Exhibit 1.1
FRIENDLY ICE CREAM CORPORATION
$175,000,000 SENIOR NOTES DUE 2012
PURCHASE AGREEMENT
March 3, 2004
Xxxxxxx, Xxxxx & Co.
Banc of America Securities LLC
XX Xxxxx Securities Corporation
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Friendly Ice Cream Corporation, a Massachusetts corporation (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Purchasers named in Schedule I hereto (the "PURCHASERS")
an aggregate of $175,000,000 in principal amount of its 8 3/8% Senior Notes due
2012 (the "NOTES"). The Notes will be unconditionally guaranteed (the
"GUARANTEE") by Friendly's Restaurants Franchise, Inc., a Delaware corporation
(the "GUARANTOR" and together with the Company, the "ISSUERS"). The Notes and
the Guarantee are hereinafter collectively referred to as the "SECURITIES."
1. The Issuers, jointly and severally, represent and warrant to, and
agree with, each of the Purchasers that:
(a) A preliminary offering circular, dated February 23, 2004
(the "PRELIMINARY OFFERING CIRCULAR") and an offering circular, dated March
3, 2004 (the "OFFERING CIRCULAR") have been prepared in connection with the
offering of the Securities. Any reference to the Offering Circular, as
amended or supplemented, as of any specified date, shall be deemed to refer
to and include (i) any documents filed with the United States Securities
and Exchange Commission (the "COMMISSION") pursuant to Section 13(a), 13(c)
or 15(d) of the United States Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), after the date of the Offering Circular and prior to
such specified date and (ii) any Additional Issuer Information (as defined
in Section 5(f)) furnished by any Issuer prior to the completion of the
distribution of the Securities; and all documents filed under the Exchange
Act and so deemed to be included in the Offering Circular, or any amendment
or supplement thereto are hereinafter called the "EXCHANGE ACT REPORTS".
The Exchange Act Reports, when they are filed with the Commission, will
conform in all material respects to the applicable requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder. The Preliminary Offering Circular and the Offering Circular and
any amendments or supplements thereto and the Exchange Act Reports did not
and will not, as of their respective dates or, in the case of the Offering
Circular, as of the Time of Delivery, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Purchaser through Xxxxxxx, Sachs &
Co. expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
which loss or interference is material to the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Offering Circular; and, since the respective dates as of which information
is given in the Offering Circular, there has not been any change in the
capital stock (other than as a result of exercises of stock options) or
increase in long-term debt (other than working capital borrowings in the
ordinary course of business consistent with past practices) of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Offering Circular or such as do not materially affect the value of such
property and do materially not interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such property and buildings by the Company
and its subsidiaries;
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Massachusetts,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Circular, and has been
duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated or organized and is
validly existing as a corporation or limited liability company in good
standing under the laws of its jurisdiction of organization; the entities
set forth on Schedule II are the only direct or indirect subsidiaries of
the Company;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims (other than liens arising under
the credit facility dated as of December 17, 2001, as amended through the
date hereof,
among the Company, Fleet National Bank and the lenders from time to time
party thereto (the "Revolving Credit Facility"));
(f) The Securities have been duly authorized and, when the Notes
are issued and delivered to and paid for by the Purchasers pursuant to this
Agreement and authenticated by the Trustee, the Notes will have been duly
authenticated, and the Securities will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Issuers entitled to the benefits provided by the indenture to be dated as
of the date of the Time of Delivery (the "INDENTURE") among the Issuers and
The Bank of New York, as Trustee (the "TRUSTEE"), under which they are to
be issued, which will be substantially in the form previously delivered to
you; the Indenture has been duly authorized and, when executed and
delivered by the Issuers and the Trustee, the Indenture will constitute a
valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Circular and will be in substantially
the form previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System;
(h) Prior to the date hereof, no Issuer nor any affiliate of any
Issuer has taken any action which is designed to or which has constituted
or which might have been expected to cause or result in stabilization or
manipulation of the price of the Securities;
(i) The Registration Rights Agreement to be entered into among
the Issuers and the Purchasers, substantially in the form of EXHIBIT A
hereto (the "REGISTRATION RIGHTS AGREEMENT"), has been duly authorized by
each of the Issuers and, when executed and delivered by each of the Issuers
(assuming the due authorization, execution and delivery of the Registration
Rights Agreement by the Purchasers), will constitute a valid and legally
binding agreement of each of the Issuers, enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles and except
that any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations; and the
Registration Rights Agreement will conform to the description thereof in
the Offering Circular;
(j) The Exchange Securities (as defined in the Registration
Rights Agreement) have been duly authorized by each of the Issuers and,
when the Exchange Notes (as defined in the Registration Rights Agreement)
are authenticated and the Exchange Securities executed, issued and
delivered in accordance with the Indenture and the Registration Rights
Agreement (assuming the due authorization, execution and delivery of the
Indenture by the Trustee), the Exchange Securities will constitute valid
and legally binding obligations of each of the Issuers, entitled to the
benefits provided by the Indenture, under which they are to be issued, and
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(k) The issue and sale of the Securities and the compliance by
