EXHIBIT 4.3
FEDERAL DATA CORPORATION
$105,000,000
10 1/8% SENIOR SUBORDINATED NOTES DUE 2005
PURCHASE AGREEMENT
July 18, 1997
BT SECURITIES CORPORATION
XXXXXX BROTHERS INC.
c/o BT Securities Corporation
Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Federal Data Corporation, a Delaware corporation (the "COMPANY"), and
each subsidiary of the Company listed on the signature page hereto (the
"GUARANTORS" and, together with the Company, the "ISSUERS") each hereby confirms
its agreement with you (the "INITIAL PURCHASERS"), as set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$105,000,000 aggregate principal amount of its 10 1/8% Senior Subordinated Notes
due 2005 (the "NOTES"). The Notes will be guaranteed (the "GUARANTEES" and,
together with the Notes, the "SECURITIES") by each Guarantor on a senior
subordinated basis. The Securities are to be issued under an indenture (the
"INDENTURE") to be dated as of July 15, 1997 among the Company, the Guarantors
and Norwest Bank, Minnesota, N.A., as Trustee (the "TRUSTEE").
Shortly after the issuance and sale of the Securities, the Company
will terminate its existing senior credit facility and execute a new senior
secured revolving credit facility (together with all documents executed in
connection therewith, the "CREDIT AGREEMENT") among the Company, its
subsidiaries, Bankers Trust Company, as agent, and certain financial
institutions party thereto which will provide revolving borrowing availability
of up to $75.0 million, subject to a borrowing base.
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The Securities will be offered and sold to the Initial Purchasers
without such offers and sales being registered under the Securities Act of 1933,
as amended (the "ACT"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum dated July 2, 1997 (the "PRELIMINARY
MEMORANDUM"), and a final offering memorandum dated July 18, 1997 (the "FINAL
MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "MEMORANDUM") setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Company and its subsidiaries and any material developments
relating to the Company and its subsidiaries occurring after the date of the
most recent historical financial statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which each of the Issuers has
agreed, among other things, to file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the exchange of the Securities for the Exchange Securities (as
defined in the Registration Rights Agreement) or, in certain circumstances, the
resale of the Securities under the Act.
This Agreement, the Securities, the Indenture and the Registration
Rights Agreement are herein collectively referred to as the "OFFERING
DOCUMENTS."
The issuance of the Securities and the consummation of the other
transactions contemplated hereby are herein collectively referred to as the
"TRANSACTIONS."
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. Each of the
Issuers, jointly and severally, represents and warrants to and agrees with each
of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in
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the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
2(a) do not apply to statements or omissions made in reliance upon and in
conformity with information relating to either of the Initial Purchasers
furnished to the Issuers in writing by the Initial Purchasers expressly for
use in the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum;
all of the subsidiaries of the Company, including the Guarantors, are
listed in Schedule 2 attached hereto (each, a "SUBSIDIARY" and,
collectively, the "SUBSIDIARIES"); all of the outstanding shares of capital
stock of the Company and the Subsidiaries have been, and as of the Closing
Date will be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights; the Company owns, directly or indirectly, all of the outstanding
shares of capital stock of each of the Subsidiaries; except as described in
the Final Memorandum, with the exception of any director's qualifying
shares, all of the outstanding shares of capital stock of the Company and
of each of the Subsidiaries will be free and clear of all liens,
encumbrances, equities and claims or restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting; except as set forth in the Final
Memorandum, there are no (i) options, warrants or other rights to purchase,
(ii) agreements or other obligations to issue or (iii) other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in the Company or any of the
Subsidiaries. Except for the Subsidiaries with respect to the Company and
any Subsidiary owning another Subsidiary or as disclosed in the Final
Memorandum, neither the Company nor the Subsidiaries own, directly or
indirectly, any shares of capital stock or any other equity or long-term
debt securities or have any equity interest in any firm, partnership, joint
venture or other entity.
(c) Each of the Company and the Subsidiaries has been duly
incorporated, and (except for VAD International, Inc.) each of the Company
and the Subsidiaries is validly existing and in good standing under the
laws of its juris-
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diction of incorporation, with all requisite corporate power and authority
to own its properties and conduct its business as now conducted as
described in the Final Memorandum; each of the Company and the Subsidiaries
is duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where
the failure to be so qualified would not, individually or in the aggregate,
have a material adverse effect on the business, condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries,
taken as a whole (any such event, a "MATERIAL ADVERSE EFFECT").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, when issued, will be in the
form contemplated by the Indenture. The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by the
Company and, when executed by the Company and authenticated by the Trustee
in accordance with the provisions of the Indenture and, in the case of the
Notes, when delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will constitute valid and
legally binding obligations of the Company, be entitled to the benefits of
the Indenture, and be enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
(e) Each of the Guarantors has all requisite power and authority to
execute, deliver and perform each of its obligations under the Guarantees.
