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EXHIBIT 4.1
FRESH FOODS, INC.
$115,000,000
10 3/4% SENIOR NOTES DUE 2006
NOTE PURCHASE AGREEMENT
June 4, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o First Union Capital Markets
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Fresh Foods, Inc., a North Carolina corporation, proposes to issue and
sell (the "Initial Placement") to First Union Capital Markets, a division of
Wheat First Securities, Inc., and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Initial
Purchasers"), $115,000,000 principal amount of its 10 3/4% Senior Notes Due 2006
(the "Notes"). The Notes will be unconditionally guaranteed (the "Guarantees"),
on a senior, unsecured basis, by each of the guarantors listed on the signature
pages hereto (collectively, the "Guarantors"). The Notes and the Guarantees are
to be issued under an indenture, to be dated the Closing Date (as defined below)
(the "Indenture"), among the Company (as defined below), the Guarantors and
State Street Bank and Trust Company, as trustee (the "Trustee"). The Initial
Placement is to occur concurrently with, and is conditioned upon, (a) the
acquisition by Fresh Foods of North Carolina, LLC, a wholly-owned subsidiary of
the Company, of Pierre (as defined below) pursuant to the Asset Purchase
Agreement, dated April 10, 1998 (the "Asset Purchase Agreement"), between such
subsidiary and ▇▇▇▇▇▇ Foods, Inc. (the "Acquisition") and (b) the initial
borrowing under a credit facility, to be executed on or prior to the date on
which the Notes are issued (the "Senior Credit Facility"), among the Company,
the Guarantors, the Lenders named therein and First Union Commercial
Corporation, as administrative agent. This Agreement, the registration rights
agreement, to be dated the Closing Date (the "Registration Rights Agreement"),
between the Initial Purchasers and the Company, the Notes, the Guarantees, the
Indenture, the Asset Purchase Agreement and the other documents to be entered
into in connection with the Acquisition, and the documents to be entered into in
connection with the Senior Credit Facility are hereinafter collectively referred
to as the "Transaction Documents." The Initial Placement, the offer and sale of
the Notes, the Acquisition and the Company's entering into the Senior Credit
Facility and the initial borrowing thereunder together with all of the other
transactions contemplated by the foregoing are hereinafter referred to as the
"Transactions." Unless the context otherwise requires, all references herein to
(x) the "Company" refers to Fresh Foods, Inc. and its subsidiaries upon the
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consummation of the Acquisition, (y) "Pierre" refers to the business and assets
of the Pierre Foods Division of ▇▇▇▇▇▇ Foods, Inc. to be acquired by Fresh Foods
pursuant to the Acquisition, and (z) "Fresh Foods" refers to Fresh Foods, Inc.
and its subsidiaries prior to the Acquisition.
The sale of the Notes to the Initial Purchasers will be made without
registration of the Notes under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon certain exemptions from the registration
requirements of the Securities Act. You have advised the Company that you will
offer and sell the Notes purchased by you hereunder in accordance with Section 4
hereof as soon as you deem advisable.
In connection with the sale of the Notes, the Company and the
Guarantors prepared preliminary offering memoranda, dated May 19, 1998 and June
1, 1998 (the "Preliminary Memoranda"), and a final offering memorandum, dated
June 4, 1998 (the "Final Memorandum"). The Preliminary Memoranda and the Final
Memorandum all set forth certain information concerning the Company, the
Guarantors, the Transaction Documents and the Transactions. The Company and the
Guarantors hereby confirm that each of them has authorized the use of the
Preliminary Memoranda and the Final Memoranda, and any amendment or supplement
thereto, in connection with the offer and sale of the Notes by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time (as defined below)
and are not meant to include any amendment or supplement, or any information
incorporated by reference therein, subsequent to the Execution Time.
As used herein, "Material Adverse Effect" means (a) a material adverse
effect upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of the Company and its Subsidiaries, taken as a
whole, whether before or after giving effect to the Transactions or (b) a
material impairment of the ability of the Company and its Subsidiaries, taken as
a whole, to execute, deliver or perform any of its obligations under, or the
material impairment of the ability of the Trustee and the holders of the Notes
(the "Holders") to enforce any obligations under, any of the Transaction
Documents. Other capitalized terms used and not defined herein have the meanings
ascribed to them in the Indenture.
1. Representations and Warranties. The Company and the Guarantors
jointly and severally represent and warrant to the Initial Purchasers the
following:
(a) The Preliminary Memoranda, at the dates thereof, did
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Final Memorandum,
at the date hereof, does not and, at the Closing Date, will not (and any
amendment or supplement thereto, at the date thereof and at the Closing Date,
will not) contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company and the Guarantors make no representation or warranty as to the
information contained in or omitted from the Preliminary Memoranda or the Final
Memorandum, or any amendment or supplement thereto, in reliance upon and in
conformity with
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information relating to either of the Initial Purchasers furnished to the
Company in writing by or on behalf of either of the Initial Purchasers expressly
for use therein.
(b) Except as disclosed in the Preliminary Memoranda or
the Final Memorandum, no holder of securities of the Company or the Guarantors
will be entitled to have such securities registered under any registration
statement required to be filed by the Company or the Guarantors.
(c) None of the Company, the Guarantors or any of their
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on any of their behalf (other than the
Initial Purchasers or any of its Affiliates, as to whom the Company and the
Guarantors make no representation or warranty) has, directly or indirectly:
(i) made offers or sales of any security, or
solicited offers to buy any security, which is or will be integrated with the
sale of the Notes or the Guarantees in a manner that would require their
registration under the Securities Act;
(ii) engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Notes or the Guarantees;
(iii) taken any action designed to cause or result
in, or that has constituted or that might reasonably be expected to constitute,
stabilization or manipulation of the price of any security of the Company or the
Guarantors or facilitate the sale or resale of the Notes;
(iv) taken any action designed to facilitate the
sale or resale of the Notes;
(v) except as disclosed in the Preliminary
Memoranda or the Final Memorandum, paid or agreed to pay to any person any
compensation for soliciting another person to purchase any securities of the
Company or the Guarantors;
(vi) engaged in any directed selling efforts (as
that term is defined in Regulation S under the Securities Act ("Regulation S"))
with respect to the Notes or the Guarantees, and each of the Company and its
Affiliates and any person acting on its or their behalf (other than the initial
Purchasers or any of their Affiliates as to which no representation is made) has
complied with the offering restrictions requirements of Regulation S.
(d) The Notes satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(e) Assuming the accuracy of your representations in
Section 4 hereof and your compliance with your convenants set forth therein, it
is not necessary in connection with the offer, sale and delivery of the Notes in
the manner contemplated by this Agreement and the Final
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Memorandum to register the Notes or the Guarantees under the Securities Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(f) Each of the Company and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each of the Company and its Subsidiaries has the
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted and is duly qualified
to do business and is in good standing under the laws of all jurisdictions in
which it is doing business, except where failure to be so qualified or be in
good standing, individually or in the aggregate, has not had and will not have a
Material Adverse Effect.