the Issuers with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, assuming the effectiveness of Amendment No. 4 to
the Credit Agreement and except as, individually or in the aggregate, would
not have a material adverse effect on the current or future financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), nor will
such action result in any violation of the provisions of the certificate of
incorporation, by-laws or other organizational document of any Issuer or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Issuers of the transactions
contemplated by this Agreement or the Indenture, except for the filing of a
registration statement by the Issuers with the Commission pursuant to the
United States Securities Act of 1933, as amended (the "ACT") pursuant to
Section 5(l) hereof and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Purchasers;
(l) Neither the Company nor any of its subsidiaries is (i) in
violation of its certificate of incorporation, by-laws or other
organizational documents or (ii) in default in the performance or
observance of any material obligation, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, other than, in the case of this clause (ii),
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect;
(m) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities, under the captions "Certain U.S.
Federal Income Tax Consequences," "Description of the Revolving Credit
Facility" and "Underwriting" (other than the sixth, seventh, eighth and
twelfth paragraphs of such "Underwriting" section), insofar as they purport
to describe the provisions of the laws and documents referred to therein,
are accurate in all material respects;
(n) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject in which (A) there is a reasonable
possibility that such proceedings might be determined adversely to the
Company or any of its subsidiaries and (B) if so determined adversely to
the Company or any of its subsidiaries, such proceeding would, individually
or in the aggregate, have a Material Adverse Effect; and, to the best of
the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(o) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the Securities Act as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act) or quoted in a U.S. automated inter-dealer quotation system;
(p) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(q) No Issuer is, or after giving effect to the offering and sale
of the Securities, will be, an "investment company", as such term is
defined in the United States Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT");
(r) None of the Issuers, or any person acting on behalf of any
Issuer (other than the Purchasers as to whom no representation is made) has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Act or,
with respect to Securities sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Act), by means of any directed
selling efforts within the meaning of Rule 902 under the Securities Act and
the Issuers, each of their respective affiliates and any person acting on
their behalf has complied with and will implement the "offering
restrictions" within the meaning of such Rule 902;
(s) Within the preceding six months, none of the Issuers or any
other person acting on behalf of any Issuer has offered or sold to any
person any Securities, or any securities of the same or a similar class as
the Securities, other than Securities offered or sold to the Purchasers
hereunder. The Issuers will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Act) of any Securities or any
substantially similar security issued by any Issuer, within six months
subsequent to the date on which the distribution of the Securities has been
completed (as notified to the Company by Xxxxxxx, Xxxxx & Co.), is made
under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act;
(t) The financial statements included in the Offering Circular
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations, changes
in stockholders' equity and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis. The information, to the extent derived from the Company's audited
financial statements, set forth under the captions "Offering Circular
Summary--Summary Consolidated Financial and Other Information" and
"Selected Consolidated Financial and Other Information" included in the
Offering Circular fairly present the information set forth therein on a
basis consistent with that of the audited financial statements of the
Company;
(u) None of the Issuers or any affiliate of any Issuer does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(v) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(w) Other than as would not, individually or in the aggregate,
result in a Material Adverse Effect, each of the Company and its
subsidiaries possesses and is in compliance with such permits, licenses,
franchises, approvals and authorizations of governmental or regulatory
authorities (the "PERMITS") as are necessary to own its respective
properties and to conduct its business in the manner described in the
Offering Circular, and, to the best of the Company's knowledge, no event
has occurred that allows, or after notice or lapse of time would allow, any
governmental or regulatory authorities to revoke or terminate any such
Permits;
(x) Other than as set forth in the Offering Circular or as would
not, individually or in the aggregate, result in a Material Adverse Effect,
(A) none of the Company or any of its subsidiaries is in violation of or
has liability (accrued, contingent, absolute, determinable or otherwise)
(collectively, "LIABILITY") pursuant to any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof
(including, without limitation, any judicial or administrative order,
consent decree or judgment) relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), wildlife,
natural resources, mining or post-mining land reclamation, or occupational
safety or health, including, without limitation, those relating to the
release or threatened release of chemicals, pollutants, contaminants, solid
or hazardous wastes, toxic substances, hazardous substances, hazardous
materials, petroleum or petroleum products or wastes (including, without
limitation, crude oil or any fraction thereof) (collectively, "HAZARDOUS
MATERIALS") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, release, transport or handling of Hazardous
Materials (collectively, "ENVIRONMENTAL LAWS"), (B) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to Environmental Laws against the