The Guarantees to be endorsed on the Notes, the Exchange Notes and the
Private Exchange Notes have been duly and validly authorized by each of the
Guarantors and, when duly executed by each of the Guarantors and when the
Notes, the Exchange Notes and the Private Exchange Notes are duly executed,
authenticated, issued and delivered as provided in the Indenture and the
Registration Rights Agreement and, in the case of the Notes, paid for as
provided herein, will constitute
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valid and legally binding obligations of each of the Guarantors entitled to
the benefits of the Indenture, enforceable against each of the Guarantors
in accordance with their terms except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(f) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture meets the requirements for qualification under
the Trust Indenture Act of 1939, as amended (the "TIA"). The Indenture has
been duly and validly authorized by each of the Issuers and, when executed
and delivered by each of the Issuers (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and legally
binding agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(g) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has been
duly and validly authorized by each of the Issuers and, when executed and
delivered by each of the Issuers, will constitute a valid and legally
binding agreement of each of the Issuers enforceable against each of the
Issuers in accordance with its terms, except that (A) the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations.
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(h) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Each of
the Issuers has duly and validly authorized this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by each of the Issuers.
(i) Except as disclosed in the Final Memorandum, no consent,
approval, authorization or order of any court or governmental agency or
body, or third party is required for the performance of any of the Offering
Documents by the Company or the Subsidiaries (to the extent each is a party
thereto) or the consummation by the Company or the Subsidiaries of the
other transactions contemplated hereby or thereby (assuming the accuracy of
the representations and warranties of the Initial Purchasers in Section 8
hereof), except such as have been obtained and such as may be required
under state securities or "Blue Sky" laws in connection with the purchase
and resale of the Securities by the Initial Purchasers. None of the
Company or the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective properties
or assets, except for any such breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect, or
(iii) in breach of or default under (nor has any event occurred which, with
notice or passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any of (x) the Offering
Documents or (y) any other indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which any of them is a party
or to which any of them or their respective properties or assets is subject
(collectively, "Contracts"), except in the case of clause (iii)(y) for any
such breach, default, violation or event which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(j) The execution, delivery and performance by the Company and the
Subsidiaries, to the extent each is a party thereto, of each of the
Offering Documents and the consummation by the Company and the Subsidiaries
of the
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transactions contemplated thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) will not
conflict with or constitute or result in a breach of or a default under (or
an event which with notice or passage of time or both would constitute a
default under) or violation of any of (i) the terms or provisions of
(x) any of the Offering Documents or (y) any Contract, except in the case
of clause (y) for any such conflict, breach, violation, default or event
which would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws (or similar
organizational document) of the Company or any of the Subsidiaries, or
(iii) (assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and warranties
of the Initial Purchasers in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except for
any such conflict, breach or violation which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(k) The audited consolidated financial statements of the Company
included in the Final Memorandum present fairly in all material respects
the financial position, results of operations and cash flows of the Company
and its consolidated subsidiaries 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, except as otherwise
stated therein. The audited consolidated financial statements of NYMA,
Inc. ("NYMA") included in the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of NYMA and its consolidated subsidiaries 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,
except as otherwise stated therein. The audited financial statements of
Xxxxxxx Management Systems Corporation ("Xxxxxxx") included in the Final
Memorandum present fairly in all material respects the financial position,
results of operations and cash flows of Xxxxxxx 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,
except as otherwise stated therein. The summary and selected financial and
statistical data in the Final Memo-
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randum present fairly in all material respects the information shown
therein and have been prepared and compiled on a basis consistent with the
audited financial statements included therein, except as otherwise stated
therein. Price Waterhouse LLP, which is reporting on the audited financial
statements of the Company and its consolidated subsidiaries included in the
Final Offering Memorandum, is an independent public accounting firm within
the meaning of the Act and the rules and regulations promulgated
thereunder. Deloitte & Touche LLP, which is reporting on the audited
financial statements of NYMA and its consolidated subsidiaries included in
the Final Offering Memorandum, is an independent public accounting firm
within the meaning of the Act and the rules and regulations promulgated
thereunder. Coopers & Xxxxxxx L.L.P. (together with Price Waterhouse LLP
and Deloitte & Touche LLP, the "INDEPENDENT ACCOUNTANTS"), which is
reporting on the audited financial statements of Xxxxxxx included in the
Final Offering Memorandum, is an independent public accounting firm within
the meaning of the Act and the rules and regulations promulgated
thereunder.
(l)The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (ii) have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, and (iii) have been properly
computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other pro forma financial
information included in the Final Memorandum are reasonable in all material
respects and the adjustments used therein are appropriate in all material
respects to give effect to the transactions or circumstances referred to
therein.
(m) Except as described in the Final Memorandum, there is not pending
or, to the knowledge of the Issuers, threatened any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property or assets of the Company
or any of the Subsidiaries are subject, before or brought by any court,
arbitrator or governmental agency or body which, if determined adversely to
the Company or any of the Subsidiaries, would reasonably be expected, indi-
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vidually or in the aggregate, to have a Material Adverse Effect or which
seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold hereunder or
the consummation of the other transactions described in the Final
Memorandum.