(g) All of the outstanding shares of Capital Stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. Exhibit A hereto lists (i) each wholly owned Subsidiary of the
Company (including each Guarantor) along with its jurisdiction of organization;
and (ii) each other non-wholly owned Subsidiary of the Company along with its
jurisdiction of organization, the title and amount of Capital Stock outstanding
and the amount of all such Capital Stock owned by the Company (or any of its
Subsidiaries) expressed both in terms of the number of shares and as a
percentage of all Capital Stock in such shares' class outstanding. Each
Subsidiary of the Company does not and will not on the Closing Date have
outstanding any (i) securities convertible or exchangeable for its Capital
Stock, (ii) rights to subscribe for or to purchase any of its Capital Stock or
(iii) options providing for the purchase of, agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to its Capital Stock. All of the Capital Stock of each
wholly owned Subsidiary and the Capital Stock owned by the Company of each
non-wholly owned Subsidiary shown on Schedule A is beneficially owned by the
Company, directly or indirectly, free and clear of all liens other than liens
granted to secure the loan contemplated by the Senior Credit Facility. The
Company does not, directly or indirectly, have any Subsidiaries that are not
Guarantors.
(h) Each of the Company and the Guarantors has the power
and requisite authority to execute, deliver and carry out the terms and
provisions of the Transaction Documents and has taken all necessary action to
authorize the execution, delivery and performance of the Transaction Documents
and the Exchange Notes.
(i) Each of the Transaction Documents and each other
document or instrument to be delivered in connection therewith has been, or as
of the Closing Date will have been, duly authorized by all necessary corporate
action of the Company and the Guarantors. This Agreement has been duly executed
and delivered by the Company and each Guarantor; each of the other Transaction
Documents to be executed and delivered on or prior to the date hereof has been
duly executed and delivered by each of the Company and the Guarantors that are a
party thereto; and each of the Transaction Documents to be executed and
delivered after the date hereof will be duly executed and delivered by the
Company and each of the Guarantors that are a party thereto. This Agreement is,
and such other Transaction Documents and other documents and instruments to
which the Company and each of the Guarantors is a party are or will be, the
legal, valid and binding obligations of the Company and each of the Guarantors,
enforceable in accordance with their respective terms, except to the extent that
the enforceability thereof may be
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limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(j) The execution, delivery and performance by the
Company of the Transaction Documents do not and on the Closing Date will not (i)
violate any statute, law, ordinance, regulation, rule, order, judgment, writ,
injunction or decree of any state, commonwealth, nation, territory, possession,
province, county, parish, township, village, municipality or other jurisdiction
(collectively, the "Laws") applicable to any of the Company and the Guarantors,
or any judgment, order, writ or decree of any government, any arbitration panel,
any court or any governmental department, commission, board, bureau, agency,
authority or instrumentality of any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village or municipality,
whether now or hereafter constituted or existing ("Tribunal") binding on any of
them, (ii) conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under the articles of incorporation, bylaws
or other organizational documents of the Company or any Guarantor, (iii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound
("Contracts"), (iv) result in or require the creation or imposition of any lien
upon any of the properties or assets of any of the Company and the Guarantors
(other than any liens created under the Senior Credit Facility), (v) require any
approval of stockholders or (vi) require any approval or consent of any person
under any Contracts, except, with respect to clauses (iii), (iv) and (vi), for
any conflicts, breaches, defaults, liens, approvals and consents that would not
result in a Material Adverse Effect.
(k) No consent, approval, authorization or order of any
Tribunal or other person is required in connection with the execution and
delivery by the Company or the Guarantors of the Transaction Documents or any
other document or instrument to be delivered in connection with the Transactions
or the consummation of the transactions contemplated hereby or thereby, except
for consents, approvals, authorizations and orders that have heretofore been
obtained.
(l) The audited financial statements (including the notes
thereto) of each of Fresh Foods and Pierre included in the Final Memorandum
comply as to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Securities Act and fairly present
in all material respects the consolidated financial position of each of the
Fresh Food and Pierre and the results of operations and, with respect to Fresh
Foods only, cash flows thereof as of the dates and for the periods therein
specified. Such financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved. Since the date of the most recent financial
statements included in the Final Memorandum, except as described therein, in the
Notes thereto or in the Final Memorandum, (i) neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations, direct or contingent,
or entered into or agreed to enter into any transactions or Contracts not in the
ordinary course of business which liabilities, obligations, transactions or
Contracts would, individually or in the aggregate, have a
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Material Adverse Effect, (ii) the Company has not purchased any of its
outstanding Capital Stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its Capital Stock, (iii) there has not been any
material change in the long-term indebtedness of the Company or any of its
Subsidiaries and (iv) none of the Assets of the Company have materially
diminished in value. The unaudited pro forma financial statements of the Company
included in the Final Memorandum comply as to form in all material respects with
the requirements of the Securities Act; the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such pro forma
statements; the assumptions described in the notes to such pro forma statements
provide a reasonable basis for presenting the significant effects of the
transactions contemplated therein; and such pro forma adjustments give
appropriate effect to those adjustments, in each case in accordance with
Regulation S-X under the Securities Act ("Regulation S-X").
(m) The Company and each of its Subsidiaries maintains a
system 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 GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(n) The Company is not now, and after giving effect to
the consummation of the Transactions will not be, (i) insolvent, (ii) left with
unreasonably small capital with which to engage in its anticipated businesses or
(iii) incurring debts beyond its ability to pay such debts as they become due.
The Company is not in liquidation, administration or receivership nor has any
petition been presented for the winding-up of the Company.
(o) The Company and each of its Subsidiaries has, and
after consummation of the Transactions will have, good, sufficient and legal
title to all their respective properties and assets, and all properties held
under lease by any of them, are, and immediately after the consummation of the
Transactions will be, held under valid, subsisting and enforceable leases, and
none of the Company or any of its Subsidiaries and, to the knowledge of the
Company, any other party thereto, is in default under any lease, except in each
case for such defects or defaults that, individually or in the aggregate, would
not have a Material Adverse Effect. All such properties and assets owned or
leased are so owned or leased free and clear of liens other than liens permitted
under the definition "Permitted Liens" set forth in the Final Memorandum. None
of the material assets of the Company or any of its Subsidiaries is subject to
any restriction that would prevent continuation of the use currently made
thereof or which would materially adversely effect the value thereof.
(p) Both before and after giving effect to the
Transactions, none of the Company or any of its Subsidiaries is (i) in violation
of its charter, by-laws or other organizational documents, (ii) in violation of
any Law or (iii) in breach of or default under (nor has any event occurred
which, with notice or the passage of time or both, would constitute a breach of
or default under) or in violation of any of the terms or provisions of any
Contract,
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except for any such breach, default, violation or event that would, individually
or in the aggregate, not have a Material Adverse Effect.
(q) There is no litigation pending or, to the best
knowledge of the Company after due investigation, threatened, by, against, or
which may relate to or affect (a) any benefit plan or any fiduciary or
administrator thereof, (b) the Transactions or (c) the Company or any of its
Subsidiaries, which individually or in the aggregate, would have a Material
Adverse Effect. There are no outstanding injunctions or restraining orders
prohibiting consummation of any of the Transactions. Neither the Company nor any
of its Subsidiaries is in default with respect to any judgment, order, writ,
injunction or decree of any Tribunal, and there are no unsatisfied judgments
against the Company or any of its Subsidiaries or their respective businesses or
properties. None of the Company or any of its Subsidiaries has been advised that
there is a reasonable likelihood of an adverse determination of any litigation,
which adverse determination would have a Material Adverse Effect.
(r) The proceeds from the issuance and sale of the Notes
will be used solely for the purposes specified in the Final Memorandum. None of
such proceeds will be used for the purpose of purchasing or carrying any Margin
Stock within the meanings of the applicable provisions of Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System, or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry Margin Stock or for any other purpose that might cause any of the Notes
to be considered a "purpose credit" within the meaning of the applicable
provisions of Regulation G, T, U or X.