Company or any of its subsidiaries, or against any person or entity whose
Liability under Environmental Laws the Company or any of its subsidiaries
has or may have retained or assumed by agreement or by operation of law and
(C) there are no events or circumstances that might reasonably be expected
to form the basis of an order for compliance, clean-up, investigation,
remediation or reclamation, or an action, suit or proceeding by any private
party or entity or governmental authority against or affecting, or
otherwise expected to result in Liability to, the Company or any of its
subsidiaries relating to Hazardous Materials or Environmental Laws;
(y) The Company and its subsidiaries maintain systems of internal
accounting controls sufficient to provide reasonable assurance 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 accountability with regard
to its assets; (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; and
(z) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act); the Company's auditors and the Audit Committee of the Board
of Directors have been advised of: (1) any significant deficiencies in the
design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data;
and (2) any fraud, whether or not material, that involves management or
other employees who have a role in the Company's internal controls; any
material weaknesses in internal controls have been identified for the
Company's auditors; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant
changes in internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.25% of the principal amount thereof, plus accrued interest thereon
from March 8, 2004 until the Time of Delivery, the principal amount of Notes set
forth opposite the name of such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Issuers that:
(a) It acknowledges that the Securities have not been registered
under the Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except pursuant to an
exemption from the registration requirements of the Act; it will offer and
sell the Securities only to: (i) persons who it reasonably believes are
"qualified institutional buyers" ("QIBs") within the meaning of Rule 144A
under the Act in transactions meeting the requirements of Rule 144A, or
(ii) upon the terms and conditions set forth in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor within the meaning
of Rule 501 under the Act; and
(c) Neither it nor any person acting on its behalf will offer or
sell the Securities by any form of general solicitation or general
advertising, including but not limited to the methods described in Rule
502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer of Federal (same day) funds to the account specified by the Company to
Xxxxxxx, Sachs & Co. at least forty-eight hours in advance, by causing DTC to
credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The Company
will cause
the certificates representing the Securities to be made available to
Xxxxxxx, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "DESIGNATED OFFICE"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on March 8, 2004 or such other time and date
as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing. Such time and
date are herein called the "TIME OF DELIVERY".
(b) The documents to be delivered at the Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(k) hereof, will be delivered at such time and
date at the offices of Xxxxxx Xxxxxx & Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the "CLOSING LOCATION"), and the Securities will be delivered at
the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 4:00 p.m., New York City time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"NEW YORK BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Issuers, jointly and severally, agree with each of the
Purchasers:
(a) To prepare the Offering Circular in a form approved by you;
to make no amendment or any supplement to the Offering Circular which shall
be disapproved by you promptly after reasonable notice thereof; and to
furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
no Issuer shall be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(c) To furnish the Purchasers with copies of the Offering
Circular and each amendment or supplement thereto in such quantities as you
may from time to time reasonably request, and if, at any time prior to the
earlier of (i) the completion of distribution of the Securities and (ii)
the expiration of nine months after the date of the Offering Circular, any
event shall have occurred as a result of which the Offering Circular as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Offering Circular is delivered, not misleading, or, if
for any other reason it shall be necessary or advisable during such same
period to amend or supplement the Offering Circular, to notify you and upon
your request to prepare and furnish without charge to each Purchaser and to
any dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Offering Circular or a
supplement to the Offering Circular which will correct such statement or
omission or effect such necessary or advisable amendment or supplement;
(d) During the period beginning from the date hereof and
continuing until the date 90 days after the Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of, without the written consent
of Xxxxxxx, Sachs & Co., except as provided hereunder, any additional Notes
or any security that is substantially similar to the Notes;
(e) Not to be or become, at any time prior to the expiration of
two years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time, prior to the expiration of two years after the
Time of Delivery, when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the
"ADDITIONAL ISSUER INFORMATION") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act;
(g) If requested by you, to use its reasonable best efforts to
cause the Securities to be eligible for the PORTAL trading system of the
National Association of Securities Dealers, Inc.;
(h) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to you as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities or any class of securities of
the Company is listed;
(i) During the period of two years after the Time of Delivery,
the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Securities Act) over which it exercises
control to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them;
(j) The Issuers shall comply with all the terms and conditions of
the Registration Rights Agreement; and
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds".