(n) The Company and the Subsidiaries each possess all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and have made all declarations and filings with (collectively,
"OBTAIN"), all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
presently required or necessary to own or lease, as the case may be, and to
operate their respective properties and to carry on their respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("PERMITS"), except as disclosed in the Final Memorandum and
except where the failure to obtain such Permits would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; the Company and the Subsidiaries have fulfilled and performed in
all material respects their respective obligations with respect to such
Permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit, except
where such revocation, termination or impairment would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; and the Company and the Subsidiaries have not received any notice
of any proceeding relating to revocation or modification of any such
Permit, except as disclosed in the Final Memorandum and except where such
revocation or modification would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
(o) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as disclosed in the Final Memorandum,
(i) neither the Company nor any of the Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into or agreed
to enter into any transactions or contracts (written or oral) not in the
ordinary course of business which liabilities, obligations, transactions or
contracts would, individually or in the aggregate, be material to the
business, condition (financial or otherwise) or results of operations of
the Company and the Subsidiaries,
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taken as a whole, (ii) none of the Company or the Subsidiaries has
purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock (other than with respect to any of such Subsidiaries, the purchase
of, or dividend or distribution on, capital stock owned by the Company) and
(iii) there shall not have been any change in the capital stock or long-
term indebtedness of the Company or the Subsidiaries.
(p) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, and
has paid all taxes shown as due thereon; and other than tax deficiencies
being contested in good faith and for which adequate reserves have been
provided, there is no tax deficiency that has been asserted against the
Company or any of the Subsidiaries that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(q) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries believe to be reliable and accurate in all material respects.
(r) None of the Company, the Subsidiaries or any agent acting on
their behalf has taken or will take any action that might cause the
execution of this Agreement or the sale of the Securities to violate
Regulation G, T (assuming that the Initial Purchasers do not sell
Securities to any person or entity subject to Regulation T for such
person's or entity's own account), U or X of the Board of Governors of the
Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
(s) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property
described in the Final Memorandum as being owned by it and good and
marketable title to a leasehold estate in the real and personal property
described in the Final Memorandum as being leased by it free and clear of
all liens, charges, encumbrances or restrictions, except for sales of
inventory in the ordinary course of business or as described in the Final
Memo-
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randum or to the extent the failure to have such title or the existence of
such liens, charges, encumbrances or restrictions would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect. All leases, contracts and agreements to which the Company or any
of the Subsidiaries is a party or by which any of them is bound are valid
and enforceable against the Company or such Subsidiary, and, to the
knowledge of the Company and its Subsidiaries, are valid and enforceable
against the other party or parties thereto and are in full force and effect
with only such exceptions as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, and except as
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now
or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought. The Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by them
as described in the Final Memorandum, except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect, and the Company and the Subsidiaries have not received any notice
of infringement of or conflict with (or know of any such infringement of or
conflict with) alleged rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if
such alleged infringement or conflict were sustained, would reasonably be
expected to have a Material Adverse Effect.
(t) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective
properties or assets that would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum, nor are
there any material contracts or other documents that would be required to
be described in a prospectus pursuant to the Act that are not described in
the Final Memorandum.
(u) Except as described in the Final Memorandum or as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (A) each of the Company and the Subsidiaries is in
compliance with and not subject to liability under applicable Environmental
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Laws (as defined below), (B) each of the Company and the Subsidiaries has
made all filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in full force
and effect, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or threatened
against the Company or any of the Subsidiaries under any Environmental Law,
(D) no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or any of the Subsidiaries,
(E) the Company and the Subsidiaries have not received notice that any of
them has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or any comparable state law, (F) no property
or facility of the Company or any of the Subsidiaries is (i) listed or
proposed for listing on the National Priorities List under CERCLA or
(ii) listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public health
and safety or the environment, including, without limitation, laws relating
to (i) emissions, discharges, releases or threatened releases of hazardous
materials into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii)
underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(v) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries, threatened.
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(w) Each of the Company and the Subsidiaries carries insurance
(including self-insurance) in such amounts and covering such risks as would
be obtained by companies in the same or similar businesses in the ordinary
course for the conduct of its business and the value of its properties.
(x) On the Closing Date, immediately after the consummation of the
transactions contemplated by the Offering Documents, the fair value and
present fair saleable value of the assets of each of the Company and the
Subsidiaries (each on a consolidated basis) will exceed the sum of their
stated liabilities and identified contingent liabilities; none of the
Company or the Subsidiaries (each on a consolidated basis) is, nor will the
Company and the Subsidiaries (each on a consolidated basis) after giving
effect to the execution, delivery and performance of the Offering Documents
and the consummation of the transactions contemplated thereby be, (i) left
with unreasonably small capital with which to carry on their respective
businesses as they are proposed to be conducted, (ii) unable to pay their
debts (contingent or otherwise) as they mature or (iii) otherwise
insolvent.