(s) All material Tax Returns required to be filed by the
Company and each of its Subsidiaries in any jurisdiction have been filed, and
all material Taxes (whether or not actually shown on such Tax Returns) for which
any of them is directly or indirectly liable or to which any of their respective
properties or assets are subject have been paid other than Taxes being contested
in good faith and for which adequate reserves have been established in
accordance with GAAP. All such Tax Returns are true, correct and complete in all
material respects and accurately set forth all items to the extent required to
be reflected or included in such Tax Returns by applicable federal, state, local
or foreign Tax Laws, regulations or rules. There is no material proposed Tax
assessment against the Company or any of its Subsidiaries, and, to the best
knowledge of the Company, there is no basis for such assessment, except for
contested claims.
As used herein, the following terms shall have the respected meanings
ascribed to them below:
"Tax Return" means a report, return or other information (including any
amendments) required to be supplied to a governmental entity with respect to
Taxes including, where permitted or required, combined or consolidated returns
for any group of entities that includes the Company or any of its Subsidiaries.
"Taxes" means all taxes however denominated, including any interest or
penalties that may become payable in respect thereof, imposed by any federal,
state, local or foreign
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government or any agency or political subdivision of any such government, which
taxes shall include all income taxes (including, but not limited to, United
States federal income taxes and state income taxes), payroll and employee
withholding taxes, unemployment insurance, social security, sales and use taxes,
excise taxes, environmental, franchise taxes, gross receipts taxes, occupation
taxes, real and personal property taxes, stamp taxes, transfer taxes,
withholding taxes, workers' compensation, and other obligations of the same or a
similar nature, whether arising before, on or after the Closing Date.
(t) Both before and after giving effect to the
Transactions, no ERISA Events have occurred or are reasonably expected to occur
which, individually or in the aggregate, resulted in or might reasonably be
expected to result in a liability of the Company or any of its Subsidiaries or
any of their respective ERISA Affiliates which would have a Material Adverse
Effect. In accordance with the most recent actuarial valuations, the Amount of
Unfunded Benefit Liabilities for all Pension Plans (excluding for purposes of
such computation any Pension Plans which have a negative Amount of Unfunded
Benefit Liabilities) is not an amount which would reasonably be expected to have
a Material Adverse Effect.
As used herein, the following terms shall have the respective meaning
ascribed to each below:
"Amount of Unfunded Benefit Liability" means, with respect to any
Pension Plan, (i) if set forth on the most recent actuarial valuation report
with respect to such Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise, the excess of
(a) the greater of the current liability (as defined in Section 412(l)(7) of the
Internal Revenue Code) or the actuarial present value of the accrued benefits
with respect to such Pension Plan over (b) the market value of the assets of
such Pension Plan.
"Employee Pension Benefit Plan" means any "employee pension benefit
plan" as defined in Section 3(2) of ERISA (i) which is, or, at any time within
the five calendar years immediately preceding the date hereof, was at any time,
sponsored, maintained or contributed to by the Company or its Subsidiaries or
any of their respective ERISA Affiliates or (ii) with respect to which any of
the Company or its Subsidiaries retains any liability, including any potential
joint and several liability as a result of an affiliation with an ERISA
Affiliate or a party that would be an ERISA Affiliate except for the fact the
affiliation ceased more than five calendar years prior to the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder and any successor statute, regulations and rulings.
"ERISA Affiliate," as applied to any person, means (i) any corporation
which is, or was at any time within the five calendar years immediately
preceding the date hereof, a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that person
is, or was at any time within the five calendar years immediately preceding the
date hereof, a member; (ii) any trade or business (whether or not incorporated)
which is, or was at any time within the five calendar years immediately
preceding the date
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hereof, a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Internal Revenue Code of which that person
is, or was at any time within the five calendar years immediately preceding the
date hereof, a member; and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Internal Revenue Code of
which that person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is, or was at any time within the five
calendar years immediately preceding the date hereof, a member.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived) or the failure to make any required
contribution within 30 days of its due date with respect to any Multiemployer
Plan; (iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041 (a) (2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by the Company or any of its Subsidiaries or any of their respective ERISA
Affiliates from any Multiple Employer Plan or the termination of any such
Multiple Employer Plan resulting in liability pursuant to Sections 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on the Company or any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal by the Company
or any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability therefor,
or the receipt by the Company or any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could reasonably be expected
to give rise to the imposition on the Company or any of its Subsidiaries or any
of their respective ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 406, 409,
502(i) or 502(1) of ERISA in respect of any Employee Pension Benefit Plan; (ix)
receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Pension Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan or Employee Pension Benefit Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(x) the imposition of a lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor code or statute.
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"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any of the Company, its Subsidiaries or any of
their respective ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Company, its Subsidiaries or any of their respective ERISA Affiliates and at
least one person other than employees of the Company, its Subsidiaries and their
respective ERISA Affiliates or (ii) was so maintained and in respect of which
such Company, Subsidiaries or ERISA Affiliates could have liability under
Section 4064 or Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Pension Plan" means a Single Employer Plan or Multiple Employer Plan.
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Single Employer Plan" means a "single-employer plan," as defined in
Section 4001 (a)(15) of ERISA, that (i) is maintained for employees of the
Company, any of its Subsidiaries or any of their ERISA Affiliates and no person
other than employees of the Company, any of its Subsidiaries or any of their
ERISA Affiliates or (ii) was so maintained and in respect of which such Company,
Subsidiaries or ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
(u) The Company and each of its Subsidiaries is in
compliance with all Laws, except where the failure to comply, individually or in
the aggregate, would not have a Material Adverse Effect.
(v) None of the Company or any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or the Investment Company Act of 1940 (as any of the
preceding acts have been amended).
(w) The Company and its Subsidiaries own or are licensed
to use all patents, trademarks, tradenames, copyrights, technology, know-how and
processes used in or necessary for the conduct of the business of the Company as
currently conducted ("Intellectual Property"). To the Company's knowledge, no
material claim has been asserted by any person with respect to the use of any
such Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. To the Company's knowledge, the
use of such Intellectual Property by the Company or any of its Subsidiaries does
not infringe on the rights of any person. The consummation of the Transactions
will not in any material manner or to any material extent impair the ownership
of (or the license to use, as the case may be) of such intellectual property by
the Company or any of its Subsidiaries.
