Execution Copy
95,000 Units
consisting in the aggregate of
$95,000,000 Aggregate Principal Amount at Maturity of
13% Senior Subordinated Discount Notes due 2006
and
95,000 Warrants to Purchase 665,000 Shares of Common Stock
of
COINSTAR, INC.
PURCHASE AGREEMENT
October 22, 1996
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Coinstar, Inc., a Delaware corporation (the "COMPANY"),
proposes, upon the terms and conditions set forth in this agreement (this
"AGREEMENT"), to issue and sell to Xxxxx Xxxxxx Inc. (the "INITIAL
PURCHASER") units (the "UNITS") consisting in the aggregate of (i)
$95,000,000 aggregate principal amount at maturity of the Company's 13%
Senior Subordinated Discount Notes due October 1, 2006 (the "NOTES"), and
(ii) 95,000 Warrants (the "INITIAL WARRANTS"), each representing the right to
purchase initially seven shares of Common Stock, $.001 par value of the
Company (the "COMMON STOCK"). In addition, the Company will be obligated to
issue additional warrants to holders of the Notes upon the occurrence of the
Contingent Event (as defined in that certain Warrant Agreement dated as of
the date hereof between the Company and The Bank of New York as warrant
agent, the "WARRANT AGREEMENT") (the "CONTINGENT WARRANTS," and together with
the Initial Warrants, the "WARRANTS") entitling the holder thereof to
purchase initially three (3) shares of Common Stock at an exercise price of
$.01 per share. Each Unit will consist of $1,000 aggregate principal amount
at maturity of Notes, one Initial Warrant entitling the holder thereof to
purchase initially seven (7) shares of Common Stock at an exercise price of
$.01 per share. The Notes will be issued under an indenture (the
"INDENTURE"), to be dated as of October 1, 1996, between the Company and The
Bank of New
York, as trustee (the "TRUSTEE"). The Warrants will be issued under a warrant
agreement (the "WARRANT AGREEMENT"), to be dated as of October 22, 1996, between
the Company and The Bank of New York, as warrant agent (the "WARRANT AGENT").
The Notes and the Initial Warrants are collectively referred to herein as the
"SECURITIES." This Agreement, the Indenture, the Securities, the Warrant
Agreement and the Registration Rights Agreements (as defined herein) are herein
collectively referred to as the "TRANSACTION DOCUMENTS."
The Company wishes to confirm as follows its agreement with the
Initial Purchaser in connection with the purchase and resale of the Securities.
1. PRELIMINARY OFFERING MEMORANDUM AND OFFERING MEMORANDUM.
The Securities will be offered and sold to the Initial Purchaser without
registration under the Securities Act of 1933, as amended (the "ACT"), in
reliance on an exemption therefrom. The Company has prepared a preliminary
offering memorandum, dated September 5, 1996 (the "PRELIMINARY OFFERING
MEMORANDUM"), and an offering memorandum, dated October 22, 1996 (the
"OFFERING MEMORANDUM"), setting forth information regarding the Company and
the Securities. Unless stated herein to the contrary, all references herein
to the Offering Memorandum are to the Offering Memorandum at the date hereof
(including the exhibits thereto) and do not include any supplement or
amendment subsequent thereto. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by
the Initial Purchaser in accordance with the terms hereof.
The Company understands that the Initial Purchaser proposes to
make offers and sales (the "EXEMPT RESALES") of the Securities purchased by
the Initial Purchaser hereunder only on the terms and in the manner set forth
in the Offering Memorandum and Section 2 hereof, as soon as the Initial
Purchaser deems advisable after this Agreement has been executed and
delivered, (i) to persons in the United States whom the Initial Purchaser
reasonably believes to be qualified institutional buyers ("QUALIFIED
INSTITUTIONAL BUYERS") as defined in Rule 144A under the Act, as such rule
may be amended from time to time ("RULE 144A"), in transactions under Rule
144A and (ii) to a limited number of other institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D
of the Act) ("ACCREDITED INVESTORS") in private sales exempt from
registration under the Act (such persons specified in clauses (i) and (ii)
being referred to herein as the "ELIGIBLE PURCHASERS").
It is also understood and acknowledged (i) that holders
(including subsequent transferees) of the Notes will have the registration
rights set forth in the registration rights agreement (the "NOTES
REGISTRATION RIGHTS AGREEMENT") substantially in the form attached hereto as
EXHIBIT A-1, to be dated as of October 22, 1996, by and between the Company
and the Initial Purchaser, and (ii) that holders (including subsequent
transferees) of the Warrants and the Shares (of Common Stock issuable upon
exercise of the Warrants (the "WARRANT SHARES") will have the registration
rights set forth in the registration rights agreement)(the "WARRANT
REGISTRATION RIGHTS AGREEMENT" substantially in the form attached hereto as
EXHIBIT A-2, and together with the Notes Registration Rights Agreement, the
"REGISTRATION RIGHTS AGREEMENTS"), to be dated as of October 22, 1996, by and
between the Company and the Initial Purchaser.
The Initial Purchaser covenants and agrees with the Company
that it will deliver an Offering Memorandum in connection with each Exempt
Resale (to the extent made available by the
2
Company) if the Company has not already done so and will not after the date of
this Agreement deliver any other offering materials other than the Offering
Memorandum or any amendment or supplement thereto in connection with any Exempt
Resale without the prior consent of the Company. In addition, the Initial
Purchaser shall advise the Company (which advice may be by telephone and if
required by the Company, confirmed in writing) when its initial distribution
(the "INITIAL DISTRIBUTION") of the Securities has been completed.
2. AGREEMENTS TO SELL, PURCHASE AND RESELL.
(a) The Company hereby agrees, subject to all of the
terms and conditions set forth herein, and upon the basis of the
representations, warranties and agreements of the Initial Purchaser, to issue
and sell to the Initial Purchaser and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
of the terms and conditions set forth herein, the Initial Purchaser agrees to
purchase from the Company the amount of Securities set forth on Schedule I
attached hereto at a purchase price equal to $690.39 per Unit; provided,
however that the Initial Purchaser shall not have any obligation to take or
pay for any Units, Notes or Initial Warrants to the extent that any person to
whom it intends to effect an Exempt Resale fails or refuses to purchase on
the Closing Date (as defined below) the Securities which such person was to
purchase pursuant to the terms of such agreed upon Exempt Resale.
(b) The Initial Purchaser has advised the Company that
it will offer the Securities for sale upon the terms and conditions set forth
in this Agreement and in the Offering Memorandum. The Initial Purchaser
hereby represents and warrants to, and agrees with, the Company that it (i)
will not solicit offers for, or offer to sell, the Securities by means of any
form of general solicitation or general advertising or in any manner
involving a public offering within the meaning of Section 4(2) of the Act,
and (ii) will solicit offers for the Securities only from, and will offer,
sell or deliver the Securities as part of its initial offering only to, (A)
persons in the United States whom the Initial Purchaser reasonably believes
to be Qualified Institutional Buyers and the Initial Purchaser is unaware of
any facts indicating that any such representation or warranty is false or
inaccurate, or if any such person is buying for one or more institutional
accounts for which such person is acting as fiduciary or agent, only when
such person has represented to the Initial Purchaser that each such account
is a Qualified Institutional Buyer, to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A, in each case, in
transactions under Rule 144A and (B) to a limited number of Accredited
Investors that make the representations to and agreements with the Initial
Purchaser specified in Annex A to the Offering Memorandum in private sales
exempt from registration under the Act.
The Initial Purchaser has advised the Company that it will
offer the Units to Eligible Purchasers at a price initially equal to $690.39
per Unit, plus accrued original issue discount, if any, on the Notes from the
date of issuance of the Units. Such price may be changed by the Initial
Purchaser at any time thereafter without notice.
The Initial Purchaser understands that the Company and, for the
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 7(c) and 7(d) hereof, counsel to the Company will rely upon the accuracy
and truth of the foregoing representations and agreements and the Initial
Purchaser hereby consents to such reliance.