6. The Issuers, jointly and severally, covenant and agree with the
several Purchasers that the Issuers will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Issuers' counsel and accountants
in connection with the issue of the Securities and all other expenses in
connection with the preparation and printing of the Preliminary Offering
Circular and the Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of producing any Agreement among Purchasers, this Agreement, the
Indenture, the Blue Sky survey, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky survey; (iv) any fees charged
by securities rating services for rating the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (vii) any cost incurred in
connection with the designation of the Securities for trading in PORTAL; and
(viii) all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Issuers herein are, at and as of the Time of Delivery,
true and correct, the condition that the Issuers shall have performed all of
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the Purchasers,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to such matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(b) Mayer, Brown, Xxxx & Maw LLP, counsel for the Issuers, shall
have furnished to you their written opinion, dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Guarantor is validly existing as a corporation
in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Offering Circular;
(ii) The Guarantee has been duly authorized, executed,
and delivered by the Guarantor. The Securities constitute valid and
legally binding obligations of the Issuers entitled to the benefits
provided by the Indenture; and the Securities and the Indenture
conform in all material respects to the descriptions thereof in the
Offering Circular;
(iii) The Guarantee of the Exchange Notes has been duly
authorized by the Guarantor. Assuming the due authorization of the
Exchange Notes by the Company, when the Exchange Notes are duly and
validly executed, issued and delivered by the Company in accordance
with the terms of the Registration Rights Agreement and the
Indenture, the Exchange Securities will constitute valid and legally
binding obligations of the Issuers entitled to the benefits provided
by the Indenture;
(iv) This Agreement has been duly authorized, executed
and delivered by the Guarantor;
(v) The Indenture has been duly and validly authorized,
executed and delivered by the Guarantor and constitutes a valid and
legally binding instrument of the Issuers, enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(vi) The Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the Guarantor and
constitutes a valid and legally binding instrument of the Issuers,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and except that any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and
public policy considerations;
(vii) The issue and sale of the Securities and the
compliance by the Issuers with all of the provisions of the
Securities, the Indenture, this Agreement and the Registration
Rights Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any agreement listed on the exhibit index to the
Company's annual report on Form 10-K for the fiscal year ended
December 28, 2003 and any subsequent Exchange Act filing made at or
prior to the Time of Delivery, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Guarantor, any Applicable Laws or any order, judgment
or decree of any court or governmental agency or body of the State
of New York, the United States or the State of Delaware (acting
under the Delaware General Corporation Law) known to us to be
applicable to the Company or any of its subsidiaries. "APPLICABLE
LAWS" means the General Corporation Law of the State of Delaware and
those laws, statutes, rules and regulations of the State of New York
and the Federal laws of the United States of America, in each case
which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement and would
normally be applicable to general business corporations which are
not engaged in regulated business activities (other than state
securities laws and antifraud laws), but without having made any
special investigation concerning the applicability of any other law,
statute, rule or regulation;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Issuers of the
transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except (A) with respect to the
Exchange Securities, registration under the Act and applicable state
securities laws as contemplated by the Registration Rights Agreement
and (B) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities by the Purchasers;
(ix) The statements set forth in the Offering Circular
under the caption "Description of Notes," insofar as they purport to
constitute a summary of the terms of the Securities, the Indenture,
and the Registration Rights Agreement under the captions "Certain
U.S. Federal Income Tax Considerations", "Description of the
Revolving Credit Facility" and "Underwriting" (other than the sixth,
seventh, eighth and twelfth paragraphs of such "Underwriting"
section), insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate in all material
respects;
(x) Assuming, without independent investigation, (a)
that the Securities are sold to the Purchasers and initially resold
by the Purchasers in accordance with the terms of, and in the manner
contemplated by, this Agreement and the Offering Circular, (b) the
accuracy of, and due performance by, each of the Issuers with