(y) Neither the Company nor any of the Subsidiaries has any liability
for any prohibited transaction or accumulated funding deficiency (within
the meaning of Section 412 of the Code) or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
makes or ever has made a contribution and in which any employee of the
Company or of any Subsidiary is or has ever been a participant. With
respect to such plans, the Company and each Subsidiary is in compliance in
all material respects with all applicable provisions of ERISA.
(z) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records in all material respects and (ii) maintains
internal accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's authorization,
(B) transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
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authorization and (D) the reported accounts for its assets are compared
with existing assets at reasonable intervals.
(aa) None of the Company or the Subsidiaries is, or upon consummation
of the transactions contemplated by the Offering Documents will be, an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder.
(bb) Upon issuance of the Securities, the Securities, the Exchange
Securities, the Indenture and the Registration Rights Agreement will
conform in all material respects to the descriptions thereof in the Final
Memorandum.
(cc) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration
statements required to be filed by the Issuers pursuant to the Registration
Rights Agreement other than as expressly permitted thereby.
(dd) None of the Company, the Subsidiaries, or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Act) has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Act) which is or could be integrated with the
sale of the Securities in a manner that would require the registration
under the Act of the Securities or (ii) assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof, engaged in any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) in connection with
the offering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Act. Assuming the accuracy of
the representations and warranties of the Initial Purchasers in Section 8
hereof, it is not necessary in connection with the offer, sale and delivery
of the Securities to the Initial Purchasers in the manner contemplated by
this Agreement to register any of the Securities under the Act or to
qualify the Indenture under the TIA.
(ee) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as the Securities and
listed on a national
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securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated inter-dealer quotation system.
(ff) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities.
(gg) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("Regulation S")) with
respect to the Securities; the Company, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers, acting
severally and not jointly, agree to purchase the Securities in the respective
amounts set forth on SCHEDULE 1 hereto at 97.0% of their principal amount. One
or more certificates in definitive form for the Securities that the Initial
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Initial Purchasers
request upon notice to the Issuers at least 36 hours prior to the Closing Date,
shall be delivered by or on behalf of the Issuers to the Initial Purchasers,
against payment by or on behalf of the Initial Purchasers of the purchase price
therefor by wire transfer (same day funds), net of the Initial Purchasers'
overnight cost of such funds, to such account or accounts as the Issuers shall
specify prior to the Closing Date, or by such means as the parties hereto shall
agree prior to the Closing Date. Such delivery of and payment for the Se-
-16-
curities shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M., New York time, on July 25, 1997, or at
such other place, time or date as the Initial Purchasers, on the one hand, and
the Issuers, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as the "CLOSING DATE." The Issuers
will make such certificate or certificates for the Securities available for
checking and packaging by the Initial Purchasers at the offices of BT Securities
Corporation in New York, New York, or at such other place as BT Securities
Corporation may designate, at least 24 hours prior to the Closing Date.
4. OFFERING BY THE INITIAL PURCHASERS. The Initial Purchasers
propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of the Initial Purchasers is advisable.
5. COVENANTS OF THE ISSUERS. Each of the Issuers, jointly and
severally, covenants and agrees with each of the Initial Purchasers that:
(a) The Issuers will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchasers shall not have given their consent (which
consent shall not be unreasonably withheld). The Issuers will promptly,
upon the reasonable request of the Initial Purchasers or counsel for the
Initial Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary in connection with
the resale of the Securities by the Initial Purchasers for such Memorandum
not to contain any untrue statement of a material fact or omission of a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or to comply with
applicable laws, rules or regulations.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of which jurisdictions as the
Initial Purchasers may designate and will continue such qualifications in
effect for as long as may be necessary to complete the re-
-17-
sale of the Securities; PROVIDED, HOWEVER, that in connection therewith,
none of the Issuers shall be required to qualify as a foreign corporation
or to execute a general consent to service of process in any jurisdiction
or subject itself to taxation in excess of a nominal dollar amount in any
such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or the Private Exchange
Securities, any event occurs or information becomes known 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 a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Final Memorandum to
comply with applicable law, the Issuers will promptly notify the Initial
Purchasers thereof and will prepare, at their expense, an amendment or
supplement to the Final Memorandum that corrects such statement or omission
or effects such compliance.
(d) The Issuers will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Issuers will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Securities remain outstanding, the
Issuers will furnish to the Initial Purchasers copies of all reports and
other communications (financial or otherwise) furnished by the Company to
the Trustee or to the holders of the Securities and, as soon as available,
copies of any reports or financial statements furnished to or filed by the
Company with the Commission or any national securities exchange on which
any class of securities of the Company may be listed.
(g) Prior to the Closing Date, the Issuers will furnish to the
Initial Purchasers, as soon as they have been prepared, a copy of any
unaudited interim financial statements of the Company for any period
subsequent to the pe-
-18-
riod covered by the most recent financial statements appearing in the Final
Memorandum.