(x) Both before and after giving effect to the
Transactions:
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(i) the operations of the Company and each of
its Subsidiaries comply with all Environmental Laws except for any such
noncompliance which would not reasonably be expected to have a Material Adverse
Effect;
(ii) each of the Company and its Subsidiaries has
obtained all Permits under Environmental Laws necessary to their respective
operations, and all such Permits are being maintained in good standing, and each
of the Company and its Subsidiaries is in compliance with all material terms and
conditions of such Permits except for any such failure to obtain, maintain or
comply which would not reasonably be expected to have a Material Adverse Effect;
(iii) none of the Company or its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be liable to
any person under any Environmental Law except as would not reasonably be
expected to have a Material Adverse Effect or (b) any letter or request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9604) or comparable Environmental
Laws regarding any matter which could reasonably be expected to result in a
Material Adverse Effect, and, to the best of the Company's knowledge, none of
the Company or its Subsidiaries is or will be involved in any investigation,
response or corrective action relating to or in connection with any Hazardous
Materials at any Facility or at any other location except for such of the
foregoing which would not reasonably be expected to have Material Adverse
Effect;
(iv) none of the Company or its Subsidiaries is
subject to any judicial or administrative proceeding alleging the violation of
or liability under any Environmental Laws which if adversely determined could
reasonably be expected to have a Material Adverse Effect;
(v) none of the Company or its Subsidiaries or
any of their respective Facilities or operations is subject to any outstanding
written order or agreement with any governmental authority or private party
relating to (A) any actual or potential violation of or liability under
Environmental Laws or (B) any Environmental Claims except for such of the
foregoing which would not reasonably be expected to have a Material Adverse
Effect;
(vi) none of the Company or its Subsidiaries has
any contingent liability in connection with any Release or threatened Release of
any Hazardous Materials by any of the Company or its Subsidiaries except for
such of the foregoing which would not reasonably be expected to have a Material
Adverse Effect;
(vii) no Hazardous Materials exist on, under or
about any Facility in a manner that would reasonably be expected to give rise to
an Environmental Claim having a Material Adverse Effect, and none of the Company
or its Subsidiaries has filed any notice or report of a Release of any Hazardous
Materials that would reasonably be expected to give rise to an Environmental
Claim having a Material Adverse Effect;
(viii) none of the Company or its Subsidiaries or,
to the best of the Company's knowledge, any of their respective predecessors has
disposed of any Hazardous
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Materials in a manner that would reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect;
(ix) to the best of the Company's knowledge, no
underground storage tanks or surface impoundments are on or at any Facility that
could be reasonably expected to give rise to an Environmental Claim having a
Material Adverse Effect; and
(x) no lien in favor of any person relating to or in
connection with any Environmental Claim has been filed or has been attached
to any Facility or other assets of the Company or any of its Subsidiaries except
for any such lien which would not reasonably be expected to have a Material
Adverse Effect.
As used herein, the following terms shall have the respective meanings
ascribed to them below:
"Environmental Claims" means any allegation, notice of violation,
claim, demand, abatement order or other order or direction (conditional or
otherwise) by any governmental authority or any person for any response or
corrective action, any damage, including, without limitation, personal injury,
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in each
case arising under any Environmental Law, including without limitation, relating
to, resulting from or in connection with Hazardous Materials and relating to the
Company, any of its Subsidiaries or any of their respective Facilities or
predecessors in interest.
"Environmental Laws" means the common law and all statutes, ordinances,
orders, rules, regulations, requirements, judgments, plans, policies or decrees
relating to (i) pollution, protection, preservation, cleanup or reclamation of
the environment, natural resources, human, plant or animal health or welfare,
(ii) the Release or threatened Release of Hazardous Materials, or (iii)
manufacture, processing, treatment, handling, recycling, generation, use,
storage, transportation or disposal of Hazardous Materials including, without
limitation, investigation, study, assessment, testing, monitoring, containment,
removal, remediation, or clean-up of any such Release, each as in effect as of
the date of determination.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by the Company, its
Subsidiaries or any of their respective predecessors in interest.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous waste,"
"restricted hazardous waste," "infectious waste," "toxic substances" or any
other formulations intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any
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oil, petroleum, petroleum fraction or petroleum derived substance; (iii) any
flammable substances or explosives; (iv) any radioactive materials; (v) asbestos
in any form; (vi) urea formaldehyde foam insulation; (vii) electrical equipment
which contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; (viii) pesticides; and (ix) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or which may or could pose a hazard
to human health or safety or the environment.
"Permits" has the meaning ascribed to it in Section 1(y) below.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the environment (including,
without limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), or onto or out of
any Facility, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
(y) The Company and its Subsidiaries have, and
immediately after the consummation of the Transactions will have, such
certificates, permits, licenses, franchises, consents, approvals, authorizations
and clearances ("Permits"), and will be after giving effect to the Transactions
in compliance in all material respects with all Laws as are necessary to own,
lease or operate their respective properties and to conduct their businesses in
the manner as presently conducted and to be conducted immediately after the
consummation of the Transactions except where the failure to have such Permits
or to comply with such Laws would not, individually or in the aggregate, have a
Material Adverse Effect, and all such Permits are valid and in full force and
effect and will be valid and in full force and effect immediately upon
consummation of the Transactions. The Company and its Subsidiaries are, and
immediately after the consummation of the Transactions will be, in compliance in
all material respects with their respective obligations under such Permits and
no event has occurred that allows, or after notice or lapse of time would allow,
revocation or termination of such Permits except for any such revocation or
termination as would not, individually or in the aggregate, have a Material
Adverse Effect.
(z) The Company and its Subsidiaries carry or are
entitled to the benefits of insurance (including self-insurance) in such amounts
and covering such risks as is generally maintained by companies of established
repute engaged in the same or similar businesses, and all such insurance is (and
will be immediately after the consummation of the Transactions) in full force
and effect, except where the failure to carry such insurance or be entitled to
the benefits of such insurance does not, individually or in the aggregate, have
a Material Adverse Effect.
(aa) Except as disclosed in the Preliminary Memoranda or
the Final Memorandum, no labor disturbance by the employees of the Company or
its Subsidiaries exists or, to the best knowledge of the Company, is threatened
and the Company is not aware of any existing or imminent labor disturbance by
the employees of the Company's or its Subsidiaries' principal suppliers,
manufacturers or customers that could, individually or in the aggregate, have a
Material Adverse Effect.
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(bb) Except for the fees and expenses payable to the
Initial Purchasers, which will be paid by the Company on the Closing Date, the
Company did not employ any investment banker, broker, finder, consultant,
intermediary or other person in connection with the transactions contemplated by
this Agreement who would be entitled to any investment banking, brokerage,
finder's or other fees or commissions in connection with this Agreement or the
transactions contemplated hereby.
Any certificate signed by any officer of the Company or of any of the
Guarantors and delivered to the Initial Purchasers or its counsel shall be
deemed to be a representation and warranty by the Company or of the Guarantor,
as the case may be, to the Initial Purchasers as to the matters covered thereby.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Initial Purchasers, and each of the Initial Purchase
agrees to purchase from the Company, severally and not jointly, at a purchase
price equal to 97.25% of the principal amount thereof, Notes in the respective
principal amount set forth opposite its name on Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Notes
shall be made at 10:00 a.m., New York City time, on June 9, 1998, which date and
time may be postponed by agreement between the Initial Purchasers and the
Company (such date and time of delivery and payment for the Notes being herein
called the "Closing Date"). Delivery of the Notes shall be made to the Initial
Purchasers against payment by the Initial Purchasers of the purchase price
thereof to or upon the order of the Company by intrabank transfer payable in
same day funds or such other manner of payment as may be agreed by the Company
and the Initial Purchasers. Delivery of the Notes shall be made at such location
as the Initial Purchasers shall reasonably designate at least one Business Day
in advance of the Closing Date and payment for the Notes shall be made at the
office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Certificates for the Notes shall be
registered in such names and in such denominations as the Initial Purchasers may
request not less than two full Business Days in advance of the Closing Date.
4. Offering of Notes. Each of the Initial Purchasers, severally
and not jointly, represents and warrants to and agrees with the Company and the
Guarantors that:
(a) It has not offered or sold, and will not offer or
sell, any Notes except (i) within the United States to those persons it
reasonably believes to be qualified institutional buyers (as defined in Rule
144A under the Securities Act) ("QIBs"), and (ii) outside the United States to
persons other than U.S. persons in reliance upon Regulation S under the
Securities Act. In connection with each sale pursuant to clause (i) above, the
Initial Purchasers has taken or will take reasonable steps to ensure that the
purchaser of such Notes is aware that such sale is being made in reliance on
Rule 144A.
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(b) Neither it nor any person acting on its behalf has
made or will make offers or sales of the Notes by means of any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act).
