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EINSTEIN/NOAH BAGEL CORP.
(a Delaware corporation)
$125,000,000
7 1/4% Convertible Subordinated Debentures Due 2004
PURCHASE AGREEMENT
May 22, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxx. Xxxxx & Sons Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Xxxxxxxx/Noah Bagel Corp., a Delaware corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx
& Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxx. Xxxxx & Sons Incorporated and
Xxxxxx Xxxxxxx & Co. Incorporated (collectively, the "Initial Purchasers,"
which term shall also include any purchaser substituted as hereinafter provided
in Section 10 hereof), with respect to the issue and sale by the Company and
the purchase by the Initial Purchasers, acting severally and not jointly, of
the respective principal amounts set forth in Schedule A hereto of the
$125,000,000 aggregate principal amount of the Company's 7 1/4% Convertible
Subordinated Debentures due 2004 (the "Debentures"), and with respect to the
grant by the Company to the Initial Purchasers, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of an additional $18,750,000 principal amount of Debentures to cover over-
allotments, if any. The aforesaid $125,000,000 principal amount of Debentures
(the "Initial Securities") to be purchased by the Initial Purchasers and all or
any part of the $18,750,000 principal amount of Debentures subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities." The Securities are to be
issued pursuant to an Indenture dated as of May 29, 1997 (the
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"Indenture") between the Company and Bankers Trust Company, as trustee (the
"Trustee"). Securities issued in book-entry form 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) (the
"DTC Agreement"), among the Company, the Trustee and DTC.
The Securities are convertible into shares of common stock, $.01 par
value per share, of the Company (the "Common Stock") in accordance with the
terms of the Securities and the Indenture, at the initial conversion price
specified in Schedule B hereto.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the "Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are
to be offered and resold by the Initial Purchasers 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, Securities may be resold or otherwise transferred only if such
resale or transfer is 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
(the "1933 Act Regulations") by the Securities and Exchange Commission (the
"Commission")). Prior to or concurrently with the purchase of the Securities
by the Initial Purchasers, the Company will enter into with the Initial
Purchasers an agreement (the "Registration Rights Agreement") pursuant to which
the Company is required to file and use its reasonable efforts to have declared
effective a registration statement under the 1933 Act to register resales of
the Debentures and the shares of Common Stock issuable upon conversion thereof.
The Company has prepared and delivered to the Initial Purchasers copies
of a preliminary offering memorandum dated May 13, 1997 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchasers, on the date hereof or on the next succeeding business day, copies
of a final offering memorandum dated May 22, 1997 (the "Final Offering
Memorandum"), each to be used by the Initial Purchasers in connection with
their solicitation of purchases 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), including exhibits thereto and any documents
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incorporated therein by reference, which has been prepared and delivered by the
Company to the Initial Purchasers in connection with its solicitation of
purchases of the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Initial Purchaser as of the date hereof and
agrees with each Initial Purchaser, as follows:
(i) Offering Memorandum. Neither the Offering Memorandum nor
any amendments or supplements thereto, at the time the Offering
Memorandum or any such amendment or supplement was issued, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and the
Offering Memorandum, as amended or supplemented, at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery)
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
light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Offering Memorandum made in reliance
upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser through Xxxxxxx Xxxxx expressly for use
in the Offering Memorandum.
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included or incorporated
by reference in the Offering Memorandum are independent public
accountants within the meaning of Regulation S-X under the 1933 Act.
(iii) Financial Statements. The financial statements included
or incorporated by reference in the Offering
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Memorandum, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity (deficit) and cash flows of the Company and its
consolidated subsidiaries for the periods specified; 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 or
incorporated by reference in the Offering Memorandum present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data included in the Offering Memorandum under
"Recent Developments" present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements incorporated by reference in the Offering
Memorandum.
(iv) 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 in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (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.
(v) 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 this Agreement; 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.
