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Exhibit 1.1
EXECUTION COPY
PUEBLO XTRA INTERNATIONAL, INC.
$85,000,000
9 1/2% SERIES B SENIOR NOTES DUE 2003
PURCHASE AGREEMENT
April 24, 1997
NationsBanc Capital Markets, Inc.
Scotia Capital Markets (USA), Inc.
As Representatives of the Initial Purchasers
c/o NationsBanc Capital Markets, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Pueblo Xtra International, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the parties named in Schedule I hereto
(the "Initial Purchasers" and, individually, each an "Initial Purchaser"), for
whom you are acting as representatives (the "Representatives"), $85,000,000
principal amount of its 9 1/2% Series B Senior Notes Due 2003 (the "Notes"). The
Notes are to be issued under an indenture (the "Indenture") to be dated as of
April 29, 1997 between the Company and United States Trust Company of New York,
as trustee (the "Trustee"). If you are the only Initial Purchasers, all
references herein to the Representatives shall be deemed to be to the Initial
Purchasers.
The sale of the Notes to the Initial Purchasers will be made without
registration of the Notes under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. You have advised the Company that the
Initial Purchasers will offer and sell the Notes purchased by them hereunder in
accordance with Section 4 hereof as soon as you deem advisable. The Notes will
have the benefit of certain registration rights, pursuant to a Registration
Rights Agreement, to be dated as of April 29, 1997, between the Company and the
Initial Purchasers (the "Registration Rights Agreement").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum, dated April 4, 1997, (the "Preliminary
Memorandum") and a final offering memorandum, dated April 24, 1997 (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company and the Notes. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and
the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the
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Notes by the Initial Purchasers. Unless stated to the contrary, all references
herein to the Final Memorandum are to the Final Memorandum at the Execution Time
(as defined below) and are not meant to include any amendment or supplement, or
any information incorporated by reference therein, subsequent to the Execution
Time.
At or prior to the Execution Time, the Company is entering into an
amended and restated Credit Agreement dated as of July 21, 1993 among the
Company and certain of its subsidiaries and The Bank of Nova Scotia and
NationsBank, N.A. (South) as Agents for the Banks party thereto (the "New Bank
Credit Agreement").
1. Representations and Warranties. The Company represents and
warrants to the Initial Purchasers as set forth below in Section 1 of this
Purchase Agreement (the "Agreement").
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a 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. The Final
Memorandum, at the date hereof, does not, and at the Closing Date (as
defined below) will not (or, if amended or supplemented, the Final
Memorandum as amended or supplemented at the date of any such amendment or
supplement and at the Closing Date, will not), contain any untrue
statement of a 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; provided, however, that the Company
makes no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Initial Purchasers through the Representatives specifically for inclusion
therein.
(b) Neither the Company nor any Affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act ("Regulation D")) of the Company
or any person acting on its or their behalf (other than the Initial
Purchasers, as to which no representation is made) has, directly or
indirectly, made offers or sales of any security, or solicited offers to
buy any security, under circumstances that would require the registration
of the Notes under the Securities Act.
(c) Neither the Company nor any Affiliate of the Company, or any
person acting on its or their behalf (other than the Initial Purchasers,
as to which no representation is made) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D)
in
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connection with any offer or sale of the Notes in the United States.
(d) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(e) Neither the Company nor any Affiliate, nor any person acting on
its or their behalf (other than the Initial Purchasers or their respective
Affiliates, as to whom the Company makes no representation) has engaged or
will engage in any directed selling efforts within the meaning of
Regulation S under the Securities Act ("Regulation S") and each of the
Company, its Affiliates and any person acting on its or their behalf
(other than the Initial Purchasers or their respective Affiliates) has
complied with and will comply with the offering restrictions requirement
of Regulation S.