(c) It is an "accredited investor" (as defined in Rule
501 (a)(1), (2), (3) or (7) under the Securities Act) with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Notes.
5. Agreements. The Company and its Subsidiaries agree with the
Initial Purchasers that:
(a) The Company will furnish to the Initial Purchasers
and to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. ("Counsel for the Initial
Purchasers"), without charge, during the period referred to in paragraph (c)
below, as many copies of the Final Memorandum and any amendments and supplements
thereto as they may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering of the
Notes and will reimburse the Initial Purchasers for payment of the required
PORTAL filing fee.
(b) The Company will not amend or supplement the Final
Memorandum prior to the completion of the distribution of the Notes by the
Initial Purchasers, without the prior written consent of the Initial Purchasers.
(c) If at any time prior to the completion of the sale of
the Notes acquired by the Initial Purchasers pursuant to this Agreement (as
determined by the Initial Purchasers), any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company will promptly notify
the Initial Purchasers of the same and, subject to the requirements of paragraph
(b) of this Section 5, will prepare and provide to the Initial Purchasers
pursuant to paragraph (a) of this Section 5 an amendment or supplement that will
correct such statement or omission or effect such compliance.
(d) The Company will arrange for the qualification of the
Notes and the Guarantees for sale by the Initial Purchasers under the laws of
such jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect so long as required for the sale of the Notes and
the Guarantees by the Initial Purchasers; provided, however, that none of the
Company or the Guarantors will be required to qualify generally to do business
in any jurisdiction in which any of them is not then so qualified, to file any
general consent to service of process or to take any action which would subject
any of them to general service of process or to taxation in any such
jurisdiction where it is not then so subject. The Company will promptly advise
the Initial Purchasers of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes and the Guarantees
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
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(e) The Company, whenever any of the Company and its
Subsidiaries publishes or makes available to the public (by filing with any
regulatory authority or securities exchange or by publishing a press release or
otherwise) any information that could reasonably be expected to be material in
the context of the issue of Notes under this Agreement, shall promptly notify
the Initial Purchasers as to the nature of such information or event. The
Company will likewise notify the Initial Purchasers of (i) any decrease in the
rating of the Notes or any other debt securities of the Company or its
Subsidiaries by any nationally recognized statistical rating organization (as
defined in Rule 436(g)(2) under the Securities Act) or (ii) any notice given of
any intended or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the possible change, as
soon as the Company becomes aware of any such decrease or notice. So long as the
Company has any obligations with respect to the Notes or the Holders, the
Company will also deliver to the Initial Purchasers, as soon as available and
without request, copies of all documents it files with or furnishes to the
Securities and Exchange Commission.
(f) The Company will not, and will not permit any of its
Affiliates to, resell any Notes that have been acquired by any of them, other
than pursuant to an effective registration statement under the Securities Act.
(g) Except as contemplated by the Registration Rights
Agreement or otherwise disclosed in the Final Memorandum, none of the Company or
any of its Affiliates, nor any person acting on its or their behalf (other than
the Initial Purchasers or any of their Affiliates, as to whom the Company and
its Subsidiaries make no agreement) will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Notes under the
Securities Act.
(h) None of the Company or any of its Affiliates, nor any
person acting on its or their behalf (other than the Initial Purchasers or any
of its Affiliates, as to whom the Company and its Subsidiaries make no
agreement) will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Notes.
(i) So long as any of the Notes are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, if
the Company ceases to be subject to the reporting requirements of Sections 13
and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), it will
provide to each holder of the Notes and to each prospective purchaser (as
designated by such holder) of the Notes, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of the Notes.
(j) The Company will cooperate with the Initial
Purchasers and use their best efforts to (i) permit the Notes to be designated
PORTAL securities in accordance with the rules and regulations of the NASD
relating to trading in the Private Offerings, Resale and Trading through
Automated Linkages market ("PORTAL") and (ii) permit the Notes to be eligible
for
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clearance and settlement as described under "Book Entry; Delivery and Form" in
the Final Memorandum.
(k) The Company will apply the net proceeds from the sale
of the Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(l) The Company and its Subsidiaries will conduct their
operations in a manner that will not subject the Company or any of its
Subsidiaries to registration as an investment company under the Investment
Company Act.
(m) Each Note will bear a legend substantially to the
following effect until such legend shall no longer be necessary or advisable
because the Notes are no longer subject to the restrictions on transfer
described therein:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION; (2)
AGREES THAT IT WILL NOT WITHIN 2 YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF
BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE
WITHIN TWO YEARS AFTER ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER
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INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Notes shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the Guarantors contained herein at the date and time that this Agreement is
executed and delivered by the parties hereto (the "Execution Time") and on the
Closing Date, to the accuracy of the statements of the Company and the
Guarantors made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Guarantors of their obligations hereunder and
to the following additional conditions:
(a) The Company and the Guarantors shall have furnished
to the Initial Purchasers the opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
("Counsel for the Company"), dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers to the effect set forth in Exhibit B
hereto.
(b) The Initial Purchasers shall have received from
Counsel for the Initial Purchasers such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Notes and other related
matters as the Initial Purchasers may reasonably require, and the Company and
the Guarantors shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such matters.
(c) The Company and each of the Guarantors shall have
furnished to the Initial Purchasers a certificate dated the Closing Date, signed
on behalf of each of the Company and the Guarantors by any two of their Chairman
of the Board, Chief Executive Officer, President and Chief Financial Officer to
the effect that the signer of such certificate has carefully examined the Final
Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and that:
(i) the representations and warranties of the
Company and the Guarantors contained in this Agreement are true and correct in
all respects on and as of the Closing Date with the same effect as if made on
the Closing Date, and the Company and the Guarantors have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no change or
development or event involving a prospective change constituting a Material
Adverse Effect.