(vi) Good Standing of Subsidiaries. Each subsidiary of the
Company has been duly organized and is validly existing as a corporation
in good standing under the laws of
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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; all of the issued and
outstanding capital stock of each such 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, other than the pledge of such stock pursuant to the Company's
secured revolving bank credit agreement dated May 17, 1996 with Bank of
America Illinois, as agent for the lenders named therein, as amended
(the "Credit Agreement"). The only subsidiaries of the Company are the
subsidiaries listed on Schedule C attached hereto.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Memorandum
in the column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements or employee benefit plans described
in the Offering Memorandum or pursuant to the exercise of convertible
securities, or options or warrants described in the Offering
Memorandum). The shares of issued and outstanding capital stock 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 the preemptive or other similar
rights of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement has been, and
at Closing Time the Registration Rights Agreement will have been, duly
executed and delivered by the Company.
(ix) Authorization of Securities and Indenture. The
Securities to be issued and sold pursuant to this Agreement have been
duly authorized, and when issued, authenticated and delivered pursuant
to this Agreement, against payment of the consideration set forth
herein, will have been duly executed, authenticated, issued and
delivered and will constitute legal, valid and binding obligations of
the Company, subject, as to enforcement, to bankruptcy, insolvency,
reorganization or other similar laws of general applicability now or
hereafter in effect relating to or
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affecting creditors' rights and to general equity principles, entitled
to the benefits provided by the Indenture under which they are to be
issued; when executed and delivered by the Company and the Trustee
(assuming due authorization, execution and delivery by the Trustee), the
Indenture will constitute a legal, valid and binding instrument
enforceable in accordance with its terms subject, as to enforcement, to
bankruptcy, insolvency, reorganization or other similar laws of general
applicability now or hereafter in effect relating to or affecting
creditors' rights and to general equity principles; and the Securities
and the Indenture conform in all material respects to the descriptions
thereof in the Offering Memorandum.
(x) Common Stock Issuable Upon Conversion. Upon issuance and
delivery of the Securities in accordance with this Agreement and the
Indenture, the Securities shall be convertible at the option of the
holder thereof for shares of Common Stock in accordance with the terms
of the Securities and the Indenture; and the shares of Common Stock
initially issuable upon conversion of Securities have been duly
authorized and reserved for issuance, and when issued and delivered,
pursuant to the terms of the Indenture, will be validly issued and fully
paid and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Offering Memorandum; and the issuance
of the Securities and the Common Stock issuable upon conversion of the
Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(xi) 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 it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary 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 and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein (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 the Company with its obligations hereunder
and thereunder have been duly authorized by all necessary corporate
action and do not and
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will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
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 subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults, Repayment
Events or liens, charges or encumbrances that 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
subsidiary 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
subsidiary or any of their assets, properties or operations. 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 to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. Except as disclosed in the
Offering Memorandum, no labor dispute with the employees of the Company
or any subsidiary that could reasonably be expected to result in a
Material Adverse Effect exists or, to the knowledge of the Company, has
been threatened.
(xiii) Absence of Proceedings. Except as disclosed in the
Offering Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any subsidiary
which the Company reasonably believes is likely to result in a Material
Adverse Effect, or which the Company reasonably believes is likely to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement, the
Indenture or the Registration Rights Agreement or the performance by the
Company of its obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary 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.
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(xiv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or reasonably believe that they can acquire
on reasonable terms, the patents, patent 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") currently
employed by them in connection with the business now operated by them,
and, except as disclosed in the Offering Memorandum, neither the Company
nor any of its subsidiaries has received any notice or, to the best of
their respective knowledge, 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 carry on the business of
the Company or any of its subsidiaries, 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.
(xv) 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 Company of
its obligations under this Agreement, the Indenture or the Registration
Rights Agreement, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may be required under
state securities laws.
(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such certificates, 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 so possess such Government
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 when 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
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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, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder or is exempt therefrom.
(xviii) Investment Company Act. The Company is not, 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 will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended (the "1940 Act").
(xix) Taxes and Fees. All taxes and fees required to be paid
with respect to the execution of the Indenture and the issuance of the
Securities have been paid.