(f) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number
of holders of the securities of the Company, as the case may be. In
respect of each taxable year during which any Note is outstanding, neither
the Company nor any subsidiary of the Company is or will be a personal
holding company, as defined in Section 542 of the Internal Revenue Code of
1986, as amended (the "Code"), at any time during which any Note is
outstanding. In respect of the taxable year ending January 25, 1997,
neither the Company nor any subsidiary of the Company will have
undistributed personal holding company income, as defined in Section 545
of the Code. For the purposes of the Puerto Rico Income Tax Act of 1954,
as amended, neither PXC&M Holdings, Inc. nor the Company is or will be
engaged in trade or business in Puerto Rico at any time during which any
Note is outstanding.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(h) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(i) The consolidated financial statements (including the notes
thereto) and schedules of the Company and its consolidated subsidiaries
set forth in the Final Memorandum fairly present in all material respects
the financial position
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of the Company and its consolidated subsidiaries, and the results of
operations as of the dates and for the periods specified therein; since
the date of the latest of such financial statements, there has been no
change nor any development or event involving a prospective change which
has had a material adverse effect on (i) the business, operations,
properties, assets, liabilities, net worth, condition (financial or
otherwise) or prospects of the Company and its consolidated subsidiaries,
taken as a whole, as the case may be, or (ii) the ability of the Company
to perform any of its obligations under this Agreement, the Registration
Rights Agreement, the Indenture or the Notes (a "Material Adverse
Effect"); such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise expressly
noted in the Final Memorandum); and the summary and selected historical
financial information included in the Final Memorandum has been derived
from the financial statements of the Company and fairly presents, on the
basis stated in the Final Memorandum, the information included therein.
(j) Subsequent to the respective dates as of which information is
given in the Final Memorandum, (i) the Company and the subsidiaries of the
Company have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary
course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (iii) there
has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and the subsidiaries of the Company, except
in each case as described in or contemplated by the Final Memorandum.
(k) Each of the Company and the subsidiaries of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of Delaware or, in the case of each subsidiary of
the Company, the jurisdiction in which it is chartered or organized, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business, except in such jurisdictions in which the failure to so
qualify, singly or in the aggregate, would not have a Material Adverse
Effect.
(l) Each of the Company and the subsidiaries of the Company has full
power (corporate and other) to own or lease its properties and conduct its
business as described in the
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Final Memorandum; and the Company has full power (corporate and other) to
enter into this Agreement, the Registration Rights Agreement, the
Indenture and the New Bank Credit Agreement and to carry out all the terms
and provisions hereof and thereof to be carried out by it.
(m) The Company has the authorized, issued and outstanding
capitalization as set forth in the Final Memorandum under the caption
"Capitalization." All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable.
(n) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors' qualifying shares and except
as otherwise set forth in the Final Memorandum are owned of record and
beneficially by the Company, either directly or through wholly owned
subsidiaries, free and clear of any pledge, lien, encumbrance, security
interest, restriction on voting or transfer, preemptive rights or other
defect or claim of any third party. No subsidiary of the Company is
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary's
property or assets to the Company or any other subsidiary of the Company,
except as described in or contemplated by the Final Memorandum.
(o) Neither the Company nor any of the subsidiaries of the Company
is in violation of its or any of their charter documents. No default
exists, and no event has occurred which, with notice or lapse of time or
both, would constitute a default in the due performance and observation of
any term, covenant or condition of any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of the
subsidiaries of the Company is a party, or by which the Company or any of
the subsidiaries of the Company or any of their respective properties is
bound, which would have a Material Adverse Effect.