(d) At the Execution Time and at the Closing Date,
Deloitte & Touche, LLP shall have furnished to the Initial Purchasers a letter
or letters, dated respectively as of the
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Execution Time and as of the Closing Date, in form and substance satisfactory to
the Initial Purchasers, confirming that they are independent public accountants
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants (the "AICPA") and stating in
effect that:
(i) in their opinion, the audited consolidated
financial statements of Fresh Foods and its Subsidiaries included in the Final
Memorandum comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder;
(ii) they have (a) read the unaudited financial
statements of Fresh Foods for February 28, 1998 through March 27, 1998 and
February 29, 1997 through March 28, 1997 prepared by Fresh Foods, (b) read the
minutes of the meetings of the stockholders, directors and committees of the
board of directors of Fresh Foods made available to them by Fresh Foods and (c)
made inquiries of certain officials of Fresh Foods who have responsibility for
financial and accounting matters of Fresh Foods whether the financial statements
referred to in clause (a) above are stated on a basis substantially consistent
with that of the audited combined financial statements included in the Final
Memorandum;
(iii) they have inquired of certain officials of
Fresh Foods who have responsibility for financial and accounting matters whether
(A) at any specified date not more than three Business Days prior to the date of
the letter, there was any change in the capital stock, increase in long-term
debt or any decrease in consolidated total assets or shareholders' equity of
Fresh Foods as compared with amounts shown on the February 27, 1998 audited
balance sheet included in the Final Memorandum or (B) for the period from
February 28, 1998 to any specified date not more than three Business Days prior
to the date of the letter, there were any decreases as compared with the
corresponding period in the preceding year, in revenues, operating income,
earnings before income taxes and extraordinary item or net earnings;
(iv) on the basis of the foregoing, nothing came
to their attention that caused them to believe that there were any such changes,
increases or decreases described in clause (iv), except in all instances for
changes, increases or decreases that the Offering Memorandum discloses have
occurred or may occur;
(v) they have performed certain other specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general accounting records
of Fresh Foods) set forth in the Final Memorandum, including without limitation
the information set forth on the cover page and under the captions "Offering
Memorandum Summary," "Risk Factors," "The Acquisition," "Use of Proceeds,"
"Capitalization of the Company," "Unaudited Pro Forma Combined Financial
Information of the Company," "Selected Historical Financial Information of Fresh
Foods," "Management's Discussion and Analysis of Financial Condition and Results
of Operations," "Business," "Certain Relationships and Related Party
Transactions," "Management," "Principal Stockholders" and "Description of the
Notes" in the Final Memorandum agrees with the accounting records of Fresh
Foods, excluding any questions of legal interpretation;
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(vi) as to pro forma financial information;
(A) they have read the unaudited pro
forma combined financial data included in the Final Memorandum;
(B) they have inquired of certain
officials of Fresh Foods and Pierre who have responsibility for financial and
accounting matters as to the basis for their determination of the pro forma
adjustments;
(C) they have compared the estimated
financial information included in the unaudited pro forma balance sheet and the
unaudited pro forma income statement in the Final Memorandum with the historical
information for Fresh Foods and Pierre and found them to be in agreement;
(D) they have proved the arithmetic
accuracy of the application of the pro forma adjustments to the historical
financial amounts in the unaudited pro forma combined consolidated financial
data, and as a result of the procedures specified in (A), (B) and (C), nothing
came to their attention that caused them to believe that the unaudited pro forma
financial statements included in the Final Memorandum do not comply as to form
in all material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of the unaudited
pro forma combined consolidated financial data included in the Final Memorandum;
and
(E) they have performed certain other
specified procedures as a result of which they determined that certain pro forma
information of an accounting, financial, or statistical nature set forth in the
Final Memorandum, including without limitation the information set forth under
the captions "Offering Memorandum Summary," "Risk Factors," "Capitalization of
the Company" and "Unaudited Pro Forma Combined Financial Information of the
Company" in the Final Memorandum, agrees to or can be derived from the pro forma
financial data of the Company or the analysis completed in the preparation of
such pro forma financial data, excluding any questions of legal interpretation.
All references in this Section 6(d) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the date of the letter
or letters.
(e) At the Execution Time and at the Closing Date,
Deloitte & Touche, LLP shall have furnished to the Initial Purchasers a letter
or letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Initial Purchasers, confirming
that they are independent public accountants within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of Certified Public
Accountants (the "AICPA") and stating in effect that:
(i) in their opinion, the audited consolidated
financial statements of Pierre included in the Final Memorandum comply as to
form in all material respects with the
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applicable accounting requirements of the Act and the related published rules
and regulations thereunder;
(ii) they have (a) read the unaudited financial
statements of Pierre as at and for the five months ended February 28, 1998 and
March 1, 1997 and the unaudited statement of revenues and expenses of Pierre for
the twelve months ended February 28, 1998, in each case prepared by management
of Pierre, (b) made inquiries of certain officials of Pierre who have
responsibility for financial and accounting matters of Pierre whether the
financial statements referred to in clause (a) above are stated on a basis
substantially consistent with that of the audited financial statements of Pierre
included in the Final Memorandum, and (c) conducted a limited review in
accordance with the standards established by the AICPA under Statement on
Auditing Standards No. 71 of the unaudited interim financial statements;
(iii) nothing came to their attention as a result
of the procedures performed in (a), (b) and (c) above that caused them to
believe that, (1) any material modifications should be made to the unaudited
financial statements of Pierre described above included in the Final Memorandum
for them to be in conformity with generally accepted accounting principles or
(2) the unaudited financial statements of Pierre described above included in the
Final Memorandum are not stated on a basis substantially consistent with the
audited financial statements of Pierre included in the Final Memorandum;
(iv) they have inquired of certain officials of
Pierre who have responsibility for financial and accounting matters whether (a)
at any specified date not more than three Business Days prior to the date of the
letter, there was any increase in long-term debt or any decrease in total
current assets or net assets of Pierre as compared with amounts shown on the
February 28, 1998 unaudited balance sheet of Pierre included in the Final
Memorandum or (b) for the period from March 1, 1998 to any specified date not
more than three Business Days prior to the date of the letter, there were any
decreases as compared with the corresponding period in the preceding year, in
revenues or excess of revenues over expenses before income taxes. On the basis
of these inquires, nothing came to their attention that caused them to believe
that there was any such change, increases or decrease, except in all instances
for changes, increase, or decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by Fresh Foods and management of
Pierre as to the significance thereof unless said explanation is not deemed
necessary by the Initial Purchaser;
(v) they have performed certain other specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general accounting records
of Pierre) set forth in the Final Memorandum, including without limitation the
information set forth under the captions "Offering Memorandum Summary," "Risk
Factors," "The Acquisition," "Use of Proceeds," "Capitalization of the Company,"
"Unaudited Pro Forma Combined Financial Data of the Company," "Selected
Historical Financial Information of Pierre," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business," "Certain
Relationships and Related Party Transactions," "Management," "Principal
Stockholders" and "Description of the Notes" in the Final
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Memorandum agrees with the accounting records of the Company, excluding any
questions of legal interpretation;
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Final Memorandum, there shall not
have been (i) any change or decrease specified in the letter or letters referred
to in paragraphs (d) and (e) of this Section 6, or (ii) any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and its Subsidiaries, the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impractical or inadvisable to
market the Notes as contemplated by the Final Memorandum.
(g) Subsequent to the respective dates as of which
information is given in the Final Memorandum and giving effect to the
Transaction, (i) the Company and its Subsidiaries shall not have incurred any
material liability or obligation, direct or contingent, or entered into any
material transaction not in the ordinary course of business; (ii) the Company
and its Subsidiaries shall not have purchased any of its outstanding Capital
Stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its Capital Stock; and (iii) there shall not have been any material
change in the Capital Stock of the Company and its Subsidiaries or in the
short-term debt or long-term debt of the Company and its Subsidiaries, except in
each case as described in or contemplated by the Final Memorandum; and (iv) none
of the assets of the Company and its Subsidiaries shall have materially
diminished in value, except as would not result in a Material Adverse Effect.
(h) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of the Notes by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(i) Each of the Transaction Documents (including any
amendments thereto) shall have been duly authorized, executed and delivered by
each of the parties thereto, and the Initial Purchasers shall have received
copies of each such Transaction Document (including any amendments thereto) as
so executed and delivered in the form provided to the Initial Purchasers on or
before the date hereof except for changes approved by the Initial Purchasers or
changes which do not materially affect the rights or obligations of the Company
and the Guarantors.
(j) The Company shall have been advised by the National
Association of Securities Dealers, Inc. (the "NASD") that the Notes have been
designated PORTAL-eligible securities in accordance with the rules and
regulations of the NASD relating to trading in the PORTAL Market.