3
DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to
the Initial Purchaser of and payment for the Units shall be made at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., at 10:00 a.m., New York
time, on October 22, 1996 (the "CLOSING DATE"). The place of closing for the
Securities and the Closing Date may be varied by agreement between the
Initial Purchaser and the Company.
The Securities shall be delivered to the Initial Purchaser
against payment of the purchase price therefor by wire transfer payable to
the order of the Company in New York Clearing House (next day) funds in
accordance with written instructions from the Company. The Notes will be
represented by a global security (the "GLOBAL NOTE") and the Initial Warrants
will be represented by a global security (the "GLOBAL WARRANT" and, together
with the Global Note, the "GLOBAL SECURITIES") and will be registered in the
name of Cede & Co. as nominee of The Depository Trust Company ("DTC"). The
Securities to be delivered to the Initial Purchaser have already been or
shall be made available to the Initial Purchaser in New York City for
inspection and packaging not later than 12:00 noon, New York City time, on
the business day immediately preceding the Closing Date.
4. AGREEMENTS OF THE COMPANY. The Company agrees with the
Initial Purchaser as follows:
(a) During the period of time specified in clause (e)
below of this Section 4, the Company shall advise the Initial Purchaser
promptly and, if requested by it, shall promptly confirm such advice in
writing, of any material adverse change, or of any event or condition known
to the Company which is reasonably likely to result in a material change, in
the condition (financial or other), business, prospects, liabilities
(contingent or otherwise), properties, net worth, solvency or results of
operations of the Company (whether or not arising in the ordinary course of
business), or of the happening of any event, any information becoming known
or the existence of any condition that would require any amendment or
supplement to the Offering Memorandum (as then amended or supplemented) so
that the Offering Memorandum (as so amended or supplemented) would not
contain any 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.
(b) The Company will furnish to the Initial Purchaser,
without charge, such number of copies of the Offering Memorandum and any
amendments or supplements thereto, as it may reasonably request.
(c) The Company will not make any amendment or
supplement to the Preliminary Offering Memorandum or to the Offering
Memorandum of which the Initial Purchaser shall not previously have been
furnished a copy a reasonable time prior to the making thereof or, at any
time prior to the payment for the Securities on the Closing Date, to which it
may reasonably object after being so advised.
(d) The Company consents to the use of the Offering
Memorandum (and of any amendment or supplement thereto prepared in accordance
with Section 4(c) hereof) in accordance with the securities or Blue Sky laws
of the jurisdictions in which the Securities are offered by the Initial
Purchaser and by all dealers to whom Securities may be sold, in connection
with the offering and sale of the Securities.
4
(e) If, at any time prior to completion of the Initial
Distribution of the Securities by the Initial Purchaser to Eligible Purchasers,
any event shall occur, any information shall become known or any condition shall
exist that in the reasonable business judgment of the Company or in the opinion
of counsel for the Initial Purchaser would require any amendment or supplement
to the Offering Memorandum (as then amended or supplemented) so that the
Offering Memorandum (as so amended or supplemented) would not contain any 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, the Company will, in
each such case subject to Section 4(c) hereof, forthwith prepare, at the sole
expense of the Company, an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Initial Purchaser that number of copies thereof as
it shall request.
(f) The Company will cooperate with the Initial
Purchaser and with its counsel in connection with the qualification of the
Securities for offering and sale by the Initial Purchaser and by dealers
under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such
qualification.
(g) For a period of five (5) years after the Closing
Date, the Company will furnish to the Initial Purchaser (i) as soon as
available, a copy of each quarterly or annual report of the Company mailed to
stockholders or filed with the Securities and Exchange Commission (the
"COMMISSION"), and (ii) from time to time such other information concerning
the Company as the Initial Purchaser may reasonably request.
(h) The Company will apply the net proceeds from the
sale of the Securities in accordance with the description set forth under
"Use of Proceeds" in the Offering Memorandum.
(i) Except as stated in this Agreement and in the Offering
Memorandum, the Company has not taken, nor will it take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in stabilization or manipulation of the price of the Securities to facilitate
the sale or resale of the Securities. Except as permitted by the Act, the
Company will not distribute any offering material in connection with the Exempt
Resales. The Company will not, and will not permit any Affiliate (as defined in
the Indenture) or any person acting on its behalf to, solicit any offers to buy
and will not offer to sell the Securities by means of any form of general
solicitation or general advertising or by means of any directed selling efforts
(as defined under Regulation S and the Commission's releases related thereto).
(j) The Company will use its best efforts to cause the
Securities and the Contingent Warrants to be eligible for trading on PORTAL.
(k) From and after the Closing Date, so long as any of the
Securities or the Contingent Warrants are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act or, if earlier,
until three years after the Closing Date, and during any period in which the
Company is not subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), the Company will furnish to holders and
beneficial owners of the Securities and the Contingent Warrants and prospective
purchasers of Securities or the Contingent
5
Warrants designated by such holders, upon request of such holders or
beneficial owners or such prospective purchasers, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Act to permit compliance
with Rule 144A in connection with resales of the Securities.
(l) The Company represents that it has not, and agrees
that it will not and will cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Act) that would be integrated with the sale of the
Securities in a manner that would require the registration under the Act of
the sale by the Company to the Initial Purchaser or by the Initial Purchaser
to the Eligible Purchasers of the Securities.
(m) The Company agrees to comply in all material
respects with the terms and conditions of the Registration Rights Agreements,
the Warrant Agreement and all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Securities and
the Contingent Warrants by DTC for "book entry" transfer.
(n) The Company agrees that prior to any registration of
the Notes pursuant to the Notes Registration Rights Agreement, or at such
earlier time as may be so required, the Indenture shall, if so required, be
qualified under the Trust Indenture Act of 1939 (the "1939 ACT") and will
enter into any necessary supplemental indentures in connection therewith.
(o) Prior to the Closing Date, the Company will furnish
to the Initial Purchaser, if and as soon as prepared by the Company, a copy
of any unaudited interim consolidated quarterly financial statements of the
Company for any period subsequent to the period covered by the most recent
consolidated financial statements of the Company appearing in the Offering
Memorandum.
(p) The Company shall not, until 90 days following the
Closing Date, without the prior written consent of the Initial Purchaser,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any securities issued by the Company
(other than the Securities, any debt securities of the Company issued
pursuant to the Notes Registration Rights Agreement in exchange for the
Notes, any Common Stock and/or options, warrants or other Common Stock
purchase rights, and the Common Stock issued pursuant to such options,
warrants or other rights, to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board of Directors of the Company and indebtedness permitted under the
Indenture).
(q) The Company will not claim voluntarily, and will,
subject to the fiduciary duties of the Board of Directors of the Company and
applicable law, resist actively any attempts to claim, the benefit of any
usury laws against the holders of any Notes.
(r) Not to, and to cause its affiliates not to, sell any
Securities or Contingent Warrants that have been acquired by any of them.
(s) The Company will amend promptly its Amended and
Restated Certificate of Incorporation to clarify that the definition of
"Additional Shares" includes the Contingent Warrants and shares of Common
Stock issuable upon exercise thereof.
6
(t) The Company will do and perform in all material
respects all things required to be done and performed under this Agreement
and the other Transaction Documents by it on, prior to, and after the Closing
Date.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Initial Purchaser on the date hereof
and as of the Closing Date that:
(a) No order or decree preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum or any amendment
or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements
of the Act has been issued, and no proceeding for that purpose has commenced
or is pending or, to the knowledge of the Company, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates and the Offering Memorandum as of the
Closing Date and any amendment or supplement thereto as of its date and as of
the Closing Date, did not and will not (as of the Closing Date) contain 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, except
that this representation and warranty does not apply to (i) statements in or
omissions from the Preliminary Offering Memorandum and Offering Memorandum
made in reliance upon and in conformity with information relating to the
Initial Purchaser furnished to the Company in writing by or on behalf of the
Initial Purchaser expressly for use therein or (ii) statements in or
omissions from the Preliminary Offering Memorandum that are supplemented,
corrected or modified in, or, as the case may be, added to, the Offering
Memorandum. Notwithstanding the preceding sentence, with respect to the
projections and the underlying assumptions upon which they are based
contained in the Offering Memorandum, the Company represents only that such
projections were prepared in good faith with a reasonable belief in the
underlying assumptions upon which the projections were based.