(p) The issuance, offering and sale of the Notes to the Initial
Purchasers by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the provisions
of the Registration Rights Agreement, the Indenture, the Notes and the New
Bank Credit Agreement, the consummation of the other
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transactions herein and therein contemplated and the consummation of the
other transactions contemplated hereby and in the Final Memorandum do not
(i) require the consent, approval, authorization, order, registration or
qualification of or with any governmental authority or court, except such
as may be required under state securities or blue sky laws or except as
may be contemplated by the Registration Rights Agreement or (ii) conflict
with, result in a breach or violation of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any material contract, loan agreement, note, indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of the subsidiaries of the Company is a party, or by
which the Company or any of the subsidiaries of the Company or any of
their respective properties is bound, or the charter or by-laws of the
Company or any of the subsidiaries of the Company, or any statute, rule or
regulation or any judgment, order or decree of any governmental authority
or court or arbitrator applicable to the Company or any of the
subsidiaries of the Company, except as rights to indemnity and
contribution may be limited by federal or state securities laws or public
policy.
(q) The Company and the subsidiaries of the Company possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities or bodies necessary to
conduct their respective businesses, and neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(r) No legal or governmental proceedings or investigations are
pending to which the Company or any of the subsidiaries of the Company is
a party or to which the property of the Company or any of the subsidiaries
of the Company is subject that are not described in the Final Memorandum,
and no such proceedings or investigations, to the best knowledge of the
Company, have been threatened against the Company or any of the
subsidiaries of the Company, or with respect to any of their respective
properties, except in each case for such proceedings or investigations
that, singly or in the aggregate, are not reasonably likely to result in a
Material Adverse Effect.
(s) The Company and each of the subsidiaries of the Company have
valid title in fee simple to all items of real property and title to all
personal property owned by each of
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them, in each case free and clear of any pledge, lien, encumbrance,
security interest or other defect or claim of any third party, except (i)
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary to an extent that such
interference would have a Material Adverse Effect, and (ii) as otherwise
set forth in the Final Memorandum. Any real property and buildings held
under lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary.
(t) This Agreement has been duly authorized, executed and delivered
by the Company.
(u) The Registration Rights Agreement, the Indenture and the New
Bank Credit Agreement have been duly authorized by all necessary corporate
actions of the Company and, when duly executed and delivered by the
Company and the other parties thereto, will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the same may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally, including without limitation
the effect of statutory or other laws regarding fraudulent conveyances or
transfers or preferential transfers, or (ii) general principles of equity,
whether considered at law or at equity, and except as rights to indemnity
and contribution in the Registration Rights Agreement may be limited by
federal or state securities laws or public policy.
(v) The Notes have been duly authorized by all necessary corporate
action for issuance and sale pursuant to this Agreement and, when
executed, authenticated, issued and delivered in the manner provided for
in the Indenture and sold and paid for as provided in this Agreement, the
Notes will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as the same may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers or preferential transfers or (ii) general
principles of equity, whether considered at law or at equity.
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(w) Deloitte & Touche LLP, who have audited certain financial
statements of the Company and its consolidated subsidiaries and delivered
their reports with respect to the audited consolidated financial
statements and schedules in the Final Memorandum, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder.
(x) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(y) Neither the Company nor any of the subsidiaries of the Company
is now or, after giving effect to the issuance of the Notes and the
consummation of the transactions contemplated by the Final Memorandum will
be (i) insolvent, (ii) left with unreasonably small capital with which to
engage in its anticipated businesses or (iii) incurring debts beyond its
ability to pay such debts as they become due.
(z) The Company and the subsidiaries of the Company own or otherwise
possess the right to use all patents, trademarks, service marks, trade
names and copyrights, all applications and registrations for each of the
foregoing, and all other proprietary rights and confidential information
used in the conduct of their respective businesses as currently conducted;
and neither the Company nor any subsidiary of the Company has received any
notice, or is otherwise aware, of any infringement of or conflict with the
rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(aa) The Company and the subsidiaries of the Company are insured by
insurers of recognized financial responsibility (or by appropriate
self-insurance) against such losses and risks and in such amounts as are
prudent and customary in the businesses and in the locations in or at
which they are engaged; and neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew its
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existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(bb) No labor dispute with the employees of the Company, or any of
the subsidiaries of the Company, exists or to the knowledge of the Company
is threatened or imminent which is likely to result in a Material Adverse
Effect.