respect to the representations, warranties and agreements set forth
in Sections 1(o), 1(r) and 1(s) of this Agreement, (c) the accuracy
of, and due performance by, each of the Purchasers with respect to
the representations, warranties and agreements of the Purchasers set
forth in this Agreement, (d) the accuracy of the representations and
warranties deemed to be made pursuant to the Offering Circular by
purchasers to whom the Purchasers initially resell the Securities,
no registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust
Indenture Act of 1939 with respect thereto, is required for the
offer, sale and initial resale of the Securities by the Purchasers
in the manner contemplated by this Agreement;
(xi) The Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements
of the Exchange Act, and the rules and regulations of the Commission
thereunder;
(xii) To such counsel's knowledge and other than as set
forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject in which (A) there is a reasonable
possibility that such proceedings might be determined adversely to
the Company or any of its subsidiaries and (B) if so determined
adversely to the Company or any of its subsidiaries, such
proceedings would individually or in the aggregate have a Material
Adverse Effect; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others; and
(xiii) No Issuer is an "investment company", as such term
is defined in the Investment Company Act.
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and other representatives of
the Company, representatives of the Purchasers and representatives of the
Company's independent certified accountants at which conferences the
contents of the Offering Circular and related matters were discussed.
However, other than as set forth in paragraph (ix) above and the last
clause of paragraph (ii) above, such counsel does not express any opinion
with respect to, and assumes no responsibility for, the accuracy,
completeness
or fairness of the statements contained in the Offering Circular or make
any representation that such counsel has independently verified or checked
the accuracy, completeness or fairness of such statements. On the basis of
such counsel's examination and the above-referenced discussions, and
subject to the foregoing, such counsel shall advise that nothing has come
to such counsel's attention that has led such counsel to believe that the
Offering Circular (except for the financial data contained therein or
omitted therefrom, including the financial statements and the related
footnotes and schedules thereto, as to which such counsel expresses no
belief and makes no statement), as of its date or as of the Time of
Delivery, included or includes an untrue statement of a material fact
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of circumstances under which they were made,
not misleading;
As to the due authorization, execution and delivery by the
Company of this Agreement, the Notes, the Registration Rights Agreement and
the Indenture, Mayer, Brown, Xxxx & Maw LLP may rely on the legal opinion
contemplated by Section 7(d);
(c) Xxxxxx Xxxxxx, Deputy Counsel to the Company, shall have
furnished to you his written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has an authorized capitalization as set
forth in the Offering Circular;
(ii) Each of the Issuers has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(iii) Each subsidiary of the Company (other than the
Guarantor, which is covered by the opinion contemplated by Section
7(b)) is validly existing as a corporation or limited liability
company in good standing under the laws of its jurisdiction of
organization; and all of the issued shares of capital stock (or
membership interest) of each such subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable,
and all of the issued shares of capital stock of each subsidiary of
the Company (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims other than liens arising under the
Revolving Credit Facility (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall
state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) To the best of such counsel's knowledge and other
than as set forth in the Offering Circular, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject in which (A) there is a
reasonable possibility that such proceedings might be determined
adversely to the Company or any of its subsidiaries and (B) if so
determined adversely to the Company or any of its subsidiaries, such
proceedings would individually or in the aggregate have a Material
Adverse Effect; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) To such counsel's knowledge, after due inquiry,
neither the Company nor any of its subsidiaries is (i) in violation
of its certificate of incorporation, by-laws or other organizational
documents or (ii) in default in the performance or observance of any
material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound, other than, in the case of this
clause (ii), defaults which would not, individually or in the
aggregate, have a Material Adverse Effect; and
(vi) The Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements
of the Exchange Act, and the rules and regulations of the Commission
thereunder.
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and other representatives of
the Company, representatives of the Purchasers and representatives of the
Company's independent certified accountants at which conferences the
contents of the Offering Circular and related matters were discussed.
