPINION OF COUNSEL FOR INITIAL PURCHASER. At the Closing Time,
the Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchaser in
form and substance reasonably satisfactory to the Initial Purchaser. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the Federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Initial Purchaser. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its Subsidiaries and certificates of public officials.
(c) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change, or
any condition or event that has resulted or could reasonably be expected to
result in a material adverse change, in the financial condition or in the
earnings or business affairs of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Initial Purchaser shall have received a certificate of an Executive Vice
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company and the similar officials of each of the
Guarantors, dated as of the Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) each of the Company and
the Guarantors has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Time.
(d) ACCOUNTANTS' COMFORT LETTER. At the time of the execution of
this Agreement, the Initial Purchaser shall have received from each of
PricewaterhouseCoopers LLP and Xxxxxx Xxxxxxxx LLP, a letter dated such date, in
form and substance reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser containing statements and information of the type
ordinarily included in accountants' "comfort letters" to Initial Purchaser with
respect to the financial statements and certain financial information contained
in the Offering Memorandum.
-25-
(e) BRING-DOWN COMFORT LETTER. At the Closing Time, the Initial
Purchaser shall have received from each of PricewaterhouseCoopers LLP and Xxxxxx
Xxxxxxxx LLP, a letter dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (d)
of this Section as of the Closing Time, except that the specified dates referred
to shall be dated not more than three business days prior to the Closing Time.
(f) MAINTENANCE OF RATING. At the Closing Time, the Securities shall
be rated at least BBB by Xxxxx'x Investors Service Inc. and B by Standard &
Poor's Ratings Services, and the Issuers shall have delivered to the Initial
Purchaser a letter dated the Closing Time, from each such rating agency, or
other evidence satisfactory to the Initial Purchaser, confirming that the
Securities have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the Securities or any
of the other debt securities of any of the Issuers by any "nationally recognized
statistical rating agency," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Securities or any of the
other debt securities of any of the Issuers.
(g) PORTAL. At the Closing Time, the Securities shall have been
designated for trading on PORTAL.
(h) INDENTURE. Each of the Issuers and the Trustee shall have
entered into the Indenture, in form and substance satisfactory to the Initial
Purchaser and counsel to the Initial Purchaser.
(i) REGISTRATION RIGHTS AGREEMENT. Each of the Issuers and the
Initial Purchaser shall have entered into the Registration Rights Agreement, in
form and substance satisfactory to the Initial Purchaser and counsel to the
Initial Purchaser.
(j) BANK AMENDMENT. Each of the Issuers and the requisite lenders
under the Credit Agreement shall have entered into the Bank Amendment in form
and substance reasonably satisfactory to the Initial Purchaser in order for the
Issuers to execute, deliver and perform their obligations under the Securities
and the Indenture and consummate the Acquisitions without any conflict or
default under the Credit Agreement.
(k) HEAT ACQUISITION; JOINDER AGREEMENT. The Heat
Acquisition shall have been or shall simultaneously with the Closing Time
be consummated in accordance with the terms described in the Offering
Memorandum and the terms of the definitive agreements with respect thereto
previously provided to the Initial Purchaser (as in effect at such time
provided to the Initial Purchaser); each of Heat, Inc. and H.I.G. Vinyl,
Inc. and their re-
-26-
spective subsidiaries and, if the Champagne Acquisition shall have been
consummated, Champagne Industries, Inc., shall have become parties to this
Agreement as a Guarantor pursuant to the Joinder Agreement.
(l) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Initial Purchaser shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Issuers in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Initial Purchaser and counsel for the Initial Purchaser.
(m) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7, 8, 9 and 14 shall survive any such termination and
remain in full force and effect.
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES.
(a) OFFER AND SALE PROCEDURES. The Initial Purchaser represents and
agrees to observe the following procedures in connection with the offer and sale
of the Securities:
(i) OFFERS AND SALES ONLY TO QUALIFIED INSTITUTIONAL BUYERS OR
NON-U.S. PERSONS. Offers and sales of the Securities shall only be made
(A) to persons whom the offeror or seller reasonably believes to be
Qualified Institutional Buyers or (B) to non-U.S. persons outside the
United States, as defined in Regulation S under the 1933 Act, to whom the
offeror or seller reasonably believes offers and sale of the Securities
may be made in reliance upon Regulation S under the 1933 Act.
(ii) NO GENERAL SOLICITATION. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 0000 Xxx) will be
used in the United States in connection with the offering or sale of the
Securities.
(iii) PURCHASES BY NON-BANK FIDUCIARIES. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the Initial
Purchaser, be a Qualified Institutional Buyer or a non-U.S. person outside
the United States.