(c) The Indenture has been duly and validly authorized
by the Company and, upon execution, delivery and performance thereof by the
Company and assuming due authorization, execution, delivery and performance
thereof by the Trustee, will be a valid and legally binding agreement of the
Company, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity; the Indenture conforms in all
material aspects to the summary description thereof in the Offering
Memorandum; and no qualification of the Indenture under the 1939 Act is
required in connection with the offer and sale of the Securities contemplated
hereby (except for sales of Notes pursuant to the Exchange Offer, as defined
in the Indenture) or in connection with the Exempt Resales.
(d) The Company has all the requisite power and
authority to execute and deliver each of the Transaction Documents and the
Contingent Warrants and perform its obligations thereunder; the execution and
delivery of, and the performance by the Company of each of its obligations
under, each of the Transaction Documents and the Contingent Warrants have
been duly and validly authorized by the Company, and each of the Transaction
Documents has been duly executed and delivered by the Company and constitutes
the valid and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as such enforcement
7
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to the applicability
of general principles of equity, and except as rights to indemnity and
contribution under such Transaction Document may be limited by Federal or
state securities laws.
(e) The execution and delivery of, and the performance
by the Company of each of its obligations under, each of the Second Amended
and Restated Investors' Rights Agreement dated August 27, 1996, as amended on
October 22, 1996 (the "Investors' Rights Agreement") among Xxxx X. Xxxxxx and
the investors listed in Exhibit A thereto, and the Amended and Restated
Co-Sale Agreement dated December 15, 1995, as amended on October 22, 1996
(the "Co-Sale Agreement") among the Company, Xxxx X. Xxxxxx and the holders
of the Company's Series C Preferred Stock and/or Series D Preferred Stock,
have been duly and validly authorized by the Company, and each of the
Investors' Rights Agreement and the Co-Sale Agreement has been duly executed
and delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general principles of
equity, and except as rights to indemnity and contribution under such
Investors' Rights Agreement and Co-Sale Agreement may be limited by Federal
or state securities laws. The amendments to each of the Investors' Rights
Agreement and the Co-Sale Agreement have been duly approved by the parties to
such Investors' Rights Agreement and Co-Sale Agreement, other than the
Company, in accordance with their respective terms and are in full force and
effect.
(f) The Securities have been duly authorized by the
Company, and, when executed by the Company and, in the case of the Notes,
authenticated by the Trustee in accordance with the Indenture or, in the case
of the Warrants, countersigned by the Warrant Agent in accordance with the
provisions of the Warrant Agreement, and, in the case of the Notes and the
Initial Warrants, delivered to the Initial Purchaser against payment therefor
in accordance with the terms hereof, and, in the case of the Contingent
Warrants, delivered to the holders of the Notes upon the occurrence of a
Contingent Event, will have been validly issued and delivered, and will
constitute valid and legally binding obligations of the Company, in the case
of the Notes, entitled to the benefits of the Indenture and, in the case of
the Warrants, entitled to the benefits of the Warrant Agreement and
enforceable in accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and the Securities conform in
all material respects to the summary descriptions thereof in the Offering
Memorandum. The Contingent Warrants have been duly authorized by the
Company, and when executed by the Company and authenticated by the Warrant
Agent in accordance with the provisions of the Warrant Agreement, will have
been validly issued and delivered and will constitute valid and legally
binding obligations of the Company, entitled to the benefits of the Warrant
Agreement, and enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and subject to
the applicability of general principles of equity, and the Contingent
Warrants conform in all material respects to the summary descriptions thereof
in the Offering Memorandum.
(g) When issued in accordance with the terms and
conditions contained in the Warrant Agreement upon exercise of the Warrants,
the Warrant Shares will be duly authorized,
8
validly issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights, other than the right of first refusal set forth in
the Investors' Rights Agreement which right has been properly waived. The
Warrant Shares have been duly reserved for issuance in accordance with the terms
of the Warrants and the Warrant Agreement.
(h) The Initial Warrants and the Contingent Warrants, when
issued, will represent the right to acquire upon exercise initially not less
than approximately 5.2% and 2.2% respectively, of the outstanding common equity
of the Company on a fully diluted basis as of the Closing Date (after giving
effect to the maximum number of shares of common equity of the Company
deliverable upon exercise, conversion or exchange of all vested stock options
and restricted stock, preferred stock and in the money warrants outstanding as
of the Closing Date including, without limitation, the Warrants (but not
including the Contingent Warrants) and excluding unvested outstanding stock
options and restricted stock repurchaseable at cost by the Company).
(i) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights, other than the
right of first refusal set forth in the Investors' Rights Agreement, and were
issued and sold in compliance in all material respects with all applicable
Federal and state securities laws. The Company has the authorized
capitalization as set forth in the Offering Memorandum.
(j) The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware with full 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 registered or qualified to
conduct its business and is in good standing in each jurisdiction wherein the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify and maintain good standing could not, singly or in the aggregate with
all other such failures, reasonably be expected to have a material adverse
effect on the condition (financial or other), business, prospects, liabilities
(contingent or otherwise) properties, net worth, solvency or results of
operations of the Company (any such event, a "MATERIAL ADVERSE EFFECT").
(k) The Amended and Restated Certificate of
Incorporation of the Company has been properly amended to provide that no
redemption rights exercisable by the holders of any of the Company's
preferred stock shall become exercisable before April 30, 2007.
(l) The Company has, on the date of this Agreement, no
subsidiaries.
(m) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the Company
or to which the Company or any of its properties or assets is subject, or
which question the validity of any of the Transaction Documents or the
Contingent Warrants or the right of the Company to enter into any of the
Transaction Documents or the Contingent Warrants or to consummate the
transactions contemplated hereby, that are not disclosed in the Offering
Memorandum. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency
or instrumentality. The Company is not involved in any strike, job action or
labor dispute with any group of employees, and, to the knowledge of the
Company, no such action or dispute is threatened. The Company has no
9
collective bargaining agreements with any of its employees. Except as set forth
in the Offering Memorandum, no employee has any agreement or contract, written
or verbal, regarding employment and each employee is employed on an "at will"
basis and has no right to any compensation following termination of employment
with the Company, except to the extent that any such agreement or contract or
any such compensation could not reasonably be expected to have a Material
Adverse Effect.
(n) No statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency and no injunction,
restraining order or order of any nature by a Federal or state court of
competent jurisdiction to which the Company is subject has been issued or to
the best knowledge of the Company is pending that (i) would interfere with or
adversely affect the issuance of the Securities or the Contingent Warrants or
(ii) would in any manner draw into question the validity of this Agreement,
any Transaction Document or the Contingent Warrants.
(o) The Company has not violated any Federal, state or
local law relating to discrimination in hiring, promotion or pay of
employees, except to the extent that any such violation could not reasonably
be expected to have a Material Adverse Effect.
(p) The Company is not (i) in violation of its articles of
incorporation or bylaws or other organizational documents, or (ii) in violation
of any statute, ordinance, law, administrative or governmental rule or
regulation or filing or judgment, injunction, order or decree of any court or
governmental agency or body, foreign or domestic, applicable to the Company or
its properties or assets (collectively, "LAW AND LEGAL REQUIREMENTS"), except
where any such violation could not, singly or in the aggregate with all other
such violations, reasonably be expected to have a Material Adverse Effect or
(iii) in breach of or in default in the performance of (including any event
which, with notice or lapse of time or both, would constitute a breach of or a
default in the performance of) any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness, agreement,
indenture, lease or other instrument to which the Company is a party or by which
the Company or any of its properties may be bound (collectively, "AGREEMENTS AND
INSTRUMENTS"), except (A) as may be disclosed in the Offering Memorandum or (B)
where any such breach or default could not, singly or in the aggregate with all
other such breaches and defaults, reasonably be expected to have a Material
Adverse Effect.