(h) Neither the Issuers nor any of their respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be integrated
with the sale of the Securities in a manner which would require the
registration under the Act of the Securities.
(i) The Issuers will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) in connection with the
offering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding, the
Issuers will make available at their expense, upon request, to any holder
of such Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(k) The Issuers will use their best efforts to (i) permit the
Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"PORTAL MARKET") and (ii) permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Securities not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of
definitive securities.
(m) None of the Company or the Subsidiaries will take any action
prohibited by Regulation M under the Exchange Act (or any successor
provision), in connection with the distribution of the Securities
contemplated hereby.
-19-
6. EXPENSES. Each of the Issuers, jointly and severally, agrees to
pay all costs and expenses incident to the performance of the obligations of the
Issuers under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11
hereof, including all costs and expenses incident to (i) the printing, word
processing or other production of documents with respect to the transactions
contemplated hereby, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Issuers, (iv) preparation (including printing), issuance and
delivery to the Initial Purchasers of the Securities, (v) the qualification of
the Securities under state securities and "Blue Sky" laws, including filing fees
and fees (not to exceed $10,000) and disbursements of counsel for the Initial
Purchasers relating thereto, (vi) expenses in connection with any meetings with
prospective investors in the Securities, (vii) fees and expenses of the Trustee
including fees and expenses of counsel to the extent required by the Company's
arrangements with the Trustee, (viii) all expenses and listing fees incurred in
connection with the application for quotation of the Securities on the PORTAL
Market and (ix) any fees charged by investment rating agencies for the rating of
the Securities. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Issuers to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchasers of their obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith), the Issuers agree to
promptly reimburse the Initial Purchasers upon demand for all out-of-pocket
expenses (including fees, disbursements and charges of Xxxxxx Xxxxxx & Xxxxxxx,
counsel for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities.
7. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The
obligation of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be
-20-
subject to the satisfaction or waiver of the following conditions on or prior to
the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxx & Xxxxxxx, counsel for the Issuers, in form and
substance reasonably satisfactory to counsel for the Initial Purchasers, to
the effect that:
(i) The Company and the Subsidiaries have been duly
incorporated and are validly existing and in good standing under
the laws of their respective jurisdictions of incorporation and
have all requisite corporate power and authority to own their
properties and to conduct their business as described in the Final
Memorandum; PROVIDED that no opinion as to good standing need be
expressed with respect to VAD International, Inc. subsequent to
June 25, 1997.
(ii) Except as described in the Final Memorandum, all of the
outstanding shares of capital stock of the Subsidiaries are owned,
directly or indirectly, by the Company, free and clear of all
perfected security interests and, to the best knowledge of such
counsel, free and clear of all other liens, encumbrances, equities
and claims or restrictions on transferability (other than those
imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting.
(iii) Except as set forth in the Final Memorandum, to the best
of such counsel's knowledge, no holder of securities of the Company
or any Subsidiary is entitled to have such securities registered
under a registration statement filed by the Issuers pursuant to the
Registration Rights Agreement.
(iv) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform each of its obligations
under the Indenture, the Company has all requisite corporate power
and authority to execute, deliver and perform each of its
obligations under the Notes, the Exchange Notes and the Private
Exchange Notes; the Guarantors have all requisite corporate power
and authority to execute, deliver and perform each of their
obligations under the Guarantees; the Indenture meets the
requirements
-21-
for qualification under the TIA; the Indenture has been duly and validly
authorized, executed and delivered by each of the Issuers and (assuming the
due authorization, execution and delivery thereof by the Trustee)
constitutes the legally valid and binding agreement of each of the Issuers,
enforceable against the Issuers in accordance with its terms, except that
the enforcement thereof may be limited or qualified by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors and (ii) general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought.
(v) The Notes are in the form contemplated by the Indenture. The
Notes have each been duly and validly authorized, executed and delivered by
the Company and, when paid for by the Initial Purchasers in accordance with
the terms of this Agreement (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance with the Indenture),
will constitute the legally valid and binding obligations of the Company,
will be entitled to the benefits of the Indenture, and will be enforceable
against the Company in accordance with their terms, except that the
enforcement thereof may be limited or qualified by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors and (ii) general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought.
(vi) The Guarantees are in the form contemplated by the Indenture.
The Guarantees have each been duly and validly authorized, executed and
delivered by the Subsidiaries and, when paid for by the Initial Purchasers
in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication and delivery of the Guarantees by the
-22-
Trustee in accordance with the Indenture), will constitute the legally
valid and binding obligations of the Subsidiaries, and will be enforceable
against the Subsidiaries in accordance with their terms, except that the
enforcement thereof may be limited or qualified by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors and (ii) general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought.