(xx) Incorporated Documents. The Offering Memorandum as
delivered from time to time shall incorporate by reference the most
recent Annual Report of the Company on Form 10-K/A filed with the
Commission and each Quarterly Report of the Company on Form 10-Q and
each Current Report of the Company on Form 8-K filed with the Commission
since the filing of the then most recent Annual Report of the Company on
Form 10-K/A. The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter
are filed with the Commission complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the Offering
Memorandum, at the date of the Offering Memorandum and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(xxi) No Public Offering. Neither the Company, any of its
subsidiaries, nor, to the best of its knowledge, any of its other
Affiliates (as defined in Rule 501(b) of
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Regulation D under the 1933 Act ("Regulation D")), nor any person acting
on its or their behalf (other than the Initial Purchasers as to which
the Company makes no representation or warranty) has, directly or
indirectly, made offers or sales of any security, or solicited offers to
buy any security, under circumstances that would require the
registration of the Securities under the 1933 Act.
(xxii) Rule 144A and Regulation S Compliance. Neither the
Company, any of its subsidiaries, nor, to the best of its knowledge, any
of its other Affiliates, nor any person acting on its or their behalf
(other than the Initial Purchasers as to which the Company makes no
representation or warranty) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Securities in the United
States. The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the 1933 Act. Neither the Company, any of its
subsidiaries, nor, to the best of its knowledge, any of its other
Affiliates, nor any person acting on its or their behalf (other than the
Initial Purchasers as to which the Company makes no representation or
warranty) has engaged in any directed selling efforts with respect to
the Securities, and each of them has complied with the offering
restrictions requirement of Regulation S ("Regulation S") under the 1933
Act. Terms used in the preceding sentence have the meanings given to
them by Regulation S. The Company has been advised by the National
Association of Securities Dealers, Inc. that the Securities have been
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. The
Company is subject to and in substantial compliance with the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act.
(b) Officer's Certificates. Any certificates signed by any officer
of the Company or any of its subsidiaries delivered to the Initial Purchasers
or to counsel for the Initial Purchasers shall be deemed a representation and
warranty by the Company to each Initial Purchaser as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Initial 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 each Initial Purchaser, severally and not
jointly, and each Initial Purchaser, severally and not jointly, agrees to
purchase from the Company, at the price set forth in Schedule B, the aggregate
principal amount of Initial Securities set forth in
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Schedule A opposite the name of such Initial Purchaser, plus any additional
principal amount of Initial Securities which such Initial Purchaser may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the Initial
Purchasers, severally and not jointly, to purchase up to an additional
$18,750,000 principal amount of Securities at the same price set forth in
Schedule B, plus accrued interest, if any, from the Closing Time to the Date of
Delivery. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the subsequent
resale of the Initial Securities upon notice by the Initial Purchasers to the
Company setting forth the number of Option Securities as to which the several
Initial Purchasers are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Initial Purchasers,
but shall not be later than five full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Initial Purchasers, acting severally and not jointly, will purchase that
proportion of the total principal amount of Option Securities then being
purchased which the principal amount of Initial Securities set forth in
Schedule A opposite the name of such Initial Purchaser bears to the total
principal amount of Initial Securities, subject in each case to such
adjustments as the Initial Purchasers in their discretion shall make to
eliminate any sales or purchases of Securities having a principal amount less
than $1,000.
(c) Payment. Payment of the purchase price for the Initial
Securities shall be made at the office of Xxxx, Xxxx & Xxxxx, Three First
National Plaza, Chicago, Illinois, and delivery of certificates for the Initial
Securities shall be made against payment therefor at the office of Xxxxxxx
Xxxxx, Xxxxxxx Xxxxx World Headquarters, North Tower, World Financial Center,
New York, New York 10281-1305, or (in either case) at such other place as
shall be agreed upon by the Initial Purchasers and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Initial Purchasers and the Company (such time
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and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Initial Purchasers, payment of the purchase price for such
Option Securities shall be made at the above-mentioned office, or (in either
case) at such other place as shall be agreed upon by the Initial Purchasers and
the Company, on each Date of Delivery as specified in the notice from the
Initial Purchasers to the Company.