(q) The issuance, offer, sale and delivery of the
Securities, the issuance and delivery of the Contingent Warrants (assuming
the Contingent Warrants were issued concurrently with the Securities), the
execution, delivery and performance of the Transaction Documents and the
Contingent Warrants by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not: (i) require
any consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (collectively, "CONSENTS AND FILINGS"),
except (A) such as may be required under the Act in connection with the
performance of the Company's obligations under the Registration Rights
Agreements and the qualification of the Indenture under the 1939 Act in
connection with the consummation of the transactions contemplated by the
Notes Registration Rights Agreement and (B) compliance with the state
securities or Blue Sky laws of applicable jurisdictions; (ii) conflict with
or constitute a breach of or a default under (including any event which, with
notice or lapse of time or both, would constitute a breach of or a default
under), the articles of incorporation or bylaws or other organizational
documents of the Company; (iii) conflict with or
10
constitute a breach of or a default under (including any event which, with
notice or lapse of time or both, would constitute a breach of or a default
under) any Agreement or Instrument, except any such conflict, breach or default
that could not, singly or in the aggregate with all other such conflicts,
breaches and defaults, reasonably be expected to have a Material Adverse Effect;
(iv) violate any Law or Legal Requirement, except any such violation that could
not, singly or in the aggregate with all other such violations, reasonably be
expected to have a Material Adverse Effect; or (v) result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any Agreement or Instrument.
(r) No consents or waivers from any other person are
required for the execution, delivery and performance of this Agreement and
the other Transaction Documents and the Contingent Warrants by the Company
and the consummation of the transactions contemplated hereby and thereby,
other than such consents and waivers as have been obtained and are in full
force and effect.
(s) The financial statements of the Company included in
the Offering Memorandum, present fairly in all material respects the
financial position, results of operations and cash flows of the Company, at
the dates and for the periods to which they relate, and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis ("GAAP") and, in the case of such financial statements for
annual periods, have been audited by Deloitte & Touche LLP which has issued
an unqualified report thereon. The pro forma financial information included
in the Offering Memorandum (the "PRO FORMA INFORMATION") is in all respects
computationally accurate and has been prepared on a basis consistent with the
audited historical financial statements of the Company included in the
Offering Memorandum, except for the pro forma adjustments specified therein,
and give effect to assumptions made on a reasonable basis to give effect to
historical and proposed transactions and events described in the Offering
Memorandum. The statistical data included in the Offering Memorandum are
true and correct in all material respects. The Company has no material
liabilities (whether matured or unmatured, fixed or contingent) not disclosed
in the financial statements of the Company included in the Offering
Memorandum that are required to be so disclosed under GAAP, and is not aware
of any material contingent or unmatured liabilities not required to be so
disclosed, except expenses incurred in connection with this offering and
current liabilities incurred in the ordinary course of business subsequent to
the date of such financial statements. There are no loss contingencies (as
such term is used in Statement of Financial Accounting Standards No. 5 issued
by the Financial Accounting Standards Board in March 1975) which are not
adequately provided for in such financial statements.
(t) The projections contained in the Offering Memorandum
have been prepared by the Company and are based on reasonable and good faith
estimates and assumptions of the Company and the Company has no reason to
believe that such estimates and assumptions are not fair and reasonable.
Notwithstanding the preceding sentence, with respect to the projections and
the underlying assumptions upon which they are based contained in the
Offering Memorandum, the Company represents only that such projections were
prepared in good faith with a reasonable belief in the underlying assumptions
upon which the projections were based.
(u) Except as disclosed in the Offering Memorandum,
subsequent to the date as of which such information is given in the Offering
Memorandum, the Company has not incurred any liability or obligation, direct
or contingent, or entered into or agreed to enter into any
11
transaction, whether or not in the ordinary course of business, that is material
to the Company, and there has not been any material change in the capital stock,
or material increase in the short-term or long-term debt, of the Company or any
material adverse change, or any development involving or which could reasonably
be expected to involve a prospective material adverse change, in or affecting
the condition (financial or other), business, prospects, liabilities (contingent
or otherwise), properties, net worth, solvency or results of operations of the
Company (whether or not arising in the ordinary course of business), and there
have not been dividends or distributions of any kind declared, paid or made by
the Company on any class of its capital stock.
(v) The Company has good and, if applicable, marketable
title to all property (real and personal) described in the Offering
Memorandum as being owned by it (or so reflected in the financial statements
included in the Offering Memorandum), free and clear of all liens, claims,
security interests or other encumbrances, except such as are described in the
Offering Memorandum and except for any such lien, claim, security interest or
other encumbrance which could not, singly or in the aggregate with all other
liens, claims, security interests or encumbrances, reasonably be expected to
have a Material Adverse Effect, and all the property described in the
Offering Memorandum as being held under lease by the Company is, to the
Company's knowledge, held by it under valid, subsisting and enforceable
leases, with only such exceptions as in the aggregate are not materially
burdensome and do not interfere in any material respect with the conduct of
the business of the Company, and no default by the Company has occurred and
is continuing thereunder, except such as are described in the Offering
Memorandum or as could not, singly or in the aggregate with all such other
defaults, reasonably be expected to have a Material Adverse Effect, and to
the knowledge of the Company no material defaults by the landlord are
existing under any such lease. The Company possesses or has rights to use
all of the property that is necessary for the conduct of the business of the
Company as set forth in the Offering Memorandum. The number of Coinstar
units installed and operating is not less than that set forth in the Offering
Memorandum.
(w) Except as permitted by the Act or otherwise agreed
to by the Initial Purchaser, the Company has not distributed and, prior to
the later to occur of the Closing Date and completion of the Initial
Distribution of the Securities (which includes the sale by the Initial
Purchaser), will not distribute any offering material in connection with the
offering and sale of the Securities other than the Preliminary Offering
Memorandum and Offering Memorandum (and any amendment or supplement thereto
in accordance with Section 4(c) hereof).
(x) Except as set forth in the Offering Memorandum, the
Company has all such permits, licenses, franchises, certificates of need and
other approvals or authorizations of governmental or regulatory authorities
("PERMITS") as are necessary under applicable law to own its properties and
to conduct its businesses in the manner conducted as of the Closing Date as
described in the Offering Memorandum, except to the extent that the failure
to have any such Permit could not, singly or in the aggregate with all other
such failures, reasonably be expected to have a Material Adverse Effect; the
Company has fulfilled and performed, in all material respects, all its
material obligations with respect to the Permits; and, except as described in
the Offering Memorandum, none of the Permits contains any restriction that is
materially burdensome to the Company.
(y) Neither the Company nor, to the knowledge of the
Company, any employee or agent of the Company has made any payment of funds
of the Company or received or
12
retained any funds in violation of any law, rule or regulation, which violation
could, singly or in the aggregate with all other such violations, reasonably be
expected to have a Material Adverse Effect.
(z) Except as disclosed in the Offering Memorandum, the
Company has filed all tax returns required to be filed, and such returns are
true and correct in all material respects, and the Company is not delinquent
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto, except where the failure to file any
such return or make any such payment could not, singly or in the aggregate
with all other such failures, reasonably be expected to have a Material
Adverse Effect. The Company does not know of any material proposed additional
tax assessments against it.
(aa) Except as described in the Offering Memorandum, no
holder of any security of the Company (other than holders of the Securities)
has any right to request or demand registration of any security of the
Company because of the consummation of the transactions contemplated by the
Transaction Documents and the Contingent Warrants. Except as described in
the Offering Memorandum, other than the Warrants to be issued and sold
pursuant to the Warrant Agreement, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no commitments or
arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable or exercisable for capital stock of
the Company, and there are no rights or obligations of the Company to redeem
or repurchase, or rights of any holder of any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company to cause the Company, to redeem or repurchase,
any shares of capital stock of the Company or any security convertible into
or exchangeable or exercisable for capital stock of the Company.