However, such counsel does not express any opinion with respect to, and
assumes no responsibility for, the accuracy, completeness or fairness of
the statements contained in the Offering Circular or makes any
representation that he has independently verified or checked the accuracy,
completeness or fairness of such statements. On the basis of his
examination and the above-referenced discussions, and subject to the
foregoing, such counsel shall advise that nothing has come to his attention
that has led him to believe that the Offering Circular (except for the
financial data contained therein or omitted therefrom, including the
financial statements and the related footnotes and schedules thereto, as to
which he expresses no belief and makes no statement), as of its date or as
of the Time of Delivery, included or includes an untrue statement of a
material fact omitted or omits to state a material fact necessary in order
to make the statements therein, in light of circumstances under which they
were made, not misleading;
(d) Xxxxxx, Xxxx & Xxxxxxx, special Massachusetts counsel to the
Company, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company is validly existing as a corporation in
good standing under the laws of Massachusetts, with corporate power
and authority to own its properties and conduct its business as
described in the Offering Circular;
(ii) This Agreement has been duly authorized, executed
and delivered by the Company;
(iii) The Notes have been duly authorized, executed,
issued and delivered by the Company;
(iv) The Exchange Securities have been duly authorized
by the Company;
(v) The Indenture has been duly authorized, executed
and delivered by the Company;
(vi) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company; and
(vii) The issue and sale of the Notes and the compliance
by the Company with all of the provisions of the Notes, the
Indenture, this Agreement and the Registration Rights Agreement and
the consummation of the transactions herein and therein contemplated
will not result in any violation of the provisions of the articles
of organization or by-laws of the Company or any provisions of the
laws, statutes, rules and regulations of the State of Massachusetts
or any order, judgment or decree of any court or governmental agency
or body of Massachusetts known to us to be applicable to the Company
or any of its properties.
(e) On the date of the Offering Circular prior to the execution
of this Agreement and also at the Time of Delivery, Ernst & Young LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex II hereto;
(f) (i) Neither the Company nor any of its subsidiaries, shall
have sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular, and (ii) since the respective dates as of which
information is given in the Offering Circular, there shall not have been
any change in the capital stock (other than as a result of exercises of
stock options) or increase in long-term debt (other than working capital
borrowings in the ordinary course of business consistent with past
practices) of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Offering Circular, the effect of
which, in any such case described in clause (i) or (ii), is in the judgment
of Xxxxxxx, Xxxxx & Co. so material and adverse as to make it impracticable
or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded to any debt or preferred stock of any
Issuer by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any such debt
securities;
(h) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange; (ii) a suspension or limitation in trading in the Company's
securities on the American Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war or (v) the occurrence of
any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of the
Representatives is so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the terms and in the manner contemplated in this Agreement and in the
Offering Circular;
(i) The Securities have been designated for trading on PORTAL;
(j) At or simultaneously with the purchase of the Notes by the
Purchasers pursuant to Section 2, (1) all of the 10-1/2% senior notes due
2007 of the Company (the "EXISTING NOTES") validly tendered prior to the
Consent Payment Deadline (as defined in the Offer to Purchase) pursuant to
the Company's offer to purchase and solicitation of consents dated February
17, 2004 (the "OFFER TO PURCHASE") shall have been accepted by the Company
in accordance with the terms of the Offer to Purchase, (2) the supplemental
indenture contemplated by the Offer to Purchase shall have been executed
and delivered by all parties thereto, and the only condition to its
becoming operative shall be the acceptance of the Existing Notes tendered
and (3) in accordance with the redemption provisions of the indenture
governing the Existing Notes, the Company shall have issued an irrevocable
notice of redemption relating to the Existing Notes not purchased pursuant
to the Offer to Purchase;
(k) As of the Time of Delivery, all conditions to the
effectiveness of the fourth amendment to the revolving credit agreement
dated as of December 17, 2001 among the Company, the lenders party thereto
and Fleet National Bank, as administrative agent, as described in the
Offering Circular, other than the purchase of the Securities hereunder,
shall have been satisfied or waived.
(l) The Issuers shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Issuers
satisfactory to you as to the accuracy of the representations and
warranties of the Issuers herein at and as of such Time of Delivery, as to
the performance by the Issuers of all of their obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (f) and (g) of this Section and as to such other matters as
you may reasonably request.