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 Purchasers of certificates for the Securities to be purchased by
them.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Initial Purchasers may request in writing
at least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Initial Purchasers in The City of New York not later than
10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
(e) Information with Respect to Initial Purchasers. Each Initial
Purchaser, severally and not jointly, hereby represents and warrants to, and
agrees with, the Company that it (i) is a "qualified institutional buyer"
within the meaning of Rule 144A under the 1933 Act (a "Qualified Institutional
Buyer") and an institutional "accredited investor" within the meaning of
Regulation D under the 1933 Act (an "Accredited Investor"); (ii) has not and
will not solicit offers for, or offer or sell, Securities by means of any
general solicitation or general advertising within the meaning of Rule 502(c)
under Regulation D under the 1933 Act; and (iii) will otherwise act in
accordance with the terms and conditions set forth in this Agreement, including
Section 8 hereof, and in the Offering Memorandum in connection with the
placement of the Securities contemplated hereby.
SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
(a) Delivery of Offering Memorandum. The Company agrees to furnish
to each Initial Purchaser, as promptly as possible, without charge, such number
of copies of the Preliminary Offering Memorandum, the Final Offering Memorandum
and any supplements and
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amendments thereto and documents incorporated by reference therein as such
Initial Purchaser may reasonably request.
(b) Amendments to Offering Memorandum. The Company will give the
Initial Purchasers notice of its intention to prepare any amendment or
supplement to the Offering Memorandum and will not use any such amendment or
supplement to which the Initial Purchasers or counsel for the Initial
Purchasers shall reasonably object. Neither the consent of the Initial
Purchasers, nor the Initial Purchasers' delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(c) Material Changes. The Company will immediately notify the
Initial Purchasers, and confirm such notice in writing, of (x) any filing made
by the Company of information relating to the placement 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 Purchasers as evidenced by a notice in writing from
the Initial Purchasers to the Company (which the Initial Purchasers agree to
provide promptly, and in any event no later than two business days after such
completion), any material changes in or affecting the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries that (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 or
condition exist as a result of which it is necessary to amend or supplement the
Final Offering Memorandum in order that the Final 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 Company will forthwith amend or
supplement the Final Offering Memorandum by preparing and furnishing to the
Initial Purchasers 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 Purchasers)
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.
(d) Blue Sky Qualifications. The Company will use its reasonable
best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities and the shares of Common Stock issuable upon conversion of the
Securities for offering and sale under the applicable securities laws of such
states and
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other domestic jurisdictions as the Initial Purchasers may designate; provided,
however, that the Company shall not 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. In each jurisdiction in which the Securities or
such shares of Common Stock have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required to
complete the distribution of the Securities or as otherwise required by law.
(e) Rule 144A Information. The Company agrees 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, to make available, upon
request, to any holder of Securities or prospective purchasers of Securities
the information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(f) Integration. The Company agrees that it will not make any offer
and sale of securities of the Company of any class if, as a result of the
doctrine of "integration" referred to in Rule 502 under the 1933 Act, such
offer and sale would render invalid (as applicable to (i) the sale of the
Securities by the Company to the Initial Purchasers, (ii) the resale of the
Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others, in each case
in accordance with the terms and conditions herein set forth) 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.
(g) Reasonable Inquiry. In connection with the original distribution
of the Securities, the Company agrees that, prior to any offer or resale of the
Securities by the Initial Purchasers, the Initial Purchasers and counsel for
the Initial Purchasers shall have the right to make reasonable inquiries into
the business of the Company and its subsidiaries.
(h) 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."
(i) Restriction on Sale of Debt Securities. The Company will not,
without the prior written consent of Xxxxxxx Xxxxx, contract to sell or
announce or make any offering, sale or other disposition of any debt securities
of the Company having a
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maturity greater than one year during the period beginning from the date of
this Agreement and continuing through the earlier of the termination of trading
restrictions with respect to the Securities, as notified to the Company by you,
or the Closing Time.
(j) Restriction on Sale of Equity Securities. During a period of 180
days from the date of the Offering Memorandum, the Company will not, without
the prior written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder and shares
of Common Stock issuable upon conversion thereof, (B) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Offering Memorandum, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Offering Memorandum or (D) any shares of Common
Stock issued in connection with acquisitions (provided that the number of
shares of Common Stock issued in connection with such acquisitions does not
exceed 1,000,000).