(bb) Except as set forth in the Offering Memorandum, the
Company owns or possesses or has the right to use all patents, trademarks,
trademark registrations, service marks, service mark registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights described
in the Offering Memorandum as being owned, possessed or used by it or
necessary for the conduct of its business (collectively, the "INTELLECTUAL
PROPERTY"), except to the extent that the failure to own or possess such
Intellectual Property could not, singly or in the aggregate with all such
other failures, reasonably be expected to result in any Material Adverse
Effect, and the Company is not aware of any claim, or basis for a claim, to
the contrary or any challenge, or basis for a challenge, by any other person
to the rights of the Company with respect to the foregoing. The use of such
Intellectual Property in connection with the business and operations of the
Company does not infringe on the rights of any person or entity, except to
the extent that any such infringement could not, singly or in the aggregate
with all such other infringements, reasonably be expected to result in any
Material Adverse Effect. No royalties or fees are payable by the Company to
other persons or entities by reason of the ownership or use of any
Intellectual Property. To the knowledge of the Company, no employee of the
Company is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any Court or administrative agency, that would interfere
with such employee's duties to the Company or that would conflict with the
Company's business except as set forth in the Offering Memorandum. Neither
the execution nor delivery of the Transaction Documents or the consummation
of the transactions contemplated hereby will, to the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract, covenant or instrument under
which any employee is obligated.
13
(cc) The Company is not and, upon sale of the Securities
to be issued and sold hereby in accordance herewith and the application of
the net proceeds to the Company of such sale as described in the Offering
Memorandum under the caption "Use of Proceeds," will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(dd) When the Securities are issued and delivered
pursuant to this Agreement and the applicable Transaction Documents, such
Securities will not be of the same class (within the meaning of Rule
144A(d)(3) under the Act) as any security issued by the Company that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated interdealer
quotation system.
(ee) Neither the Company nor any of its affiliates, has
directly, or through any agent (provided that no representation is made as to
the Initial Purchaser or any person acting on its behalf): (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Act) that is or will be integrated with the
offering and sale of the Securities in a manner that would require the
registration of the Securities under the Act; (ii) engaged in any form of
general solicitation or general advertising (within the meaning of Regulation
D under the Act) in connection with the offering of the Securities including,
but not limited to, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising; or (iii) engaged in any directed
selling efforts within the meaning of Rule 903 under the Act and the
Commission's Release No. 33-6883. No securities of the same class as the
Notes or Warrants have been issued and sold by the Company within the
six-month period immediately prior to the date hereof, except for the sale of
100,000 shares of Series E-1 Preferred Stock, warrants to purchase 350,000
shares of Series E-2 Preferred Stock and warrants to purchase 550,000 shares
of Series E-3 Preferred Stock.
(ff) Assuming (i) that the representations and warranties
in Section 2 hereof are true and correct, (ii) that the Initial Purchaser
complies with the covenants set forth in Section 2 hereof and (iii) that each
person to whom the Initial Purchaser offers, sells or delivers the Securities
is an Eligible Purchaser, the purchase and sale of the Securities pursuant
hereto (including the Initial Purchaser's proposed offering of the Securities
on the terms and in the manner set forth in the Offering Memorandum and
Section 2 hereof) is exempt from the registration requirements of the Act.
(gg) The Company is in compliance with, and not subject
to any liability under, the common law and all applicable federal, state and
local laws, regulations, rules, codes, ordinances, directives, and orders
relating to pollution or to protection of public or employee health or safety
or to the environment, including, without limitation, those that relate to
any Hazardous Material (as defined herein) ("ENVIRONMENTAL LAWS"), except, in
each case, where noncompliance or liability, singly or in the aggregate with
all other such noncompliance and liabilities, could not reasonably be
expected to have a Material Adverse Effect. The term "HAZARDOUS MATERIAL"
means any pollutant, contaminant or waste, or any hazardous, dangerous, or
toxic chemical, material, waste, substance or constituent subject to
regulation under any Environmental Law.
(hh) The Company is not, nor will it be, after giving
effect to the issuance of the Securities and the execution, delivery and
performance of this Agreement and the
14
consummation of the transactions contemplated hereby, (i) insolvent, (ii) left
with unreasonably small capital with which to engage in its existing businesses
or other businesses in which the Company presently proposes to engage or (iii)
incurring debts beyond its ability to pay such debts as they mature.
(ii) The Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date, contains all the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the Act.
(jj) Deloitte & Touche LLP are independent public
accountants with respect to the Company as required by the Act.
(kk) The Company maintains insurance of the types and in
the amounts that are reasonable for its business as set forth in the Offering
Memorandum, except where the failure to maintain such insurance could not
reasonably be expected to have a Material Adverse Effect.
(ll) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed and access to assets is permitted in accordance
with management's general and specific authorizations; and (ii) transactions
are recorded as necessary to permit the preparation of financial statements
in conformity with GAAP and to maintain accountability for assets.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees 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 Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or Offering Memorandum (including the Exhibits
thereto) or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except, with
respect to the Initial Purchaser, insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to the Initial Purchaser furnished in writing to the Company by or on
behalf of the Initial Purchaser expressly for use therein. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have; PROVIDED, HOWEVER, that the indemnification contained in this
paragraph (a) with respect to the Preliminary Offering Memorandum shall not
inure to the benefit of the Initial Purchaser (or to the benefit of any person
controlling the Initial Purchaser) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Securities by the Initial
Purchaser to any person if such untrue statement or alleged untrue statement
contained in, or omission or alleged omission of a material fact from, the
Preliminary Offering Memorandum upon which such loss, claim, damage, liability
or expense is based was completely corrected in the Offering Memorandum and that
the Initial Purchaser sold Securities to that person without sending or giving
at or prior to the written confirmation of such sale, a copy of the Offering
Memorandum (as
15
then amended or supplemented), of which the Company had previously furnished
sufficient copies to the Initial Purchaser as required hereby.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, and its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the indemnity from the Company
to the Initial Purchaser set forth in paragraph (a) hereof, but only with
respect to information relating to the Initial Purchaser furnished in writing
by or on behalf of the Initial Purchaser expressly for use in the Preliminary
Offering Memorandum or Offering Memorandum or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Company, any of its directors or officers, or any such controlling person
based on the Preliminary Offering Memorandum or Offering Memorandum, or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against the Initial Purchaser pursuant to this paragraph (b), the
Initial Purchaser shall have the rights and duties given to the Company by
paragraph (c) (except that if the Company shall have assumed the defense
thereof the Initial Purchaser shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the Initial Purchaser's expense),
and the Company, its directors and officers, and any such controlling person
shall have the rights and duties given to the Initial Purchaser by paragraph
(c). The foregoing indemnity agreement shall be in addition to any liability
which the Initial Purchaser may otherwise have.
(c) If any action, suit or proceeding shall be brought
against the parties or any person entitled to indemnification under this
Section 6 (the "INDEMNIFIED PARTIES") in respect of which indemnity may be
sought, the indemnified parties shall promptly notify the parties against
whom indemnification is being sought (the "INDEMNIFYING PARTIES"), and such
indemnifying parties shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified parties and
payment of all reasonable fees and expenses. The indemnified parties shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the indemnified parties
unless (i) the indemnifying parties have agreed to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel reasonably satisfactory to the indemnified parties on a timely
basis, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both (a) the indemnified parties
and (b) any of the indemnifying parties, and the indemnified parties shall
have been advised by its counsel that representation of such indemnified
party and the indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the indemnified parties). It is understood, however,
that the indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
the indemnified parties, which firm shall be designated in writing by the
indemnified party and be reasonably acceptable to the indemnifying party, and
that all such fees and expenses shall be reimbursed on a monthly basis. The
indemnifying parties shall not be liable for any settlement of any such
action, suit or proceeding effected without their written consent (which
shall not be unreasonably withheld or delayed), but if settled with such
written
16
consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless each of the indemnified parties, to the extent provided in
paragraph (a) or (b), as applicable, against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section
6 is unavailable for any reason to an indemnified party under paragraphs (a)
or (b) hereof or is insufficient to hold any such indemnified party
completely harmless in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities, or
(ii) if the allocation provided by clause (i) above 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 Company on the one hand and the Initial Purchaser on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Initial Purchaser on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Initial Purchaser, in each case as set forth in
the table on the cover page of the Offering Memorandum. The relative fault
of the Company on the one hand and the Initial Purchaser on the other hand
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or by the Initial Purchaser on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 6
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or depending on
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 6, the Initial Purchaser shall not be required to contribute any
amount in excess of the purchase discount or commission applicable to the
Notes purchased by the Initial Purchaser hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 6 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses
are incurred. Each successor to the Initial Purchaser or any person who
controls the Initial Purchaser, and each successor to the Company, or any
person controlling the Company and their respective
17
directors or officers, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
(g) No indemnifying party shall, without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party, or indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional written
release of such indemnified party, in form and substance reasonably
satisfactory to such indemnified party, from all liability on claims that are
the subject matter of such proceeding.
7. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS. The
obligation of the Initial Purchaser to purchase the Securities hereunder is
subject to the fulfillment, in the Initial Purchaser's sole discretion, of
the following conditions:
(a) At the time of execution of this Agreement and on
the Closing Date, no order or decree preventing the use of the Offering
Memorandum or any amendment or supplement thereto, or any order asserting
that the transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, be contemplated. No order suspending
the sale of the Securities in any jurisdiction shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, shall be contemplated.
(b) Subsequent to the date hereof and prior to the
Closing Date, the conduct of the business and operations of the Company has
not been interfered with by strike, fire, flood, hurricane, accident or other
calamity (whether or not insured) and, except as otherwise stated in the
Offering Memorandum, the properties of the Company have not sustained any
loss or damage (whether or not insured) as a result of any such occurrence,
except any such interference, loss or damage which could not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(c) The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxx Godward LLP counsel for the Company, dated
the Closing Date and addressed to the Initial Purchaser, in form and
substance satisfactory to Xxxxxx & Xxxxxxx, counsel for the Initial
Purchaser, to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the State of Delaware
with full 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 such counsel's knowledge, is duly registered
and qualified to conduct its business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its properties or the
conduct of its business requires such registration or qualification, except
(a) in Massachusetts and New York, where the Company is not in good standing,
and (b) where the failure so to register or qualify or to be in good standing
could not, singly or in the aggregate with all other such failures,
reasonably be expected to have a Material Adverse Effect;
18
(ii) The authorized capital stock of the Company,
and to such counsel's knowledge, the number of outstanding shares of the
Company's Capital Stock as of the date of the Offering Memorandum is as set
forth in the second paragraph under the caption "Description of Capital
Stock" in the Offering Memorandum, and to such counsel's knowledge, the
number of the Company's outstanding warrants is as set forth under the
caption "Warrants" in the Offering Memorandum.
(iii) The Company has corporate power and authority
to enter into this Agreement and the other Transaction Documents and to
issue, sell and deliver the Notes, the Initial Warrants and the Contingent
Warrants to be sold by it to the Initial Purchaser as provided herein;
(iv) The Notes, the Initial Warrants and the
Contingent Warrants have been duly and validly authorized by the Company;
(v) The Warrant Shares have been duly reserved by
the Company for issuance upon exercise of the Initial Warrants in sufficient
number to cover the exercise of all of the Initial Warrants at the initial
number of Warrant Shares deliverable upon exercise of the Initial Warrants,
and the issuance of the Warrant Shares upon exercise of the Warrants has been
duly and validly authorized, and the Warrant Shares, when paid for and
delivered in accordance with the terms of the Warrants and the Warrant
Agreement, will be validly issued, fully paid and nonassessable. The shares
of Common Stock issuable upon exercise of the Contingent Warrants have been
duly reserved by the Company for issuance upon exercise of the Contingent
Warrants in sufficient number to cover the exercise of all the Contingent
Warrants at the initial number of shares deliverable upon exercise of the
Contingent Warrants, and the issuance of the initial number of shares
issuable upon exercise of the Warrants has been duly and validly authorized,
and such shares, when paid for and delivered in accordance with the terms of
the Contingent Warrants and the Initial Warrant Agreement, will be validly
issued, fully paid and nonassessable. To such counsel's best knowledge, no
holder of capital stock of the Company has preemptive or similar rights
applicable to the Initial Warrants, or the Warrant Shares or the Contingent
Warrants other than the right of first refusal set forth in the Investors'
Rights Agreement which has been waived;
(vi) (w) the issuance and delivery of the
Contingent Warrants (assuming the Contingent Warrants were issued
concurrently with the Securities), (x) the offer, sale or delivery of the
Securities and (y) the execution, delivery or performance by the Company of
this Agreement and the other Transaction Documents, compliance by the Company
with the provisions hereof or thereof and consummation by the Company of the
transactions contemplated hereby or thereby do not conflict with and do not
constitute a breach of, or a default under (including any event which, with
notice or lapse of time or both, would become a breach of or a default
under), (a) the Amended and Restated Certificate of Incorporation, as
amended, or bylaws of the Company or (b) any Agreement or Instrument which is
known to such counsel, except, with respect to this clause (b) any such
conflict, breach or default that could not, singly or in the aggregate, with
all such other conflicts, breaches and defaults, reasonably be expected to
have a Material Adverse Effect;
(vii) To the best knowledge of such counsel, there
are no legal or governmental proceedings pending or threatened against the
Company or to which the Company or any of its property or assets is subject,
which (A) are not disclosed in the Offering
19
Memorandum and which, if adversely decided, could, singly or in the aggregate
with all other such proceedings, reasonably be expected to have a Material
Adverse Effect or (B) seek to restrain or prohibit the consummation of the
transactions contemplated by the Transaction Documents;
(viii) To the best knowledge of such counsel, except
as provided under the Investors' Rights Agreement, no holder of any
securities of the Company (except for the holders of the Notes and the
Initial Warrants) or any other person has the right to have any securities of
the Company included in any registration statement contemplated by the
Registration Rights Agreements. To the best knowledge of such counsel,
except as described in the Offering Memorandum, other than the Warrants,
there are no (a) outstanding options, warrants or other rights calling for
the issuance of any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company, (b) commitments or arrangements to issue any shares of capital
stock of the Company or any security convertible into or exchangeable or
exercisable for capital stock of the Company, or (c) obligations of the
Company to redeem or repurchase any shares of capital stock of the Company or
any security convertible into or exchangeable or exercisable for capital
stock of the Company;
(ix) No registration of any of the Securities under
the Act is required for the sale of the Securities to the Initial Purchaser
as contemplated in this Agreement or for the Exempt Resales (relying on (A)
the accuracy of the representations made by each person who buys the
Securities in the Exempt Resales that such person is an Eligible Purchaser,
(B) the accuracy of the Initial Purchaser's representations and those of the
Company in this Agreement regarding the absence of general solicitation and
general advertising in connection with the Exempt Resales and (C) the
accuracy of the representations made by each Accredited Investor who
purchases Securities pursuant to an Exempt Resale as set forth in the letter
of representation executed by such Accredited Investor in the form of Annex A
to the Offering Memorandum);
(x) The statements in the Offering Memorandum,
entitled "Offering Memorandum Summary - The Company," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operation," "Business," "Certain Transactions" and "Description of Capital
Stock," insofar as they are descriptions of contracts, agreements or other
legal documents (other than the Indenture or the Notes, as to which such
counsel expresses no opinion), or refer to statements of law or legal
conclusions (except insofar as they pertain to the Indenture or the Notes, as
to which such counsel expresses no opinion) are true and accurate in all
material respects;
(xi) Any preemptive rights or rights of first
refusal known to such counsel that might permit any existing holder of any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company to purchase the
Notes, the Initial Warrants, the Contingent Warrants the Warrant Shares or
any portion thereof, including without limitation those set forth in the
Investors' Rights Agreement, have been properly waived;
(xii) All consents and approvals known to such
counsel to be required under the Company's Amended and Restated Certificate
of Incorporation and under any Agreement or Instrument for the issuance,
offer, sale and delivery of the Securities, the execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions
20
contemplated hereby, including without limitation requisite consents under the
Investors' Rights Agreement with respect to the granting of registration rights
under the Registration Rights Agreements, have been obtained;
(xiii) The Amended and Restated Certificate of
Incorporation of the Company has been amended by all necessary corporate action
to provide that no redemption rights exercisable by the holders of any of the
Company's Preferred Stock shall become exercisable before April 30, 2007; and
(xiv) Such counsel will not be required to make any
investigation or examination of the accuracy or completeness of, or otherwise
verified, the information furnished with respect to the Offering Memorandum.