8. (a) The Issuers, jointly and severally, will indemnify and hold
harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such
Purchaser may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Issuers shall 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 an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Offering Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Issuers against
any losses, claims, damages or liabilities to which the Issuers may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein 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 any Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through Xxxxxxx,
Xxxxx & Co. expressly for use therein; and will reimburse the Issuers for any
legal or other expenses reasonably incurred by the Issuers in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim
and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Issuers on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuers on the one hand and
the Purchasers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Issuers on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular. The relative fault 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 any Issuer on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Issuers
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Issuers under this Section 8 shall be in
addition to any liability which the Issuers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of each Issuer and to each person, if
any, who controls any Issuer within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or
another party or other parties to purchase such Securities on the terms
contained herein. If within thirty-six hours after such default by any Purchaser
you do not arrange for the purchase of such Securities, then the Company shall
be entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Securities
on such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such
Securities, or the Company notifies you that it has so arranged for the purchase
of such Securities, you or the Company shall have the right to postpone the Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or in
any other documents or arrangements, and the Issuers agree to prepare promptly
any amendments to the Offering Circular which in your opinion may thereby be
made necessary. The term "PURCHASER" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or any Issuer, except for the expenses to be borne by the Issuers and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Issuers and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or any Issuer, or
any officer or director or controlling person of any Issuer, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
no Issuer shall then be under any liability to any Purchaser except as provided
in Sections 6 and 8 hereof; but, if for any other reason, the Securities are not
delivered by or on behalf of the Issuers as provided herein, the Issuers will,
jointly and severally, reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale
and delivery of the Securities, but no Issuer shall then be under any further
liability to any Purchaser except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and
if to any Issuer shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Offering Circular,
Attention: Treasurer; provided, however, that any notice to a Purchaser pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Purchaser at its address set forth in its Purchasers'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Issuers and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of each Issuer and each person who
controls any Issuer or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Issuers are authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Purchasers imposing any
limitation of any kind.
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Issuers.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
FRIENDLY ICE CREAM CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President of
Administration, Chief Financial
Officer and Treasurer
FRIENDLY'S RESTAURANTS FRANCHISE, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
Accepted as of the date hereof:
XXXXXXX, SACHS & CO.
BANC OF AMERICA SECURITIES LLC
XX XXXXX SECURITIES CORP.
By: /s/ Xxxxxxx, Sachs & Co.
----------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Purchasers listed in Schedule I
SCHEDULE I
PRINCIPAL AMOUNT
OF SECURITIES TO
PURCHASER BE PURCHASED
--------------------------------------------- ----------------
Xxxxxxx, Sachs & Co. ........................ $ 131,250,000
Banc of America Securities LLC .............. 35,000,000
XX Xxxxx Securities Corp. ................... 8,750,000
--------------
Total ..................... $ 175,000,000
--------------
SCHEDULE II
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A. Accordingly, each Purchaser represents and agrees
that neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "SECURITIES ACT") and may not be offered
and sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the offering
and the closing date, except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further represents and agrees that it has not entered and
will not enter into any contractual arrangement with respect to the distribution
or delivery of the Securities, except with its affiliates or with the prior
written consent of the Company.
(2) Each Purchaser further represents and agrees that (i) it has not
offered or sold and, prior to the expiry of a period of six months from the date
of issue of the Securities, will not offer or sell any Securities 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; (2) it
has communicated or caused to be communicated and will communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of any
Securities only in circumstances in which section 21(1) of the FSMA does not
apply to the Company or the Subsidiary Guarantor; and (3) it has complied and
will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise involving the
United Kingdom.
(3) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each
Purchaser understands that no action has been taken to permit a public offering
in any jurisdiction outside the United States where action would be required for
such purpose. Each Purchaser agrees not to cause any advertisement of the
Securities to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Securities, except in
any such case with Xxxxxxx, Sachs & Co.'s express written consent and then only
at its own risk and expense.
ANNEX II
Pursuant to Section 7(d) of the
Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:(1)
(a) We are independent auditors with respect to the Company
within the meaning of the Act and the applicable rules and regulations
thereunder adopted by the Securities and Exchange Commission ("SEC").
(b) In our opinion, the consolidated financial statements audited
by us and included in the Offering Circular comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Securities Exchange Act of 1934 (the "Exchange Act") and the
related rules and regulations adopted by the SEC.
(c) We have not audited any financial statements of the Company
as of any date or for any period subsequent to December 28, 2003. The
purpose (and therefore the scope) of our audit for the year ended December
28, 2003 was to enable us to express our opinion on the consolidated
financial statements as of December 28, 2003 and for the year then ended,
but not on the consolidated financial statements for any interim period
within that year.