(cc) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed, except insofar as the failure to
file such returns, singly or in the aggregate, would not have a Material
Adverse Effect, or has requested extensions thereof and in each case has
paid all material taxes required to be paid by it and any other material
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, other than those being contested in good
faith and for which adequate reserves have been provided or those
currently payable without penalty or interest.
(dd) Neither of the Company nor any Affiliate of the Company has
taken, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to cause or
result in, stabilization or manipulation (as such terms are defined under
the Exchange Act) of the price of any security of the Company to
facilitate the sale or resale of the Notes.
(ee) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a Material Adverse Effect.
(ff) The Company shall conduct its business and affairs such that
amounts payable by it on the Notes will be free of any and all taxes,
including, without limitation, withholding taxes, due under the laws of
Puerto Rico or any subdivision or
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locality thereof ("Puerto Rican Taxes") as in effect on the Closing Date.
(gg) Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or its counsel shall be deemed to be a
representation and warranty by the Company to the Initial Purchasers as to
the matters covered thereby.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company at a purchase price of
90.25% of the principal amount thereof, plus accrued interest, if any, from
April 29, 1997 to the Closing Date, the principal amount of Notes set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Notes shall
be made at 9:00 a.m. New York City time, on April 29, 1997, or such later date
(not later than May 6, 1997) as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company (such date and time of delivery and payment for the Notes being herein
called the "Closing Date"). Delivery of the Notes shall be made to the
Representatives for the respective accounts of the Initial Purchasers against
payment by the Initial Purchasers through the Representatives of the purchase
price thereof to or upon the order of the Company in immediately available funds
or such other manner of payment as may be agreed by the Company and the
Representatives. Delivery of the Notes shall be made at such location as the
Representatives shall reasonably designate at least one business day in advance
of the Closing Date and payment for the Notes shall be made at the offices of
Shearman & Sterling ("Counsel for the Initial Purchasers"), 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, with any transfer taxes payable in connection with
the transfer of the Notes fully paid, against payment of the purchase price
therefor. Certificates for the Notes shall be registered in such names and in
such denominations as the Representatives may request not less than two full
business days in advance of the Closing Date.
The Company agrees to have the Notes available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 p.m. on the business day prior to the Closing Date.
4. Offering of Notes. Each Initial Purchaser severally and not
jointly, represents and warrants to and agrees, with the
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Company that:
(a) It has not offered or sold, and will not offer or sell, any
Notes except to those it reasonably believes to be (i) "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Notes is aware that
such sale is being made in reliance on Rule 144A, or (ii) other
institutional "accredited investors" (as defined in Rule 501(a) (1), (2),
(3) or (7) of Regulation D) that, prior to their purchase of the Notes,
deliver to such Initial Purchaser a letter containing the representations
and agreements set forth in the form of Annex A to the Final Memorandum or
(iii) non-U.S. persons outside the United States to whom it reasonably
believes offers and sales of the Notes may be made in reliance upon
Regulation S in transactions meeting the requirements of Regulation S.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Notes in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States.
(c) With respect to Notes sold in reliance on Regulation S, the
Initial Purchasers have not offered or sold, and will not offer or sell,
any Notes by means of any directed selling efforts (as defined in Rule 902
of Regulation S) in the United States.
(d) Other than as may be required pursuant to Section 5(d) hereof,
(i) the Company is not obligated to take any action that would permit the
offer or sale of the Notes or the distribution of any offering memorandum
or any other offering material relating to the Notes in any jurisdiction
where action for that purpose is required and (ii) the Company will have
no responsibility with respect to the right of any person to offer or sell
Notes or to distribute any offering memorandum or any other offering
material relating to the Notes in any jurisdiction. Therefore, except as
may be required pursuant to Section 5(d) hereof, each Initial Purchaser
will obtain any consent, approval or authorization required for it to
offer or sell Notes, or to distribute any offering memorandum or any other
offering material relating to the Notes, under the laws or regulations of
any jurisdiction where it proposes to make offers or sales of Notes, or to
distribute any offering memorandum or any other offering material relating
to the Notes.