(vii) The Exchange Notes and the Private Exchange Notes have been duly
and validly authorized by the Company, the Guarantees to be endorsed on the
Exchange Notes and the Private Exchange Notes have been duly and validly
authorized by the Guarantors and, when the Exchange Notes and Guarantees
thereof and the Private Exchange Notes have been duly executed and
delivered by the Issuers in accordance with the terms of the Registration
Rights Agreement and the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and the Private Exchange
Notes by the Trustee in accordance with the Indenture), will constitute the
legally valid and binding obligations of the Issuers, be entitled to the
benefits of the Indenture, and be enforceable against the Issuers in
accordance with their terms, except that the enforcement thereof may be
limited or qualified by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors and
(ii) general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought.
(viii) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement; the Registration Rights Agreement has been
duly and validly authorized, executed and delivered by each of the Issuers
and (assuming due authorization, execution and delivery thereof by the
Initial
-23-
Purchasers) constitutes the legally valid and binding agreement of each of
the Issuers, enforceable against each of the Issuers in accordance with its
terms, except that the enforcement thereof may be limited or qualified by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights and
remedies of creditors and (ii) general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought
and (iii) the unenforceability under certain circumstances under law or
court decision of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy.
(ix) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby; each of
the Issuers has duly and validly authorized this Agreement and the
consummation by the Issuers of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of the
Issuers.
(x) The Indenture, the Securities and the Registration Rights
Agreement conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
(xi) The execution, delivery and performance by the Company and the
Subsidiaries of this Agreement, the Indenture, the Registration Rights
Agreement and each of the other Offering Documents to which such entity
is a party (including, without limitation, the issuance and sale of the
Securities to the Initial Purchasers) will not conflict with or
constitute or result in a breach or a default under (or an event which
with notice or passage of time or both would constitute a default under)
or violation of any of (i) the terms or provisions of any Contract to
which such entity is a party identified to such counsel as material,
except for any such conflict, breach, violation, default or event which
would not, individually or in the aggregate, have a Material Adverse Ef-
-24-
fect, (ii) the certificate of incorporation or bylaws (or similar
organizational document) of such entity, or (iii) (assuming compliance
with all applicable federal securities and state securities or "Blue Sky"
laws) any federal, New York or Illinois statute, judgment, decree, order,
rule or regulation known to such counsel to be applicable to such entity
or any of its respective properties or assets, except for any such
conflict, breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
(xii) To the best of such counsel's knowledge, no consent,
approval, authorization or order of any governmental authority is
required for the performance of any of the Offering Documents by the
Company or any Subsidiary, except such as may be required under Blue Sky
laws and except as required pursuant to or contemplated by the
Registration Rights Agreement, as to which such counsel need express no
opinion, and those which have previously been obtained.
(xiii) None of the Company or the Subsidiaries is, or immediately
after the sale of the Securities to be sold hereunder and the application
of the proceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xiv) Assuming (i) the accuracy of, and compliance by the Initial
Purchasers with, their representations, warranties and covenants in
Section 8 of the Purchase Agreement, (ii) that the initial resale of the
Securities by the Initial Purchasers is made only to "qualified
institutional buyers" as defined in Rule 144A promulgated under the Act
("QIBs") or a limited number of "accredited investors" as defined in Rule
501(a)(1), (2), (3) or (7) under the Act ("Accredited Investors"), (iii)
compliance by the Issuers' with Section 5(l) and the accuracy of the
Issuers' representations and warranties in Section 2(hh) and with respect
to whether (w) any form of general solicitation was used by the Issuers,
(x) the Final Memorandum contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act, (y) other
offerings of securities are of the same class as the Securities or
-25-
are of the same class as other securities of the Issuers that are listed on
a national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended, or quoted in a U.S. automated
inter-dealer quotation system, (iv) the accuracy of the representations
made by each Accredited Investor in the form of Annex A to the Final
Memorandum, and (v) that each QIB and Accredited Investor to whom the
Initial Purchasers originally sell the Securities receives a copy of the
Final Memorandum at or prior to the delivery of a confirmation of sale,
no registration of the Securities under the Act and no qualification of
the Indenture under the TIA is required in connection with the purchase
of the Securities by the Initial Purchasers, or the initial resale of the
Securities by the Initial Purchasers to QIBs or Accredited Investors, in
each case in the manner contemplated by the Purchase Agreement and the
Final Memorandum.
(xv) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation G, T (assuming that the Initial
Purchasers do not sell Securities to any person or entity subject to
Regulation T for such person's or entity's own account), U or X of the
Board of Governors of the Federal Reserve System.