(k) Reservation of Shares. The Company will reserve and keep
available at all times, free of preemptive rights, shares of Common Stock for
the purpose of enabling the Company to satisfy any obligations to issue Common
Stock upon conversion of Securities.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and delivery of the Offering Memorandum and of each
amendment or supplement thereto, (ii) the preparation, reproduction and
delivery to the Initial Purchasers of this Agreement, the Indenture and the
Registration Rights Agreement, and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and
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delivery of the certificates for the Securities to the Initial Purchasers,
including any transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Initial Purchasers, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities and the shares of Common
Stock issuable upon conversion 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 in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vii) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indenture, (viii) any fees payable in connection with the rating of the
Securities and (ix) the fee of the National Association of Securities Dealers,
Inc.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5(i) or Section
9(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinion of Counsel for Company. At Closing Time the Initial
Purchasers shall have received the favorable opinion, dated as of Closing Time,
of Xxxx, Xxxx & Xxxxx, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchasers, together with
signed or reproduced copies of such letter for each of the other Initial
Purchasers to the effect set forth in Exhibit A hereto.
(b) Opinion of Counsel for Initial Purchasers. At Closing Time the
Initial Purchasers shall have received the favorable opinion, dated as of
Closing Time, of Xxxxx, Brown & Xxxxx, counsel for the Initial Purchasers with
respect to the matters set forth in (i), (ii), (vi) (solely as to preemptive or
other similar rights arising by operation of law or under the charter or
by-laws of the Company), (vii) to (xi), inclusive, (xiii) (solely as to the
information in the Offering Memorandum under "Description of Debentures" and
"Description of Capital Stock"),(xix), (xx) and the penultimate paragraph of
Exhibit A
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hereto. 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
Purchasers. 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 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 (exclusive of any amendment or
supplement thereto subsequent to the date of this Agreement), any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Initial Purchasers shall have received a certificate of the
President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, in their capacities as officers of the
Company and not individually, dated as of Closing Time, to the effect that, to
the best of their knowledge based on reasonable investigation, (i) there has
been no such material adverse change, (ii) the representations and warranties
in Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, and (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to Closing Time.
(d) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Initial Purchasers shall have received from Xxxxxx Xxxxxxxx
LLP a letter dated such date, in form and substance satisfactory to the Initial
Purchasers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Offering Memorandum.
(e) Bring-down Comfort Letter. At Closing Time the Initial
Purchasers shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
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(f) Lock-up Agreement. At the date of this Agreement, the Initial
Purchasers shall have received an agreement substantially in the form of
Exhibit B hereto signed by Boston Chicken, Inc.
(g) Conditions to Purchase of Option Securities. In the event that
the Initial Purchasers exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any subsidiary of the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Initial Purchasers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, in their
capacities as officers of the Company and not individually, confirming
that the certificate delivered at the Closing Time pursuant to Section
5(c) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Xxxx, Xxxx & Xxxxx, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchasers, dated
such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(a) hereof.
(iii) Opinion of Counsel for Initial Purchasers. The favorable
opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the Initial Purchasers,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iv) Bring-down Comfort Letter. A letter from Xxxxxx Xxxxxxxx
LLP, in form and substance satisfactory to the Initial Purchasers and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Initial Purchasers pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(h) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Initial Purchasers shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the
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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 Company in connection with the issuance and sale of the Securities
as herein contemplated and with respect to the shares of Common Stock issuable
upon conversion of the Securities shall be reasonably satisfactory in form and
substance to the Initial Purchasers and counsel for the Initial Purchasers.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Initial Purchasers to purchase the relevant Option
Securities, may be terminated by the Initial Purchasers by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4.