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(e) (i) It has not offered or sold and prior to the date six months
after the Closing Date will not offer or sell any Notes to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied, and will comply, with all
applicable provisions of the Financial Services Act of 1986 of Great
Britain with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom, and (iii) it has only
issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of the Notes
to a person who is of a kind described in Article 11(3) of the Financial
Services Act of 1986 (Investment Advertisements) (Exemptions) (No. 2)
Order 1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
Counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final Memorandum
and any amendments and supplements thereto as it may reasonably request.
The Company will pay the expenses of printing of all documents relating to
the Offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the Representatives (which consent
shall not be unreasonably withheld).
(c) If at any time prior to the completion of the sale of the Notes
by the Initial Purchasers, any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a 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, or if it should be necessary to
amend or supplement the Final Memorandum to comply with applicable law,
the Company will promptly notify the Representatives of the same and,
subject to the requirements of paragraph (b) of this Section 5, will
prepare and provide to the Representatives pursuant to paragraph (a) of
this Section 5 an amendment or supplement which will
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correct such statement or omission or effect such compliance.
(d) The Company will arrange for the qualification of the Notes for
sale by the Initial Purchasers under the laws of such jurisdictions as the
Initial Purchasers may reasonably designate and will maintain such
qualifications in effect as long as required for the sale of the Notes;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent
to service of process in any jurisdiction in which it is not now so
subject or to subject itself to taxation in any such jurisdiction. The
Company will promptly advise the Representatives of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
(e) Whenever the Company publishes or makes available to the public
(by filing with any regulatory authority or securities exchange or by
publishing a press release or otherwise) any information that could
reasonably be expected to be material in the context of the offer and sale
of Notes under this Agreement, the same shall immediately notify the
Initial Purchasers as to the nature of such information or event. Until
the third anniversary of the Closing Date, the Company will notify the
Initial Purchasers of (i) any decrease in the rating of the Notes or any
other debt securities of the Company by any nationally recognized
statistical rating organization (as defined in Rule 436(g) under the
Securities Act) or (ii) any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating
which does not indicate the direction of the possible change, as soon as
the Company becomes aware of any such decrease or notice. For a period of
three years after the Closing Time, the Company will also deliver to the
Initial Purchasers, as soon as available and to the extent individually
prepared, and without request, copies of its latest annual report and
quarterly statement and any reports of its auditors thereon.
(f) The Company will not, and will not permit any of its Affiliates
to, resell any Notes that have been acquired by any of them.
(g) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf other than the Initial Purchasers, as to
which no agreement is made, will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances
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that would require the registration of the Notes under the Securities Act.
(h) Neither the Company nor any of its Affiliates, nor any person
acting its or on their behalf other than the Initial Purchaser, as to
which no agreement is made, will engage, in connection with the offering
of the Notes, (i) in any form of general solicitation or general
advertising (within the meaning of Regulation D), (ii) in any public
offering within the meaning of Section 4(2) of the Securities Act or (iii)
in any directed selling efforts (as defined in Rule 902 under the
Securities Act and the Securities and Exchange Commission's Release No.
33-6863) and each of them will comply with the offering restrictions
requirement of Regulation S in the United States in connection with the
Notes proposed to be offered and sold pursuant to Regulation S by the
Initial Purchasers in connection with any offer or sale of the Notes.
(i) So long as any of the Notes are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Company will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such
holder or prospective purchaser, any information required to be provided
by Rule 144A(d)(4) under the Securities Act.
(j) The Company will cooperate with the Representatives and use its
best efforts to (i) permit the Notes to be eligible for clearance and
settlement through The Depository Trust Company and (ii) permit the Notes
to be designated PORTAL-eligible securities in accordance with the rules
and regulations of the National Association of Securities Dealers, Inc.