(k) On or before the Closing Date, all conditions to
borrowing under the Bank Facility shall have been satisfied and the initial
borrowings thereunder shall have occurred concurrently with the sale of the
Notes hereunder as contemplated in the Final Memorandum;
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(l) On or before the Closing Date, all conditions to the
consummation of the Acquisition pursuant to the Asset Purchase Agreement shall
have been satisfied and the consummation of the Acquisition shall have occurred
concurrently with the closing of the sale of the Notes hereunder as contemplated
in the Final Memorandum;
(m) Prior to the Closing Date, the Company and the
Guarantors shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may reasonably
request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be satisfactory in all respects in form and substance to the
Initial Purchasers and Counsel for the Initial Purchasers, this Agreement and
all obligations of the Initial Purchasers hereunder may be canceled at the
Closing Date by the Initial Purchasers. Notice of such cancellation shall be
given to the Company in writing, by telecopier or by telephone confirmed in
writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers on the Closing
Date.
7. Reimbursement of Expenses, Fees. The Company and the
Guarantors will, whether or not the sale of the Notes provided for herein is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and the offering documents and the other Transaction
Documents, including the fees and disbursements of its accountants and counsel,
the cost of printing or other production and delivery of the Preliminary
Memoranda, the Final Memorandum, all amendments thereof and supplements thereto,
and all other documents relating to the offering of the Notes, the cost of
preparing, printing, packaging and delivering the Notes, the fees and
disbursements, including fees of counsel incurred in compliance with Section
5(d), the fees and disbursements of the Trustee and the fees of any agency that
rates the Notes, and the fees and expenses, if any, incurred in connection with
the admission of the Notes for trading in the PORTAL Market.
8. Indemnification and Contribution.
(a) The Company and the Guarantors jointly and severally
agree to indemnify and hold harmless the Initial Purchasers, the directors,
officers, employees and agents of the Initial Purchasers and each person who
controls the Initial Purchasers within the meaning of either the Securities Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memoranda, the Final Memorandum or any information provided by
the Company and the Guarantors to any Holder or prospective purchaser of Notes
pursuant to Section 5(i), or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein
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or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and the Guarantors will
not be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memoranda or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information relating to
the Initial Purchasers furnished to the Company or the Guarantors by or on
behalf of the Initial Purchasers specifically for inclusion therein; and,
provided, further, that with respect to any untrue statement or omission of
material fact made in the Preliminary Memoranda, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of the Initial
Purchasers to the extent that any such losses, claims, damages or liabilities
asserted against the Initial Purchasers occurs under circumstances where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (x) the Company had previously furnished copies of
the Final Memorandum to the Initial Purchasers as required by this Agreement,
(y) the untrue statement or omission of a material fact contained in either
Preliminary Memorandum was corrected in the Final Memorandum and (z) there was
not sent or given to such person asserting any such losses, claims, damages or
liabilities, at or prior to the written confirmation of the sale of Notes to
such person, a copy of the Final Memorandum.
(b) The Initial Purchasers agree to indemnify and hold
harmless (i) the Company, (ii) each Guarantor, (iii) each of their respective
directors and officers and (iv) each person who controls the Company or any
Guarantor within the meaning of either the Securities Act or the Exchange Act to
the same extent as the foregoing indemnity from the Company and the Guarantors
to the Initial Purchasers, but only with reference to written information
relating to the Initial Purchasers furnished to the Company and the Guarantors
by or on behalf of the Initial Purchasers specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which the Initial Purchasers may otherwise have.
The Company and the Guarantors acknowledge that the statements set forth in the
last paragraph of the cover page and under the headings "Notice to Investors"
and "Plan of Distribution" in the Preliminary Memoranda and the Final Memorandum
constitute the only information furnished in writing by or on behalf of the
Initial Purchasers for inclusion in the Preliminary Memoranda or Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in
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which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel (and local
counsel) if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with an actual 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 reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall have authorized the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 8 is unavailable or insufficient to hold harmless an
indemnified party for any reason, the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and the Guarantors, on the one
hand, and the Initial Purchasers on the other, may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and by the Initial Purchasers, on the other,
from the offering of the Notes; provided, however, that in no case shall the
Initial Purchasers be responsible for any amount in excess of the purchase
discount or commission applicable to the Notes purchased by the Initial
Purchasers hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other, shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantors, on the one hand, and of
the Initial Purchasers, on the other, in connection with the statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantors shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received by the Initial
Purchasers from the Company in connection with the purchase of the Notes
hereunder. Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission relates to information
provided by the Company, the Guarantors or the Initial Purchasers and the
parties' relative intent,
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knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation that does not take account
of the equitable considerations referred to above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities,
expenses or judgments referred to in the immediately preceding paragraph shall
be deemed to include any legal or other expenses incurred by such indemnified
person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls the Initial Purchasers within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of the Initial Purchasers shall have the same rights to contribution as
the Initial Purchasers, and each person who controls the Company or any
Guarantor within the meaning of either the Securities Act or the Exchange Act
and each officer, director, employee and agent of the Company or any Guarantor
shall have the same rights to contribution as the Company and the Guarantors,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Termination. This Agreement shall be subject to termination by
notice given by the Initial Purchasers to the Company prior to delivery of and
payment for the Notes if, after the date hereof and prior to such time, there
shall have occurred a material adverse change in the condition of the financial,
banking or capital markets the effect of which, in the judgment of the Initial
Purchasers, makes it impractical to market the Notes or to enforce sale
contracts with respect to the Notes.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantors or their officers and of the Initial Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Company, the Guarantors or any of their officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Notes. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered or telecopied and confirmed to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇, or, if sent to the Company, will be mailed, delivered or telecopied and
confirmed to them at ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy No.: (919)
459-3148, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns and
the officers and directors and controlling persons referred to in Section 8
hereof, and, except as expressly set forth in Section 5(i) hereof, nothing
expressed or mentioned in this Agreement is intended or shall be construed
26
27
to give any other person, firm, corporation or other entity any legal or
equitable right, remedy or claim under or in respect to this Agreement or any
provisions herein contained. No purchaser of Notes from the Initial Purchasers
shall be deemed to be a successor merely by reason of such purchase.
13. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
14. Business Day. For purposes of this Agreement, "Business Day"
means any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of Charlotte, North Carolina or of New York, New York, or is a
day on which banking institutions therein located are authorized or required by
law or other governmental action to close.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
* * *
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If the foregoing is in accordance with your understanding of our
agreement please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Guarantors and the Initial Purchasers.
Very truly yours,
FRESH FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GUARANTORS:
BRUNSWICK ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
CLAREMONT RESTAURANT GROUP, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ELLOREE FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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FRESH FOODS PROPERTIES, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GEORGIA BUFFET RESTAURANTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KNOXVILLE FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
MOM 'N' POP'S COUNTRY HAM, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
OAK RIDGE FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SAGEBRUSH, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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SAGEBRUSH OF SEVIERVILLE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SAGEBRUSH OF TENNESSEE, L.P.