SECTION 6. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any 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 the Preliminary
Offering Memorandum or the Final Offering Memorandum (or any amendment
or supplement thereto), or the omission or 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 6(d) below) any such settlement is effected with the written
consent of the Company; and
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(iii) against any and all expenses whatsoever, as incurred
(including the reasonable 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 written information furnished to the Company by any
Initial Purchaser through Xxxxxxx Xxxxx expressly for use in the Preliminary
Offering Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto); and provided further, that, insofar as this indemnity
agreement relates to any untrue statement or omission, or any alleged untrue
statement or omission, made in the Preliminary Offering Memorandum, but
eliminated or remedied in the Final Offering Memorandum, it shall not inure to
the benefit of an Initial Purchaser (or to the benefit of any person who
controls such Initial Purchaser) if a copy of the Final Offering Memorandum was
not delivered by such Initial Purchaser to the person asserting the claim
arising from such untrue statement or omission, or such alleged untrue
statement or omission at or prior to the confirmation of the sale of the
Securities to such person, if the delivery thereof would have constituted a
defense to the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers, and each person, if any, who controls the
Company 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 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 Preliminary Offering Memorandum or
the Final Offering Memorandum (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through Xxxxxxx Xxxxx expressly for use in
the Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced
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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 which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. If it
so elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume the defense of such action, with
counsel chosen by it and approved by the indemnified parties defendant
in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available
to them which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense
of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel retained for local procedural
and practice matters) 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 could be sought under this Section 6
(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, (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, (iii) does
not impugn the reputation of any indemnified party and (iv) does not
restrict any indemnified party from engaging in any activity.
(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 reasonable fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(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 into and (iii) such indemnifying
party
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shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto and identified as such, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Initial Purchasers.
SECTION 8. Subsequent Offers and Resales of the Securities. (a)
Each of the Initial Purchasers and the Company hereby establish
and agree to observe the following procedures in connection with the offer and
sale by the Initial Purchasers of the Securities.
(i) Offers and sales of the Securities will be made by the
Initial Purchasers only to (A) institutional investors that are
reasonably believed to qualify as Accredited Investors (each such
institutional investor being hereinafter referred to as an
"Institutional Accredited Investor"), or (B) in the case of Securities
resold or otherwise transferred pursuant to Rule 144A, to institutional
investors that are reasonably believed to qualify as Qualified
Institutional Buyers or (C) to non-U.S. persons in offshore transactions
in reliance upon Regulation S under the 1933 Act.
(ii) The Securities will be offered by the Initial Purchasers
only by approaching prospective Subsequent Purchasers on an individual
basis. No general solicitation or general advertising (within the
meaning of Rule 502(c) under the 1933 Act) will be used in connection
with the offering of the Securities.
(iii) In the case of a non-bank Subsequent Purchaser of a
Security acting as a fiduciary for one or more third parties, in
connection with an offer and sale to such purchaser pursuant to clause
(a) above, each third party shall, in the judgment of the Initial
Purchasers, be an Institutional Accredited Investor or a Qualified
Institutional Buyer or a non-U.S. person outside the United States.
(iv) The transfer restrictions and the other provisions set
forth in Section 2.6 of the Indenture, including the legend required
thereby, shall apply to the Securities except as otherwise agreed by the
Company and the
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Initial Purchasers. Following the sale of the Securities by the Initial
Purchasers to Subsequent Purchasers pursuant to the terms hereof, except
as otherwise provided in Section 6 hereof, the Initial Purchasers shall
not be liable or responsible to the Company for any losses, damages or
liabilities suffered or incurred by the Company, including any losses,
damages or liabilities under the 1933 Act, arising from or relating to
any resale or transfer of any Security.
(v) The Initial Purchasers will deliver to each Subsequent
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) Each Initial Purchaser understands that the Securities have not
been and will not be registered prior to or at Closing Time under the 1933 Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S
under the 1933 Act or pursuant to an exemption from the registration
requirements of the 1933 Act. Each Initial Purchaser represents and agrees
that, except as permitted herein, 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, only in accordance with Rule
903 of Regulation S or Rule 144A under the 1933 Act. Accordingly, neither such
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 such Initial Purchaser, its affiliates and any person acting on
its behalf have complied and will comply with the offering restriction
requirements of Regulation S. Each 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, if any, 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
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Regulation S or Rule 144A under the Securities 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 9. Termination of Agreement.
(a) Termination; General. The Initial Purchasers may terminate this
Agreement, by written notice to the Company, at any time at or prior to 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 in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries 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, any
outbreak of hostilities or escalation thereof or other calamity or crisis, in
each case the effect of which is such as to make it, in the judgment of the
Initial Purchasers, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any securities
of the Company has been suspended or limited by the Commission or the Nasdaq
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
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.