-27-
(iv) SUBSEQUENT PURCHASER NOTIFICATION. The Initial Purchaser will
take reasonable steps to inform, and cause each of its affiliates to take
reasonable steps to inform, persons acquiring Securities from the Initial
Purchaser or such affiliate, as the case may be, that the Securities (A)
have not been and will not be registered under the 1933 Act, (B) are being
sold to them without registration under the 1933 Act in reliance on Rule
144A or in accordance with another exemption from registration under the
1933 Act, as the case may be, and (C) may not be offered, sold or
otherwise transferred except (1) to the Company, (2) outside the United
States in accordance with Regulation S, or (3) inside the United States in
accordance with (x) Rule 144A to a person who the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or
transfer is being made in reliance on Rule 144A or (y) pursuant to another
available exemption from registration under the 1933 Act.
(v) MINIMUM PRINCIPAL AMOUNT. No sale of the Notes to any one
Subsequent Purchaser will be for less than U.S. $1,000 principal amount
and no Note will be issued in a smaller principal amount. If the
Subsequent Purchaser is a non-bank fiduciary acting on behalf of others,
each person for whom it is acting must purchase at least U.S. $1,000
principal amount of the Notes.
(vi) RESTRICTIONS ON TRANSFER. The transfer restrictions and the
other provisions set forth in Section Two of the Indenture, including the
legend required thereby, shall apply to the Securities except as otherwise
agreed by the Company and the Initial Purchaser. Following the sale of the
Securities by the Initial Purchaser to Subsequent Purchasers pursuant to
and in compliance with the terms hereof, the Initial Purchaser shall not
be liable or responsible to the Issuers for any losses, damages or
liabilities suffered or incurred by the Issuers, including any losses,
damages or liabilities under the 1933 Act, arising from or relating to any
resale or transfer of any Security occurring after such sale by the
Initial Purchaser.
(vii) DELIVERY OF OFFERING MEMORANDUM. The Initial Purchaser will
deliver to each purchaser of the Securities from the Initial Purchaser, in
connection with its original distribution of the Securities, a copy of the
Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) COVENANTS OF THE ISSUERS. Each of the Issuers, jointly and
severally, covenant with the Initial Purchaser as follows:
(i) DUE DILIGENCE. In connection with the original distribution of
the Securities, the Issuers agree that, prior to any offer or resale of
the Securities by the
-28-
Initial Purchaser, the Initial Purchaser and counsel for the Initial
Purchaser shall have the right to make reasonable inquiries into the
business of the Issuers and their Subsidiaries. The Issuers also agree to
provide answers to each prospective Subsequent Purchaser of Securities who
so requests concerning the Issuers and their Subsidiaries (to the extent
that such information is available or can be acquired and made available
to prospective Subsequent Purchasers without unreasonable effort or
expense and to the extent the provision thereof is not prohibited by
applicable law) and the terms and conditions of the offering of the
Securities, as provided in the Offering Memorandum.
(ii) INTEGRATION. Each of the Issuers agrees that it will not and
will cause its Affiliates not to solicit any offer to buy or make any
offer or sale of, or otherwise negotiate in respect of, securities of any
of the Issuers of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act, such offer or
sale would render invalid (for the purpose of (i) the sale of the
Securities by the Issuers to the Initial Purchaser, (ii) the resale of the
Securities by the Initial Purchaser to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided by
Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(iii) RULE 144A INFORMATION. The Issuers agree that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, they will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Issuers furnish information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "ADDITIONAL INFORMATION").
(iv) RESTRICTION ON REPURCHASES. Until the expiration of two years
after the original issuance of the Securities, the Issuers will not, and
will cause their Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited broker's transactions).
(c) RESALE PURSUANT TO RULE 903 OF REGULATION S OR RULE 144A. The
Initial Purchaser understands that the Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account
-29-
or benefit of, U.S. persons except in accordance with Regulation S under the
1933 Act or pursuant to an exemption from the registration requirements of the
1933 Act. The Initial Purchaser represents and agrees, that, except as permitted
by Section 6(a) above, it has offered and sold Securities and will offer and
sell Securities (i) as part of its distribution at any time and (ii) otherwise
until forty days after the later of the date upon which the offering of the
Securities commences and the Closing Time, in each case only in accordance with
Rule 903 of Regulation S, or another applicable exemption from the registration
provisions of the 1933 Act or Rule 144A under the 1933 Act. Accordingly, neither
the Initial Purchaser, its affiliates nor any persons acting on its behalf have
engaged or will engage in any directed selling efforts with respect to
Securities, and the Initial Purchaser, its affiliates and any person acting on
its behalf have complied and will comply with the offering restriction
requirements of Regulation S. The Initial Purchaser agrees that, at or prior to
confirmation of a sale of Securities (other than a sale of Securities 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 or through it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the United
States Securities Act of 1933 (the "SECURITIES ACT") and may not be
offered or sold within the United States or to or for the account or
benefit of U.S. persons (i) as part of their distribution at any time and
(ii) otherwise until forty days after the later of the date upon which the
offering of the Securities commenced and the date of closing, except in
either case in accordance with Regulation S, Rule 144A under the
Securities Act or another exemption from the registration requirements of
the 1933 Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in the above paragraph have the meanings given to them by Regulation
S.
SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION OF INITIAL PURCHASER. The Issuers agree, jointly
and severally, to indemnify and hold harmless the Initial Purchaser and each
person, if any, who controls the Initial Purchaser within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or
-30-
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; PROVIDED that (subject to Section
7(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished to the Company by or on behalf
of the Initial Purchaser in writing expressly for use in the Offering Memorandum
(or any amendment thereto) and PROVIDED, FURTHER, that the Issuers will not be
liable to the Initial Purchaser hereunder with respect to any such loss,
liability, claim, damage or expense that resulted from the fact that the Initial
Purchaser sold Securities to a person to whom the Initial Purchaser failed to
send or give, at or prior to the Closing Time, a copy of the Final Offering
Memorandum, as then amended or supplemented, if the Issuers have previously
furnished copies thereof (sufficiently in advance of the Closing Time to allow
for distribution by the Closing Time) to the Initial Purchaser and the loss,
liability, claim, damage or expense of the Initial Purchaser resulted from an
untrue statement or omission or alleged untrue statement or omission of a
material fact contained in or omitted from the Preliminary Offering Memorandum
that was corrected in the Final Offering Memorandum or, if applicable, amended
or supplemented prior to the Closing Time.
(b) INDEMNIFICATION OF ISSUERS, DIRECTORS AND OFFICERS. The Initial
Purchaser agrees to indemnify and hold harmless the Issuers and each person, if
any, who controls the Issuers within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity
-31-
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Offering Memorandum in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of the Initial
Purchaser expressly for use in the Offering Memorandum.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding 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) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered
-32-
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. CONTRIBUTION. If the indemnification provided for in
Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and the Initial Purchaser on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Issuers on the one hand and of the
Initial Purchaser on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers on the one hand and
the Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Issuers and the total underwriting discount received by the Initial
Purchaser, bear to the aggregate initial offering price of the Securities.
The relative fault of the Issuers on the one hand and the Initial
Purchaser on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Issuers or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
Each of the Issuers and the Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Initial Purchaser 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 Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any
-33-
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not 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 the public were offered to the public exceeds the amount of any
damages which the Initial Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Initial Purchaser, and each person, if any, who controls the Issuers within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Issuers.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of any of the Issuers submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Initial Purchaser or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Initial Purchaser.
SECTION 10. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change, or any condition or event that has
resulted or could reasonably be expected to result in a material adverse change,
in the financial condition or in the earnings or business affairs of the Company
and its Subsidiaries (including Heat, Inc. and H.I.G. Vinyl, Inc. and their
respective subsidiaries and Champagne Industries, Inc.) considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political,
-34-
financial or economic conditions, in each case the effect of which is such as to
make it, in the judgment of the Initial Purchaser, impracticable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market System has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8, 9 and 14 shall survive such termination and remain in full force and
effect.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to Xxxxxxx Xxxxx at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of Xxxxx Xxxxxxxxx, with a copy
to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxxx X. Xxxxxxxx, Esq.; notices to the Issuers shall be directed to the
Company at 0000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxx 0000X, Xxxxxx, Xxxxx 00000,
attention of Xxxx Xxxx, with a copy to Xxxx, Hastings, Janofsky, & Xxxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx Xxxxx, Esq. and Xxxxx
Xxxxxxxxxx, Esq.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchaser and the Issuers and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Issuers and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchaser and the
Issuers and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
the Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
-35-
SECTION 13. INFORMATION SUPPLIED BY THE INITIAL PURCHASER. The
statements set forth in the second paragraph, in the second sentence of the
fourth paragraph, in the seventh and eighth paragraphs and in the second
sentence in the tenth paragraph, in each case under the heading "Plan of
Distribution" in the Offering Memorandum (in each case, to the extent such
statements relate to the Initial Purchaser) constitute the only information
furnished by the Initial Purchaser to the Company for use in the Offering
Memorandum for the purposes of Sections 1,7 and 8 hereof.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADING. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
[Signature Pages Follow]
S-1
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchaser, the Company and the Guarantors in accordance with
its terms.