(the "NASD").
(k) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Notes).
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Notes shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Company contained herein at the date and time that this
Agreement is
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executed and delivered by the parties hereto (the "Execution Time"), and the
Closing Date, to the accuracy in all material respects of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have entered into a Registration Rights
Agreement with the Representatives in the form attached hereto as Exhibit
A.
(b) The Company shall have furnished to the Representatives the
opinion of Milbank, Tweed, Xxxxxx & XxXxxx, counsel for the Company, dated
the Closing Date, substantially to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except in
such jurisdictions in which the failure to so qualify, singly or in
the aggregate, would not have a Material Adverse Effect;
(ii) Each of the subsidiaries of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except in
such jurisdictions in which the failure to so qualify, singly or in
the aggregate, would not have a Material Adverse Effect;
(iii) the Company has the authorized, issued and outstanding
capitalization as set forth in the Final Memorandum under the
caption "Capitalization." All of the issued shares of capital stock
of the Company have been duly authorized and validly issued and are
fully paid and nonassessable;
(iv) the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and, except for directors'
qualifying shares and except as
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otherwise set forth in the Final Memorandum are owned of record and
beneficially by the Company, either directly or through wholly owned
subsidiaries, free and clear of any pledge, lien, encumbrance,
security interest, restriction on voting or transfer, preemptive
rights or other defect or claim of any third party;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) each of the Registration Rights Agreement, the Indenture
and the New Bank Credit Agreement have been duly authorized,
executed and delivered by the Company and constitutes a legal, valid
and binding obligations of the Company, enforceable against the
Company in accordance with its terms, except as the same may be
limited by (A) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally,
including without limitation the effect of statutory or other laws
regarding fraudulent conveyances or transfers or preferential
transfer, or (B) general principles of equity, whether considered at
law or at equity, and except as rights to indemnity and contribution
in the Registration Rights Agreement may be limited by federal or
state securities law or public policy;
(vii) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers pursuant to
this Agreement, will constitute legal, valid and binding obligations
of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms,
except as may be limited by (A) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally, including without limitation the effect of statutory or
other laws regarding fraudulent conveyances or transfers or
preferential transfers or (B) general principles of equity, whether
considered at law or at equity;
(viii) the statements set forth under the headings
"Description of Notes," "Description of New Bank Credit Agreement"
and the "Plan of Distribution" and "Taxation" in the Final
Memorandum, insofar as such statements constitute summaries of the
legal matters, documents and proceedings referred to therein, fairly
summarize the matters referred to therein;
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(ix) the issuance, offering and sale of the Notes to the
Initial Purchasers by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this
Agreement and the provisions of the Registration Rights Agreement,
the Indenture, the Notes and the New Bank Credit Agreement do not
(A) require the consent, approval, authorization, order,
registration or qualification of or with any governmental authority
or court, except such as may be required under state securities or
blue sky laws or (B) conflict with, result in a breach or violation
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the
charter or by-laws of the Company or any of the subsidiaries of the
Company, or, to the best knowledge of such counsel, any material
contract, loan agreement, note, indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any
of the subsidiaries of the Company is a party or by which the
Company or any of the subsidiaries of the Company, or any of their
respective properties is bound, or any statute, rule or regulation
or, to the best knowledge of such counsel, any judgment, order or
decree of any governmental authority or court or arbitrator
applicable to the Company or any of the subsidiaries of the Company;
(x) assuming the accuracy of the representations and
warranties of the Initial Purchasers and compliance by it with its
agreements contained herein, no registration of the Notes under the
Securities Act is required, and no qualification of the Indenture
under the Trust Indenture Act of 1939 is necessary, for the offer
and sale by the Initial Purchasers of the Notes in the manner
contemplated by this Agreement; and
(xi) the Company is not an "investment company" within the
meaning of the Investment Company Act without taking account of any
exemption arising out of the number of holders of securities of the
Company.