SECTION 10. Default by One or More of the Initial Purchasers. If one
or more of the Initial Purchasers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the non-defaulting Initial
Purchasers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Initial Purchasers, or any
other purchasers, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however,
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the non-defaulting Initial Purchasers shall not have completed such
arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not exceed
10% of the aggregate principal amount of Securities to be purchased on such
date, each of the non-defaulting Initial Purchasers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Initial Purchasers, or
(b) if the principal amount of Defaulted Securities exceed 10% of the
aggregate principal amount of Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Initial Purchasers to purchase and of the
Company to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-defaulting
Initial Purchasers or the Company.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Initial Purchasers to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the non-defaulting Initial Purchasers or
the Company shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Offering Memorandum or in any other
documents or arrangements. As used herein, the term "Initial Purchaser"
includes any person substituted for an Initial Purchaser under this Section 10.
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
Purchasers shall be directed to the Initial Purchasers c/x Xxxxxxx Xxxxx at
0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Vice
Chairman - Investment Banking; and notices to the Company shall be directed to
it at 00000 Xxxxxx Xxxx Xxxxxxx, X.X. Box 4086, Golden, Colorado 80401,
Attention: Xxxx Xxxxxxx, General Counsel.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers and the
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Company 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 Purchasers and the Company and their
respective successors and the controlling persons and officers and directors
referred to in Section 6 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 Purchasers and the Company 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 any Initial Purchasers shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. 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 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
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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 Purchasers and the Company in accordance with its
terms.
Very truly yours,
EINSTEIN/NOAH BAGEL CORP.
By /s/ XXXX X. XXXX
----------------------------------
Title: Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXX. BROWN & SONS INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By /s/ XXXXXXX X. X'XXXXX
-------------------------------------------
Authorized Signatory
28
SCHEDULE A
Principal
Amount of
Initial
Name of Initial Purchaser Securities
------------------------- ----------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated . . . . . . . . . . . . . . . . . . . . . $41,668,000
Xxxx. Xxxxx & Sons Incorporated . . . . . . . . . . . . . . . . . . 41,666,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . . . . . . . . . 41,666,000
-----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000,000
============
Sch A - 1
29
SCHEDULE B
EINSTEIN/NOAH BAGEL CORP.
$125,000,000
7 1/4% Convertible Subordinated Debentures due 2004
1. The initial price to investors of the Securities shall be 100% of
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the several Initial Purchasers
for the Initial Securities shall be 97.25% of the principal amount thereof.
3. The interest rate on the Securities shall be 7 1/4% per annum.
4. The Securities shall be convertible into shares of Common Stock,
par value $.01 per share, of the Company at an initial conversion price of
$21.25 per share.
Sch B - 2
30
SCHEDULE C
List of Subsidiaries
Xxxxxxxx Brothers, Inc.
Baltimore Bagel Co.
Noah's New York Bagels, Inc.
Sch C - 1
31
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum.
(iii) To the best of our knowledge and information, the Company 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.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Offering Memorandum or
pursuant to the exercise of convertible securities or options referred to in
the Offering Memorandum; 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.
(v) Each subsidiary of the Company has been duly incorporated 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, to the best of our knowledge and information, 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; all of the issued and outstanding capital
stock of each such subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of our knowledge and
information, is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
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encumbrance, claim or equity (other than the pledge of stock pursuant to the
Credit Agreement).
(vi) The issuance of the Securities or the shares of Common Stock
issuable upon conversion of the Securities is not subject to preemptive or
other similar rights arising by operation of law, under the charter or by-laws
of the Company or, to the best of their knowledge and information, otherwise.
(vii) The Purchase Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company.
(viii) The Initial Securities or Option Securities, as the case may be,
to be issued and sold by the Company pursuant to the Purchase Agreement have
been duly authorized by requisite corporate action on the part of the Company,
and the Securities, when executed and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by you, will be valid and
binding obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity); and the Securities and the Indenture conform as to legal matters in
all material respects to the descriptions thereof in the Offering Memorandum.