At the time the foregoing opinion is delivered, Xxxxxx & Xxxxxxx shall
additionally state that it has participated in conferences with officers
and other representatives of the Issuers, representatives of the
independent public accountants for the Issuers, representatives of the
Initial Purchasers and counsel for the Initial Purchasers, at which
conferences the contents of the Final Memorandum and related matters were
discussed, and, although it has not independently verified and is not
passing upon and assumes no responsibility for the accuracy, completeness
or fairness of the statements contained in the Final Memorandum, during the
course of such participation (relying as to materiality to the extent they
deemed appropriate upon the statements of officers and other
representatives of the Issuers) no facts have come to its attention which
lead it to believe that the Final Memorandum, on the date thereof or at the
Closing Date, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary
-26-
to make the statements contained therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
firm need express no opinion with respect to the financial statements and
related notes thereto and the other financial, statistical and accounting
data included in the Final Memorandum). The opinion of Xxxxxx & Xxxxxxx
described in this Section shall be rendered to the Initial Purchasers at
the request of the Issuers and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance reasonably satisfactory to the Initial
Purchasers, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers,
with respect to certain legal matters relating to this Agreement and such
other related matters as the Initial Purchasers may reasonably require. In
rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx shall have received and may
rely upon such certificates and other documents and information as it may
reasonably request to pass upon such matters.
(c) The Initial Purchasers shall have received from each of the
Independent Accountants a comfort letter or letters dated the date hereof
and the Closing Date, in form and substance satisfactory to counsel for the
Initial Purchasers.
(d) The representations and warranties of the Issuers contained in
this Agreement shall be true and correct 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
(other than to the extent any such representation or warranty is expressly
made as to a certain date); the statements of the officers of the Issuers
made pursuant to any certificate delivered in accordance with the
provisions hereof shall be true and correct on and as of the date made and
on and as of the Closing Date; the Issuers shall each have performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and,
except as disclosed in the Final Memorandum (exclusive of any amendment or
-27-
supplement thereto after the date hereof), subsequent to the date of the
most recent financial statements in such Final Memorandum, there shall have
been no event or development, and no information shall have become known,
that, individually or in the aggregate, has had or would be reasonably
likely to have a Material Adverse Effect.
(e) None of the sale of the Securities or any of the other
Transactions hereunder shall be enjoined (temporarily or permanently) on
the Closing Date.
(f) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or any Subsidiary shall have
sustained any loss or interference with respect to any of their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or from any legal or governmental
proceeding, order or decree, which loss or interference, individually or in
the aggregate, has had or would be reasonably likely to have a Material
Adverse Effect.
(g) The Initial Purchasers shall have received a certificate of each
of the Issuers, dated the Closing Date, signed on behalf of such Issuer by
its Chairman of the Board, President or any Senior Vice President and the
Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Issuers contained
in this Agreement are true and correct on and as of the date hereof
and on and as of the Closing Date, and the Issuers have in all
material respects performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or development known to such officer has occurred,
and no information has become known, that, individually or in the
aggregate, has had or would be reasonably likely to have a Material
Adverse Effect; and
-28-
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Issuers and such
agreement shall be in full force and effect.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Issuers shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. OFFERING OF SECURITIES; RESTRICTIONS ON TRANSFER. Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a QIB.
Each of the Initial Purchasers agrees with the Issuers (as to itself only) that
(i) it has not and will not solicit offers for, or offer or sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; and (ii) it has and will solicit
offers for the Securities only from, and will offer the Securities only to
(A) in the case of offers inside the United States, (x) persons whom the Initial
Purchasers reasonably believe to be QIBs 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 Purchasers that
each such account is a QIB, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be Accredited
Investors that, prior to their purchase of the Securities, deliver to the
Initial Purchasers a letter containing the representations and agreements set
forth in Annex A to the Final Memorandum and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("foreign purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); PROVIDED, HOWEVER, that, in the case of this clause (B),
in purchasing such Securities such persons are deemed to
-29-
have represented and agreed as provided under the caption "Transfer
Restrictions" contained in the Final Memorandum.
9. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Issuers,
jointly and severally, agrees to indemnify and hold harmless the Initial
Purchasers, and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which any Initial Purchaser or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by the Issuers or based upon written information furnished by or
on behalf of the Issuers filed in any jurisdiction in order to qualify the
Securities under the securities or "Blue Sky" laws thereof or filed with
any securities association or securities exchange (each an "Application");
or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, the Issuers
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 untrue statement or
alleged untrue statement or omission or alleged omission made in any Memorandum
or any amendment or supplement thereto or any Application in reliance upon and
in conformity with written information concerning the Initial Purchasers
furnished to the Issuers by the Initial Purchasers specifically for use therein.
This indemnity agreement will be in addition to any liability that the Issuers
may otherwise have to the indemnified parties; and PROVIDED, FURTHER,
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that the Company will not be liable to the Initial Purchasers or any person
controlling the Initial Purchasers or any of their respective affiliates,
directors, officers, agents, representatives or employees with respect to any
such untrue statement or omission made in the Preliminary Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement thereto) if
(i) the person asserting any such loss, claim, damage or liability purchased
Notes from the Initial Purchasers in reliance upon the Preliminary Memorandum
but was not delivered or sent a copy of the Final Memorandum (as amended or
supplemented) at or prior to the written confirmation of the sale of such Notes
to such person, unless such failure to deliver or send the Final Memorandum (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(d) of this Agreement and (ii) it shall have been determined that the
Initial Purchasers, and each such controlling person, if any, would not have
incurred such losses, claims, damages or liabilities had the Final Memorandum
been delivered or sent. The Issuers shall not be liable under this Section 9
for any settlement of any claim or action effected without the prior written
consent of the Company, which shall not be unreasonably withheld.