By: Sagebrush of South Carolina, LLC
General Partner
By: Sagebrush, Inc., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SEVEN STARS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ST. AUGUSTINE FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
TENNESSEE WSMP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
VIRGINIA WSMP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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CHARDENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
PIERRE FOODS, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GEORGIA WSMP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KINGSPORT FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ PRIME SIRLOIN, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
NAPLES FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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PRIME SIRLOIN, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SAGEBRUSH OF NORTH CAROLINA, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SAGEBRUSH OF SOUTH CAROLINA, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SPICEWOOD, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SOUTH CAROLINA WSMP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SUNSHINE WSMP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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33
TUMBLEWEED OF PIGEON FORGE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
GREENVILLE FOOD SYSTEMS,
INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
FRESH FOODS SALES, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SAGEBRUSH DTN, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
D&S FOOD SYSTEMS, LLC
By: FRESH FOODS, INC., Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
33
34
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
FIRST UNION CAPITAL MARKETS
A DIVISION OF WHEAT FIRST SECURITIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Director
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
34
35
SCHEDULE I
Subject to the terms and conditions set forth in this Agreement, the
Initial Purchasers have agreed, severally and not jointly, to purchase from the
Company, and the Company has agreed to sell to the Initial Purchasers, the
respective principal amount of the Notes set forth opposite their names below:
Initial Purchasers Principal Amount of Notes
------------------ -------------------------
First Union Capital Markets $103,500,000
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 11,500,000
------------
$115,000,000
============
36
EXHIBIT A
SUBSIDIARIES
Name Jurisdiction of Organization
---- ----------------------------
Brunswick Associates, Inc. Georgia
Claremont Restaurant Group, LLC North Carolina
Elloree Foods, Inc. South Carolina
Fresh Foods Properties, LLC North Carolina
Georgia Buffet Restaurants, Inc. Georgia
Knoxville Foods, Inc. Tennessee
Mom `n' Pop's Country Ham, LLC North Carolina
Oak Ridge Foods, Inc. Tennessee
Sagebrush, Inc. North Carolina
Sagebrush of Sevierville, Inc. Tennessee
Sagebrush of Tennessee, L.P. Tennessee
Seven Stars, Inc. Maryland
St. Augustine Foods, Inc. Florida
Tennessee WSMP, Inc. Tennessee
Virginia WSMP, Inc. Virginia
Chardent, Inc. Delaware
Pierre Foods, LLC North Carolina
Georgia WSMP, Inc. Georgia
Kingsport Foods, Inc. Tennessee
Matthews Prime Sirloin, Inc. North Carolina
Naples Foods, Inc. Florida
Prime Sirloin, Inc. Tennessee
Sagebrush of North Carolina, LLC North Carolina
Sagebrush of South Carolina, LLC South Carolina
Spicewood, Inc. Delaware
South Carolina WSMP, Inc. South Carolina
Sunshine WSMP, Inc. Florida
Tumbleweed of Pigeon Forge, Inc. Tennessee
Greenville Food Systems, Incorporated North Carolina
Fresh Foods Sales, LLC North Carolina
Sagebrush DTN, Inc. Tennessee
D&S Food Systems, LLC Georgia
37
EXHIBIT B
FORM OF OPINION OF MCGUIRE, WOODS, BATTLE & ▇▇▇▇▇▇ LLP
The introduction, qualifications and assumptions of this opinion shall be
satisfactory to the Initial Purchasers and Counsel to the Initial Purchasers in
their sole discretion.
1. The Company and the Guarantors are each duly organized and validly
existing in good standing under the laws of their respective jurisdictions of
organization with the power to own their respective properties and assets and to
transact the business in which each is engaged.
2. All of the outstanding shares of Capital Stock of the Company and the
Guarantors have been duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive rights
contained in their respective certificates of incorporation or otherwise imposed
by law. All of the Capital Stock of each of the Guarantors is owned of record
and, to our knowledge, by the Company or another wholly-owned Subsidiary of the
Company.
3. The Purchase Agreement has been duly and validly authorized, executed
and delivered by the Company and the Guarantors and constitutes the valid and
legally binding agreement of each of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with its terms.
4. The Indenture has been duly and validly authorized by the Company and
the Guarantors and, when duly and validly executed and delivered, will
constitute the valid and legally binding agreement of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms.
5. 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
the Guarantors (in respect of the Guarantees) and, when duly paid for by the
Initial Purchasers in accordance with the terms of the Purchase Agreement, will
constitute the valid and legally binding obligations of the Company and the
Guarantors (in respect of the Guarantees), entitled to the benefits of the
Indenture, and enforceable against the Company and the Guarantors (in respect of
the Guarantees) in accordance with their terms.
6. The Exchange Notes have been duly and validly authorized by the Company
and the Guarantors, and when the Exchange Notes have been duly executed and
delivered in accordance with the terms of the Indenture, will constitute the
valid and legally binding obligations of the Company and the Guarantors (in
respect of the Guarantees), entitled to the benefits of the Indenture, and
enforceable against the Company and the Guarantors (in respect of the
Guarantees) in accordance with their terms.
7. The Registration Rights Agreement has been duly and validly authorized
by the Company and the Guarantors, and, when duly and validly executed and
delivered, will constitute
38
the valid and legally binding agreement of the Company and the Guarantors,
enforceable against the Company and the Guarantors in accordance with its terms.
8. Each of (a) the issuance, offering and sale of the Notes to the Initial
Purchasers by the Company pursuant to the Purchase Agreement; (b) the execution,
delivery and performance of each of the other Transaction Documents and each
other document and instrument to be executed, delivered or performed by each of
the Company and the Guarantors in connection with the Transactions and (c) the
consummation of each of the transactions herein or therein contemplated and the
compliance with each of the terms and provisions hereof or thereof, do not and
will not (i) violate or result in any breach of any of the terms, covenants,
conditions or provisions of, constitute a default under, or result in the
creation or imposition of any lien upon any of their properties or assets
pursuant to the terms of any Contracts of which we are aware and to which any of
them is a party or by which they or any of their properties or assets are bound
or to which any of them may be subject, except for such violations, breaches,
defaults or liens that could not be reasonably expected to have a Material
Adverse Effect (ii) violate any provision of applicable Law or regulation or of
its certificate of incorporation or by-laws, or (iii) to our knowledge, violate
or contravene any judgment, writ, order, injunction or decree of any court,
arbitrator, administrative agency or other governmental authority applicable to
the Company, any of the Guarantors or to any of their respective properties or
assets.
9. To our knowledge, there are no actions, suits or proceedings pending or
threatened with respect to any of the Company or the Guarantors which (a) if
adversely determined, could be reasonably expected to result in a Material
Adverse Effect or (b) seeks to restrain, enjoin or prevent the consummation of
or otherwise challenge the Transaction Documents or the consummation of the
Transactions.
10. None of the Company or the Guarantors is (a) an "investment company" or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, without taking into account the
number of holders of securities of the Company and the Guarantors or any company
"controlling" any of them, or (b) a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
11. No consent, license, approval or authorization of, registration, filing
or declaration with, or notice to any governmental body, official, authority,
bureau or agency is required in connection with the execution, delivery or
performance by the Company or any Guarantor of the Transaction Documents to
which each is a party or in connection with the consummation of the
Transactions, except for such consents, licenses, approvals, authorizations,
registrations, filings, declarations and notices that have already been obtained
or made.
12. It is not necessary in connection with the offer, sale and delivery of
the Notes in the manner contemplated by this Agreement and the Final Memorandum
to register the Notes under the Securities Act or to qualify the Indenture under
the Trust Indenture Act, in each case assuming (a) the accuracy of the
representations and warranties of the Company contained in Section 1 of the
Purchase Agreement, (b) the compliance by the Company of the covenants
39
contained in Section 5 of the Purchase Agreement, (c) the accuracy of the
Initial Purchasers' representations and warranties in Section 4 of the Purchase
Agreement and (d) the compliance by the Initial Purchasers of their covenants in
Section 4 of the Purchase Agreement.
13. The Transaction Documents conform in all material respects to the
descriptions thereof contained in the Final Memorandum.
In addition, we have participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives of the
independent public accountants for the Company and the Guarantors,
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 we have not independently verified
and do not pass upon and assume no responsibility for the accuracy, completeness
or fairness of the statements contained in the Final Memorandum (except to the
extent specified in Paragraph 13 above), no facts have come to our attention
which lead us 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 to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading (it being understood that we 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).