Very truly yours,
ATRIUM COMPANIES, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
ATRIUM DOOR AND WINDOW COMPANY -
WEST COAST
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
ATRIUM DOOR AND WINDOW COMPANY
OF THE NORTHEAST
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
ATRIUM DOOR AND WINDOW COMPANY
OF NEW YORK
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
S-2
ATRIUM DOOR AND WINDOW COMPANY
OF ARIZONA
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
ATRIUM DOOR AND WINDOW COMPANY
OF NEW ENGLAND
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
DOOR HOLDINGS, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
X.X. XXXXX COMPANY, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
X.X. XXXXX COMPANY, INC.- SOUTH
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
S-3
TOTAL TRIM, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
TOTAL TRIM, INC.- SOUTH
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
WING INDUSTRIES HOLDINGS, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
WING INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
S-4
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President
SCHEDULE A
GUARANTORS
Atrium Door and Window Company - West Coast
Atrium Door and Window Company of the Northeast
Atrium Door and Window Company of New York
Atrium Door and Window Company of Arizona
Atrium Door and Window Company of New England
Door Holdings, Inc.
X.X. Xxxxx Company, Inc.
X.X. Xxxxx Company, Inc.-South
Total Trim, Inc.
Total Trim, Inc.-South
Wing Industries Holdings, Inc.
Wing Industries, Inc.
Heat, Inc.(1)
H.I.G. Vinyl, Inc.*
Champagne Industries, Inc.*
Thermal Industries, Inc.*
Best Built, Inc.*
----------
(1) To become Guarantors pursuant to the Joinder Agreement.
SCHEDULE B
SUBSIDIARIES
Atrium Door and Window Company - West Coast
Atrium Door and Window Company of the Northeast
Atrium Door and Window Company of New York
Atrium Door and Window Company of Arizona
Atrium Door and Window Company of New England
Door Holdings, Inc.
X.X. Xxxxx Company, Inc.
X.X. Xxxxx Company, Inc.-South
Total Trim, Inc.
Total Trim, Inc.-South
Wing Industries Holdings, Inc.
Wing Industries, Inc.
Heat, Inc.(2)
H.I.G. Vinyl, Inc.*
Champagne Industries, Inc.*
Thermal Industries, Inc.*
Best Built, Inc.*
----------
(2) To become Guarantors pursuant to the Joinder Agreement.
EXHIBIT A
ATRIUM COMPANIES, INC.
(a Delaware corporation)
$175,000,000
10 1/2% Senior Subordinated Notes due 2009
JOINDER AGREEMENT
May [ ], 1999
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Reference is hereby made to that certain purchase agreement (the
"PURCHASE AGREEMENT") dated as of May 10, 1999 among Atrium Companies, Inc., a
Delaware corporation (the "COMPANY"), the guarantors named therein (the
"GUARANTORS") and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
Each of the undersigned hereby acknowledges that it has received and
reviewed a copy of the Purchase Agreement, and acknowledges and agrees to (i)
join and become a party to the Purchase Agreement as a Guarantor as indicated by
its signature below and to execute and deliver the Indenture and the
Registration Rights Agreement and to deliver a notation of its Guarantee to be
endorsed on each Note authenticated under the Indenture; (ii) be bound by all
covenants, agreements, representations, warranties and acknowledgments
attributable to a Guarantor in the Purchase Agreement; and (iii) perform all
obligations and duties required of a Guarantor pursuant to the Purchase
Agreement. Each of the undersigned hereby makes as of the date hereof all of the
representations and warranties of a Guarantor in the Purchase Agreement.
The jurisdiction of incorporation of each of the undersigned is as
set forth on ANNEX A hereto.
THIS JOINDER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Signature page follows]
S-1
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered in New York, New York, by its proper
and duly authorized officer as of the date set forth above.
HEAT, INC.
H.I.G. VINYL, INC.
CHAMPAGNE INDUSTRIES, INC.
THERMAL INDUSTRIES, INC.
BEST BUILT, INC.
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------
Name:
Title:
ANNEX A
Subsidiary State of Incorporation States Where Qualified
---------- ---------------------- ----------------------
Heat, Inc. Delaware
H.I.G. Vinyl, Inc. Delaware
Champagne Industries, Inc. Colorado
Thermal Industries, Inc. Delaware Connecticut, Florida,
Georgia, Illinois,
Massachusetts, Michigan,
Missouri, New York, North
Carolina, Ohio,
Pennsylvania, Tennessee,
Virginia
Best Built, Inc. Delaware Washington