(b) The Initial Purchasers severally agree to indemnify and hold
harmless the Issuers, their respective directors, officers and each person, if
any, who controls such entity within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which such entity or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum or any amendment or
supplement thereto or any Application, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto or any Application, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning such Initial Purchaser, furnished to the Issuers by such
Initial Purchaser specifically for use therein; and subject to the limitation
set forth immediately preceding this clause, will reimburse, as incurred, any
legal or other expenses incurred by the Issuers or any such director,
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officer or controlling person in connection with investigating or defending
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action in respect thereof. This indemnity agreement
will be in addition to any liability that the Initial Purchasers may otherwise
have to the indemnified parties. The Initial Purchasers shall not be liable
under this Section 9 for any settlement of any claim or action effected without
their consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party
(i) will not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent 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 paragraphs (a) and
(b) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that 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 defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties (it being understood,
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however, that in connection with any such action the indemnifying party shall
not be liable for the expenses of more than one separate counsel (in addition to
local counsel) designated by the Initial Purchasers in the case of paragraph (a)
of this Section 9 or the Issuers in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions). After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence or (ii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying
party to such indemnified party, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the prior written consent of the indemnifying party
(which consent shall not be unreasonably withheld), unless such indemnified
party waived in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent. The
Issuers shall not, without the prior written consent of the Initial Purchasers,
effect any settlement or compromise of any pending or threatened proceeding in
respect of which any Initial Purchaser is or could have been a party, or
indemnity could have been sought hereunder by any Initial Purchaser, unless such
settlement (A) includes an unconditional written release of the Initial
Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Initial Purchaser.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or li-
-33-
abilities (or actions in respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party on the other from the offering
of the Securities or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Issuers on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by such Initial Purchaser hereunder. The relative
fault of the parties 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 Issuers on the one hand, or such Initial Purchaser on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Issuers and the Initial Purchasers agree that it would not
be equitable if the amount of such contribution were determined by pro rata or
per capita allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the first sentence of
this paragraph (d). Notwithstanding any other provision of this paragraph (d),
no Initial Purchaser shall be obligated to make contributions hereunder that in
the aggregate exceed the total discounts, commissions and other compensation
received by such Initial Purchaser under this Agreement, less the aggregate
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and 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. For purposes of this paragraph (d), each person, if any, who
controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each director, officer and each person, if any, who
controls any Issuer within the
-34-
meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as the Issuers.
10. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
officers and the Initial Purchasers set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Issuers, any of
their respective Affiliates or any of their respective officers or directors,
the Initial Purchasers or any controlling person referred to in Section 9 hereof
and (ii) delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 9 and 15
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Issuers shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on their part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage
or any legal or governmental proceeding, which loss or interference, in the
sole judgment of the Initial Purchasers, has had or has a Material Adverse
Effect, or there shall have been, in the sole judgment of the Initial
Purchasers, any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a Material Adverse
Effect (including without limitation a change in control of the Company or
the Subsidiaries), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities of the Company or in securities generally
on the New York Stock Exchange, American Stock Exchange or the NASDAQ
National Market shall have been suspended or minimum or maximum prices
shall have been established on any such exchange or market;
-35-
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency, or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above and in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities as
contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The statements
set forth in the last paragraph on the front cover page and in the second and
third sentences of the third paragraph under the heading "Private Placement" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Issuers for the purposes of Sections 2(a) and 9 hereof.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to (i) BT
Securities Corporation, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department; if sent to the Issuers, shall be mailed or
delivered to the Company at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer; with a copy to Xxxxxx & Xxxxxxx, 0000 Xxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
-36-
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the issuers and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that
(i) the indemnities of the Issuers contained in Section 9 of this Agreement
shall also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Issuers, their officers and any person or persons who control the Issuers
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchasers will be deemed a
successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
undertakings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers and
the Initial Purchasers.
Very truly yours,
FEDERAL DATA CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
FDCT CORP.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
NYMA, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
XXXXXXX MANAGEMENT SYSTEMS CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
FDC TECHNOLOGIES INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
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DOXSYS, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
VAD INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BT SECURITIES CORPORATION
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Senior Managing Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
SCHEDULE 1
Principal
Amount of
Initial Purchaser Notes
----------------- -----
BT Securities Corporation.................. $63,000,000
Xxxxxx Brothers Inc........................ 42,000,000
------------
Total................................. $105,000,000
SCHEDULE 2
Subsidiary Incorporation
---------- -------------
Federal Data Corporation Delaware
FDCT Corp. Delaware
FDC Technologies Inc. Delaware
DoxSys, Inc. Delaware
Xxxxxxx Management Systems Corporation Maryland
NYMA, Inc. Maryland
VAD International, Inc. Maryland