(d) For purposes of this letter we have read the fiscal year 2003
and 2004 minutes of the meetings of the stockholders and the Board of
Directors of the Company as set forth in the minute books through March 1,
2004, officials of the Company having advised us that the minutes of all
such meetings through that date were set forth therein, and have carried
out other procedures to March 1, 2004 as follows:
(i) With respect to the period from December 29, 2003 to
March 1, 2004, we have:
a. read the unaudited consolidated financial statements
for the fiscal months of January and February of both
2004 and 2003 furnished to us by the Company, officials
of the Company having advised us that no such financial
statements as of any date or for any period subsequent
to March 1, 2004 were available; and
b. inquired of certain officials of the Company who have
responsibility for financial and accounting matters as
to whether the unaudited financial statements referred
to under a(1) are stated on a basis substantially
consistent with that of the audited consolidated
financial statements included in the Offering Circular.
The foregoing procedures do not constitute an audit conducted in
accordance with generally accepted auditing standards. Also, they would not
necessarily reveal
-----------------------------
(1) To be updated with revised draft of comfort letter.
matters of significance with respect to comments in the following
paragraphs. Accordingly, we make no representation as to the sufficiency of
the foregoing procedures for your purposes.
(e) Nothing came to our attention as a result of the foregoing
procedures that caused us to believe that:
(i) at March 1, 2004, there was any change in the
capital stock (except for activity under the Company's stock option
plans), increase in long-term liabilities or any decrease in net
current assets or increases in stockholders' deficit of the Company
as compared with amounts shown in the December 28, 2003 consolidated
balance sheet, included in the Offering Circular, or (ii) for the
period from December 29, 2003 to March 1, 2004, there were any
decreases, as compared with the corresponding period in the
preceding year, in sales or increases in operating loss or net loss.
(f) As mentioned under (d)(1)(a) above, officials of the Company
have advised us that no consolidated financial statements as of any date or
for any period subsequent to March 1, 2004 are available; accordingly, the
procedures carried out by us with respect to changes in financial statement
items after March 1, 2004 have, of necessity, been even more limited than
those with respect to the periods referred to in (d) above. We have
inquired of certain officials of the Company who have responsibility for
financial and accounting matters as to whether: (i) at March 1, 2004, there
was any change in the capital stock (except for activity under the
Company's stock option plans), increase in long-term debt or any decrease
in consolidated net current assets or increases in stockholders' deficit of
the Company as compared with amounts shown in the December 28, 2003
consolidated balance sheet, included in the Offering Circular, or (ii) for
the period from December 29, 2003 to March 1, 2004, there were any
decreases, as compared with the corresponding period in the preceding year,
in sales or increases in operating loss or net loss. On the basis of these
inquiries and our reading of the minutes as described in (d) above, nothing
came to our attention that caused us to believe that there was any such
increase or decrease.
(g) Our audits of the consolidated financial statements for the
periods referred to in the introductory paragraph of this letter were
comprised of audit tests and procedures deemed necessary for the purpose of
expressing an opinion on such consolidated financial statements taken as a
whole. For neither the periods referred to therein nor any other period did
we perform audit tests for the purpose of expressing an opinion on
individual balances of accounts or summaries of selected transactions such
as those enumerated above and, accordingly, we do not express an opinion
thereon.
(h) It should be understood that we make no representations as to
questions of legal interpretation or as to the sufficiency for your
purposes of the procedures enumerated in the preceding paragraph; also,
such procedures would not necessarily reveal any material misstatement of
the information identified in (g) above. Further, we have addressed
ourselves solely to the foregoing data as set forth in the Offering
Circular and in the documents incorporated by reference in the Offering
Circular as described in (g) above and make no representations as to the
adequacy of disclosure or as to whether any material facts have been
omitted.
(i) This letter is solely for the information of the addressees in
conducting and documenting their investigation of the affairs of the
Company in connection with the offering of securities covered by the
Offering Circular, and it is not to be used, circulated, quoted, or
otherwise referred to for any purpose, including but not limited to the
purchase or sale of securities, nor is it to be filed with or referred to
in whole or in part in the Offering Circular or any other document, except
that reference may be made to it in any list of closing documents
pertaining to the offering of securities covered by the Offering Circular.