Such counsel will have considered, reviewed and discussed with certain officers
and employees of the Company, and with you, the information furnished. On the
basis of such consideration, review and discussion, but without any independent
investigation, examination or verification, no facts will have come to such
counsel's attention that will have caused such counsel to believe that the
Offering Memorandum as of its date and as of the Closing 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 express no belief with respect to (A) the financial statements and
related schedules and financial and statistical data included in the Offering
Memorandum, (B) the financial projections and related schedules and financial
and statistical data included therein, (C) the underlying assumptions to the
financial projections, (D) any summary or description of the Indenture or the
Notes, (E) the Blue Sky legends on pages two through four of the Offering
Memorandum, (F) the sections of the Offering Memorandum entitled "Certain
Federal Income Tax Considerations," "Plan of Distribution," "Transfer
Restrictions" and "Book Entry; Delivery and Form," and (G) any Annex or Exhibit
to the Offering Memorandum (as to which such counsel expresses no view).
In giving such opinion, 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
certificates of public officials; PROVIDED, HOWEVER, that such certificates
have been delivered to the Initial Purchaser prior to the Closing Date. The
opinions rendered by such counsel will be subject to (i) applicable
limitations of bankruptcy, insolvency, receivership, moratorium,
reorganization, fraudulent conveyance and other similar laws providing relief
to debtors and (ii) general principals of equity, whether considered in a
proceeding in equity or at law. In addition, with respect to any opinion
interpreting the laws of the State of New York, such counsel may state that,
although they have made such investigation of the laws of the State of New
York as they have deemed necessary to render the opinions contemplated
hereby, they are not generally familiar with other New York statutes,
regulations, rules, guidelines, common law, rules of construction or other
legal authorities which might influence the construction or interpretation of
such law in ways which such counsel naturally could not anticipate.
(d) The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel
for the Company, dated the Closing Date and addressed to the Initial
Purchaser, in form and substance satisfactory to Xxxxxx & Xxxxxxx, counsel
for the Initial Purchaser, to the effect that:
21
(i) This Agreement and each of the other Transaction
Documents (other than the Securities) have been duly authorized, executed and
delivered by the Company and each of the Transaction Documents are valid, legal
and binding agreements of the Company, enforceable against the Company in
accordance with their respective terms;
(ii) When the Securities have been executed by the
Company and, in the case of the Notes, authenticated by the Trustee in
accordance with the Indenture or, in the case of the Warrants, authenticated
by the Warrant Agent in accordance with the terms of the Warrant Agreement,
and, in each case, delivered to the Initial Purchaser against payment
therefor in accordance with the terms hereof, will have been validly issued
and delivered, and will constitute valid and binding obligations of the
Company, entitled to the benefits of, with respect to the Notes, the
Indenture and, with respect to the Warrants, the Warrant Agreement. The
Contingent Warrants, when executed by the Company and authenticated by the
Warrant Agent in accordance with the provisions of the Warrant Agreement,
will have been validly issued and delivered and will constitute valid and
binding obligations of the Company, entitled to the benefits of the Warrant
Agreement;
(iii) (x) The offer, sale or delivery of the
Securities and (y) the execution, delivery or performance by the Company of
this Agreement and the other Transaction Documents, compliance by the Company
with the provisions hereof and thereof and consummation by the Company of the
transactions contemplated hereby and thereby do not and will not result in
any violation of any Law or Legal Requirement which in such counsel's
experience are customarily applicable to commercial transactions of the type
contemplated by the Transaction Documents (assuming compliance with all
applicable state securities and Blue Sky laws and, in the case of the
Registration Rights Agreements, the Act, the Exchange Act and the 1939 Act);
(iv) No Consent or Filing based on Law or Legal
Requirements is required on the part of the Company for the valid issuance and
sale of the Securities to the Initial Purchaser as contemplated by this
Agreement or the execution, delivery or performance by the Company of each of
the Transaction Documents, except (A) as have been obtained and are in full
force and effect and (B) as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Securities or such as may be
required under the Act, the Exchange Act or the 1939 Act in connection with the
performance by the Company of its obligations under the Registration Rights
Agreements, as to which such counsel expresses no opinion;
(v) No qualification of the Indenture under the
1939 Act is required in connection with the offer and sale of the Securities
contemplated hereby (except for sales of Notes pursuant to the Exchange
Offer, as defined in the Notes Registration Rights Agreement) or in
connection with the Exempt Resales;
(vi) Assuming that the proceeds of issuance of the
Securities are used as set forth in the Offering Memorandum, neither the
consummation of the transactions contemplated hereby nor the sale, issuance,
execution or delivery of the Securities, nor the application of the proceeds
therefrom (if applied as described in the Offering Memorandum under the caption
"Use of Proceeds"), will violate Regulation G (12 C.F.R. Part 207), T (12 C.F.R.
Part 220), U (12 C.F.R. Part 221) or X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System; and
22
(vii) The statements in the Offering Memorandum,
insofar as they are (a) set forth under the headings "Certain Federal Income
Tax Considerations," "Transfer Restrictions" or "Book Entry; Delivery and
Form," or (b) wheresoever set forth, constitute descriptions of the Indenture
or the Notes, or (c) refer to statements of law or legal conclusions
pertaining to any of the foregoing, are true and accurate in all material
respects and summarize fairly the information required to be shown.
In giving such opinion, 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 the officers of the Company and
certificates of public officials; PROVIDED, HOWEVER, that such certificates
have been delivered to the Initial Purchaser prior to or on the Closing Date.
The opinions rendered by such counsel will be subject to (i) applicable
limitations of bankruptcy, insolvency, receivership, moratorium,
reorganization, fraudulent conveyance and other similar laws providing relief
to debtors and (ii) general principals of equity, whether considered in a
proceeding in equity or at law. In addition, with respect to any opinion
interpreting the laws of the State of New York, such counsel may state that,
although they have made such investigation of the laws of the State of New
York as they have deemed necessary to render the opinions contemplated
hereby, they are not generally familiar with other New York statutes,
regulations, rules, guidelines, common law, rules of construction or other
legal authorities which might influence the construction or interpretation of
such law in ways which such counsel naturally could not anticipate.
(e) (i) There shall not have been any change in the
capital stock of the Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary course of business)
from that set forth or contemplated in the Offering Memorandum; (ii) there
shall not have been, since the respective dates as of which information is
given in the Offering Memorandum, except as may otherwise be expressly stated
in the Offering Memorandum, any material adverse change in the condition
(financial or other), business, prospects, liabilities (contingent or
otherwise), properties, net worth, solvency or results of operations of the
Company; (iii) the Company shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business),
that are material to the Company, other than those reflected in the Offering
Memorandum; (iv) each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date; (v) the Company shall have executed and
delivered each Transaction Document; and (vi) the Initial Purchaser shall
have received a certificate, dated the Closing Date and signed on behalf of
the Company by the President and the Chief Financial Officer of the Company
(or such other officers as are acceptable to the Initial Purchaser), to the
effect set forth in this Section 7(e) and in Section 7(f) hereof, to the
effect that the Company is not, nor will it be, after giving effect to the
issuance of the Securities and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby,
(x) insolvent, (y) left with unreasonably small capital with which to engage
in its existing businesses or other businesses in which the Company presently
proposes to engage or (z) incurring debts beyond its ability to pay such
debts as they mature and to the effect that, to the knowledge of such
individuals, the Offering Memorandum, and any amendment or supplement
thereto, does not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
23
(f) The Company shall not have failed at or prior to the
Closing Date to have performed or complied in any material respect with any
of its agreements herein contained and required to be performed or complied
with by it hereunder at or prior to the Closing Date.
(g) The Securities and the Contingent Warrants shall
have been approved for trading on PORTAL.
(h) The Initial Purchaser shall be satisfied in its sole
discretion with the terms and provisions of the Transaction Documents and the
Contingent Warrants.
(i) The Company shall have furnished or caused to be
furnished to the Initial Purchaser such further certificates, documents and
opinions as the Initial Purchaser shall have reasonably requested.