Such counsel shall also state that they have no reason to believe
that at the Execution Time the Final Memorandum contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that the Final Memorandum as
the same may be amended or supplemented includes an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements
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therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York, the State of Delaware or the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to Counsel for the Initial Purchasers and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
All references in this Section 6(b) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Initial Purchasers shall have received from Shearman &
Sterling, Counsel for the Initial Purchasers such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the Notes
and other related matters as the Initial Purchasers may reasonably
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters;
(d) (i) the representations and warranties of the Company in this
Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date, and
the Company shall have complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(ii) since the date of the most recent financial statements included
in the Final Memorandum, there shall have been no change nor any
development or event involving a prospective change constituting a
Material Adverse Effect; and
(iii) the Company shall have furnished to the Initial Purchasers a
certificate of the Company, as the case may be, signed by the chief
executive officer and the principal financial or accounting officer of the
Company dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment or
supplement to the Final Memorandum and this Agreement and to the effect
set forth in clauses (i) and (ii) above.
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(e) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Initial Purchasers a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Initial Purchasers, confirming that
they are independent accountants within the meaning of the Securities Act
and the Exchange Act and the applicable rules and regulations thereunder
and Rule 101 of the Code of Professional Conduct of the American Institute
of Certified Public Accountants (the "AICPA") and substantially to the
effect that:
(i) in their opinion the audited financial statements included
in the Final Memorandum and reported on by them comply in form in
all material respects with the applicable accounting requirements of
the Exchange Act and the related published rules and regulations
thereunder; and
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with the standards
established by the AICPA of the unaudited interim financial
information; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the stockholders,
directors and audit and compensation committees of the Company and
the subsidiaries; and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to January 25, 1997, nothing came to their attention
which caused them to believe that with respect to the period
subsequent to January 25, 1997, there were at a specified date not
more than four business days prior to the date of the letter, any
change in the capital stock, increase in the long-term debt or
decrease in stockholder's equity, in each case, of the Company and
its subsidiaries as compared with the amounts shown on the January
25, 1997 consolidated balance sheet included in the Final
Memorandum, or for the period from January 25, 1997 to such
specified date there were, as compared with the corresponding period
in the preceding year, any decrease in net sales or any increase in
net loss of the Company and its subsidiaries, except in all
instances for changes, decreases or increases set forth in such
letter, in which case the letter shall be
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accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the
Initial Purchasers; and
(iii) on the basis of a reading of the unaudited pro forma
financial information (the "pro forma financial information")
included in the Final Memorandum; carrying out certain specified
procedures; inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma financial information,
nothing came to their attention which caused them to believe that
the pro forma financial information do not comply in form in all
material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such information; and
(iv) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and the subsidiaries of
the Company) set forth in the Final Memorandum, including without
limitation the information set forth under the captions "Offering
Memorandum Summary," "Risk Factors," "Use of Proceeds,"
"Capitalization," "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," "Business," "Description of New Bank Credit Agreement"
and "Description of Notes" in the Final Memorandum, agrees with the
accounting records of the Company and the subsidiaries of the
Company excluding any questions of legal interpretation.
All references in this Section 6(e) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the date of the
letter.
(f) The Notes shall have been designated PORTAL-eligible securities
in accordance with the rules and regulations of the
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NASD.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters
referred to in paragraph (e) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and the subsidiaries of the Company the
effect of which, in any case referred to in clause (i) or (ii) above, in
the judgment of the Initial Purchasers is so material and adverse as to
make impractical or inadvisable the marketing of the Notes as contemplated
by the Final Memorandum.
(h) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(i) The Company and Pueblo International, Inc. shall have entered
into the New Bank Credit Agreement providing for a revolving credit
facility of no less than $65 million.