(ix) The Indenture has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, and by general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(x) Upon issuance and delivery of the Securities in accordance with
this Agreement and the Indenture, the Securities shall be convertible at the
option of the holder thereof for shares of Common Stock in accordance with the
terms of the Securities and the Indenture; and the shares of Common Stock
initially issuable upon conversion of Securities have been duly authorized and
reserved for issuance and, when issued and delivered pursuant to the terms of
the Indenture, will be validly issued, fully paid and non-assessable.
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33
(xi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements
and with any applicable requirements of the charter and by-laws of the Company.
(xii) To the best of our knowledge and information, there is not
pending or threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any subsidiary is a party, or to which the property of
the Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, 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 thereof or
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder.
(xiii) The information in the Offering Memorandum under "Description of
Debentures" and "Description of Capital Stock", to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(xiv) To the best of our knowledge and information, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Offering
Memorandum other than those described or referred to therein, and the
descriptions thereof or references thereto are correct in all material
respects.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement the Indenture,
or the Registration Rights Agreement or for the offering, issuance or sale of
the Securities.
(xvi) To the best of our knowledge and information, the execution,
delivery and performance of the Purchase Agreement, the Indenture and the
Registration Rights Agreement and the consummation of the transactions
contemplated thereby (including the issuance and sale of the Securities) and
compliance by the Company with its obligations thereunder do not and 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 (as defined in
Section 1(a)(xi) of the Purchase
A-3
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Agreement) under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches, defaults, Repayment
Events or liens, charges or encumbrances that would not have 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 applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their respective properties,
assets or operations.
(xvii) The Company is not an "investment company" as such term is
defined in the 1940 Act.
(xviii) Each document filed pursuant to the 1934 Act (other than the
financial statements and supporting schedules included therein, as to which no
opinion need be rendered) and incorporated or deemed to be incorporated by
reference in the Offering Memorandum complied when so filed as to form in all
material respects with the 1934 Act and the 1934 Act Regulations.
(xix) Assuming the accuracy of the representations and warranties of
the Company and the Initial Purchasers contained in the Purchase Agreement and
compliance with the agreements of the Company and the Initial Purchasers
contained therein, no registration of the Securities under the 1933 Act is
required, and no qualification of the Indenture under the Trust Indenture Act
of 1939 is necessary, for the offer and sale of the Securities to the Initial
Purchasers as contemplated by the Purchase Agreement or in connection with the
initial resale of the Securities by the Initial Purchasers in accordance with
the Purchase Agreement.
(xx) The Securities are not of the same class (within the meaning of
Rule 144A) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the 1934 Act or that are
quoted in a United States automated inter-dealer quotation system.
Nothing has come to our attention that would lead us to believe that the
Offering Memorandum or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which we need make no statement), at the time the
Offering
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35
Memorandum was issued, at the time any such amendment or supplement to the
Offering Memorandum was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits 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.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
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[FORM OF LOCK-UP FROM BOSTON CHICKEN, INC.
PURSUANT TO SECTION 5(F)]
Exhibit B
May ___, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Xxxx. Xxxxx & Sons Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Private Offering by Xxxxxxxx/Noah Bagel Corp.
Dear Sirs:
The undersigned, a stockholder of Xxxxxxxx/Noah Bagel Corp., a Delaware
corporation (the "Company"), understands that Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxx. Xxxxx &
Sons Incorporated and Xxxxxx Xxxxxxx & Co. Incorporated propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company providing for
the private offering of 7 1/4% Convertible Subordinated Debentures due 2004.
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the undersigned agrees with each purchaser to be named in the Purchase
Agreement that, during a period of 180 days from the date of the Purchase
Agreement, the undersigned will not, without the prior written consent of
Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's common stock, par value
$.01 per share (the "Common Stock") or any securities convertible into or
exchangeable or exercisable for Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition or (ii) enter into any swap or any
other agreement or any transaction that
B-1
37
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities,
in cash or otherwise; provided, however, that such foregoing restrictions shall
not apply to shares of Common Stock subject to options granted by the
undersigned which are outstanding on the date hereof.
Very truly yours,
Signature:
-------------------------
Print Name:
------------------------
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