(j) There shall not have been made any amendment or
supplement to the Offering Memorandum to which the Initial Purchaser has
reasonably objected.
(k) At the time of the execution of this Agreement, the
Initial Purchaser shall have received from Deloitte & Touche LLP a letter
dated as of the Closing Date in form and substance reasonably satisfactory to
the Initial Purchaser in the form contemplated for "comfort letters addressed
to underwriters" by Statement of Auditing Standards No. 72 ("SAS 72"), and in
form and substance previously provided to for review and agreed to as
satisfactory to the Initial Purchaser and to counsel for the Initial
Purchaser.
(l) [Intentionally Omitted].
(m) Any preemptive rights or rights of first refusal
that might permit any existing holder of any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company to purchase the Securities, the Warrant Shares
or any portion thereof, including without limitation those set forth in the
Investors' Rights Agreement, have been properly waived, in form and substance
satisfactory to the Initial Purchaser in its sole discretion.
(n) All consents or approvals required under the
Company's Amended and Restated Certificate of Incorporation and under any
Agreement or Instrument for the issuance, offer, sale and delivery of the
Securities, the issuance and delivery of the Contingent Warrants, the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, including
without limitation requisite consents under the Investors' Rights Agreement
with respect to the granting of registration rights under the Registration
Rights Agreements, shall have been obtained, in form and substance
satisfactory to the Initial Purchaser in its sole discretion.
(o) The Amended and Restated Certificate of
Incorporation of the Company shall have been amended, in form and substance
satisfactory to the Initial Purchaser in its sole discretion, to provide that
no redemption rights exercisable by the holders of any of the Company's
preferred stock shall become exercisable before April 30, 2007.
24
(p) The Initial Purchaser shall have received on the
Closing Date an opinion of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchaser, dated the Closing Date and addressed to the Initial Purchaser,
regarding the enforceability of the Notes, the Registration Rights
Agreements, the Warrant Agreement and the Indenture.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to the Initial Purchaser and Xxxxxx &
Xxxxxxx, counsel for the Initial Purchaser.
Any certificate or document signed by any officer of the
Company and delivered to the Initial Purchaser, or to counsel for the Initial
Purchaser, at the Closing, shall be deemed a representation and warranty by
the Company to the Initial Purchaser as to the statements made therein.
Acceptance of the proceeds of the issuance and sale of the
Securities shall be a representation and warranty by the Company to the
Initial Purchaser that each of the conditions set forth in clauses (a), (b),
(d), (e), (f), (g), (h), (k) and (l) of this Section 7 has been satisfied or,
to the knowledge of the Company, waived.
8. EXPENSES.
(a) Whether or not the purchase and sale of the
Securities hereunder is consummated or this Agreement is terminated pursuant
to Section 9 hereof, the Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it
of its obligations hereunder: (i) the preparation, word processing, printing,
delivery and reproduction of the Preliminary Offering Memorandum and the
Offering Memorandum (including the exhibits thereto), and each amendment or
supplement to any of them, this Agreement and each of the other Transaction
Documents (including the reasonable disbursements of the Initial Purchaser's
counsel in connection therewith); (ii) the delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the
Offering Memorandum, the Preliminary Offering Memorandum and all amendments
or supplements as may be reasonably requested for use in connection with the
offering and sale of the Securities as part of the Initial Distribution
thereof pursuant to Exempt Resales; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities and
the Contingent Warrants, including any stamp taxes in connection with the
original issuance and sale of the Securities and the Contingent Warrants;
(iv) the printing (or reproduction) and delivery of the preliminary and
supplemental Blue Sky Memoranda and all other agreements and documents
printed (or reproduced) and delivered in connection with the offering of the
Securities; (v) the application for quotation of the Securities and the
Contingent Warrants on PORTAL; (vi) the qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several states as
provided in Section 4(f) hereof (including the fees, expenses and
disbursements of counsel for the Initial Purchaser relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such qualification); (vii) the
performance by the Company of its obligations under the Warrant Agreement and
the Registration Rights Agreements (including fees and expenses of the
Trustee, the Warrant Agent and the transfer agent and registrar of the
Warrant Shares, including fees and expenses of their respective counsel);
(viii) the fees and expenses of the Company's accountants and the fees and
25
expenses of counsel (including local and special counsel) for the Company; and
(ix) the reasonable fees and expenses of Xxxxxx & Xxxxxxx, counsel for the
Initial Purchaser. The Company hereby agrees that it will pay in full on the
Closing Date (or in the event that this Agreement is terminated or there shall
be a failure to consummate the transaction hereunder, upon request by such
counsel) the fees and expenses referred to in clauses (vi) and (ix) of this
Section 8 by delivering to counsel for the Initial Purchaser on such date a
check payable to such counsel in the requisite amount.
(b) If the purchase and sale of the Securities hereunder
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 9 hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Initial
Purchaser in payment for the Securities on the Closing Date after all
conditions set forth herein have been satisfied, the Company shall reimburse
the Initial Purchaser promptly upon demand for all out-of-pocket expenses
(including reasonable fees and expenses of counsel) that shall have been
incurred by the Initial Purchaser in connection with the proposed purchase
and sale of the Securities and the other transactions contemplated hereby.
9. TERMINATION OF AGREEMENT. This Agreement shall be
subject to termination in the absolute discretion of the Initial Purchaser,
without liability on the part of the Initial Purchaser to the Company, by
notice to the Company, if at or prior to the delivery and payment for
Securities, (i) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the effect of which
on the financial markets of the United States or the market for the
Securities is such as to make it, in the sole judgment of the Initial
Purchaser, impracticable or inadvisable to commence or continue the offering
of the Securities on the terms set forth in the Offering Memorandum or to
enforce contracts for the resale of the Securities by the Initial Purchaser.
Notice of such termination may be given to the Company by telecopy or
telephone and shall be subsequently confirmed by letter.
10. INFORMATION FURNISHED BY THE INITIAL PURCHASER. The
statements set forth in the last paragraph on the cover page and in the
fourth and seventh paragraphs under the caption "Plan of Distribution" in the
Offering Memorandum, constitute the only information furnished by or on
behalf of the Initial Purchaser as such information is referred to in
Sections 5(b) and 6 hereof.
11. MISCELLANEOUS. Except as otherwise provided in Sections
4 and 9 hereof, notice given pursuant to any provision of this Agreement
shall be in writing and shall be delivered (i) if to the Company, at the
office of the Company at 00000 XX 00xx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000,
Attention: Xxxx X. Xxxxxx, or (ii) if to the Initial Purchaser, to Xxxxx
Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
26
This Agreement has been and is made solely for the benefit of
the Initial Purchaser and the Company, and their respective directors,
officers and the controlling persons referred to in Section 6 hereof and
their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the terms "successors and
assigns" as used in this Agreement shall include a purchaser from the Initial
Purchaser of any of the Securities in such purchaser's status as such
purchaser.
12. SURVIVAL. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company set
forth in this Agreement or made by or on behalf of the Company (including,
pursuant to any officer's certificate) pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by
or on behalf of the Initial Purchaser, any director, officer, employee or
agent of the Initial Purchaser or any controlling person referred to in
Section 6 hereof, and (ii) delivery of and payment for the Securities. The
respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 8 and 13 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
13. APPLICABLE LAW; COUNTERPARTS; CONSENT TO JURISDICTION.
This Agreement shall be governed by and construed in accordance with the law
of the State of New York applicable to contracts made and to be performed
within the State of New York. Each of the parties hereto hereby irrevocably
and unconditionally: (i) submits itself and its property in any legal action
or proceeding relating to this Purchase Agreement or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
jurisdiction of the courts of the State of New York and the courts of the
United States of America for the Southern District of New York, and appellate
courts thereof, and consents and agrees to such action or proceeding being
brought in such courts; and (ii) waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in any inconvenient court
and agrees not to plead or claim the same.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchaser.
Very truly yours,
COINSTAR, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
-----------------------------
Title: CEO and President
-----------------------------
Confirmed as of the date first
above mentioned.
XXXXX XXXXXX INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------
Title: Vice President
-----------------------------