(j) Prior to the Closing Date, the Company shall have furnished to
the Initial Purchasers such further information, certificates and
documents as the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and Counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at the Closing Date by the Initial Purchasers. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
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7. Payment of Expenses. The Company shall, whether or not the
transactions contemplated by this Agreement are consummated, pay all expenses
incident to the performance of its obligations under this Agreement, including
the fees and disbursements of its accountants and counsel, the cost of printing
and delivery of the Preliminary Memorandum, the Final Memorandum, all amendments
thereof and supplements thereto, this Agreement and all other documents relating
to the offering, the cost of preparing, printing, packaging and delivering the
Notes, the fees and disbursements, including fees of counsel, incurred in
compliance with Section 5(d), the fees and disbursements of the Trustee, the
fees of any agency that rates the Notes and the fees and expenses incurred in
connection with the admission of the Notes for trading in the PORTAL system. If
the sale of the Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 6
hereof is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of default by any of the Initial Purchasers in
payment for the Notes on the Closing Date, the Company will reimburse the
Initial Purchasers severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the Notes.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the 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, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
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alleged untrue statement or omission or alleged omission (i) made in the
Preliminary Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Initial Purchasers specifically
for inclusion therein or (ii) made in the Preliminary Memorandum if a copy of
the Final Memorandum was not delivered by or on behalf of the Initial Purchasers
to the person asserting any claim against the Initial Purchasers and the untrue
statement contained in or omission from such Preliminary Memorandum was
corrected in the Final Memorandum. This indemnity agreement will be in addition
to any liability which the Company or the Guarantors may otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expense of any separate counsel
retained by the indemnified party or
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parties except as set forth below); provided, however, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by NationsBanc
Capital Markets, Inc. in the case of parties indemnified pursuant to paragraph
(a) above and by the Company in the case of parties indemnified pursuant to
paragraph (b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent (not to be
unreasonably withheld), but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the third
and fourth sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 20 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least five days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with
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respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial Purchasers from the offering of the Notes; provided, however, that
in no case shall any Initial Purchaser (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of the Notes) be
responsible for any amount in excess of the amount by which the total price at
which the Notes resold by it in the initial placement of such Notes were offered
to investors exceeds the amount of any Losses that such Initial Purchaser has
otherwise been required to pay. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Initial
Purchasers shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and of
the Initial Purchasers in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Notes hereunder. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take into account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
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person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Securities Act or the Exchange Act and each director, officer,
employee and agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls the Company
within the meaning of either the Securities Act or Exchange Act and each officer
and director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Notes set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Notes set forth opposite the names of all the remaining
Initial Purchasers) the Notes which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Notes set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Notes, and if such
non-defaulting Initial Purchasers do not purchase all the Notes, this Agreement
will terminate without liability to any non-defaulting Initial Purchaser or the
Company. In the event of a default by any Initial Purchaser as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any non-defaulting
Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Notes, if prior to such time (i)
trading in securities generally on the New York Stock Exchange or the Nasdaq
Stock Exchange shall have been suspended or limited or minimum prices shall have
been established on any such exchanges, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak
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or escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Notes as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Notes. The provisions
of Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telecopied and confirmed to them, care of NationsBanc Capital
Markets, Inc., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: J. Xxxxx Xxxxxx or, if sent to the Company, will be mailed, delivered
or telecopied and confirmed to the Company at 0000 X.X. 00xx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxxx 00000, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day"
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day an
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
28
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the Initial Purchasers.
Very truly yours,
PUEBLO XTRA INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxx, III
---------------------------
Name: Xxxxxxx X. Xxxx, III
Title: President and Chief
Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Xxxxx X. Xxxx, Xx.
------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Managing Director
SCOTIA CAPITAL MARKETS (USA), INC.
By: /s/ Xxxxx Xxxxx
------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
29
SCHEDULE I
INITIAL PURCHASERS
Principal Amount
of Notes to Be Purchased
Initial Purchasers ------------------------
------------------
NationsBanc Capital Markets, Inc............. $42,500,000
Scotia Capital Markets (USA), Inc............ $42,500,000
-----------
Total...................... $85,000,000
